<PAGE>
Securities Act File No. 333-76773
Investment Company Act File No. 811-266
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
- --------------------------------------------------------------------------------
FORM N-2
[X] REGISTRATION STATEMENT UNDER SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. _______________
[X] Post-Effective Amendment No. 1
---------------
and/or
[X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[X] Amendment No. 30
----
- --------------------------------------------------------------------------------
Exact Name of Registrant as Specified in Charter:
TRI-CONTINENTAL CORPORATION
- --------------------------------------------------------------------------------
Address of Principal Executive Offices (Number, Street, City, State, Zip Code):
100 Park Avenue, New York, New York 10017
- --------------------------------------------------------------------------------
Registrant's Telephone Number, including Area Code:
(212) 850-1864 or (800) 221-2450
- --------------------------------------------------------------------------------
Name and Address of Agent for Service (Number, Street, City, State, Zip Code):
Frank J. Nasta, Esq.
100 Park Avenue
New York, New York 10017
- --------------------------------------------------------------------------------
The Registration Statement shall become effective hereafter in accordance with
Section 8(a) of the Securities Act of 1933.
<PAGE>
Securities Act File No. 33-
Investment Company Act File No. 811-266
TRI-CONTINENTAL CORPORATION
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
FORM N-2 - PART A - PROSPECTUS
<TABLE>
<CAPTION>
Item No. Caption
- -------- -------
<C> <S>
1. Outside Front Cover Outside Front Cover of the Prospectus
2. Inside Front and Outside Back Cover Page Inside Front and Outside Back Cover Page of Prospectus
3. Fee Table and Synopsis Summary of Corporation Expenses; Prospectus Summary
4. Financial Highlights Financial Highlights
5. Plan of Distribution Not Applicable
6. Selling Shareholders Not Applicable
7. Use of Proceeds Description of Investment Plans and Other Services -
Method of Purchase
8. General Description of the Registrant Prospectus Summary; The Corporation; Investment
Objective and Other Policies and Related Risks;
Trading and Net Asset Value Information Concerning
Tri-Continental Corporation Common Stock
9. Management Management of the Corporation; Description of
Investment Plans and Other Services; Back Cover Page
of Prospectus
10. Capital Stock, Long-Term Debt, and Other Description of Capital Stock; Description of
Securities Warrants; Dividend Policy and Taxes; Description of
Investment Plans and Other Services; Capitalization at
March 31, 2000
11. Defaults and Arrears on Senior Securities Not Applicable
12. Legal Proceedings Not Applicable
13. Table of Contents of the Statement of Additional Table of Contents of the Statement of Additional
Information Information
</TABLE>
<PAGE>
Securities Act File No. 33-
Investment Company Act File No. 811-266
TRI-CONTINENTAL CORPORATION
CROSS REFERENCE SHEET
Pursuant to Rule 495(a)
FORM N-2 - PART B - STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
Item No. Caption
- -------- -------
<C> <S>
14. Cover Page Cover Page of the Statement of Additional
Information
15. Table of Contents Cover Page of the Statement of Additional Information
16. General Information and History Appendix
17. Investment Objectives and Policies Additional Investment Objectives and Policies
18. Management Directors and Officers
19. Control Persons and Principal Holders Directors and Officers - Holdings of Preferred
of Securities Stock, Common Stock and Warrants
20. Investment Advisory and Other Services Directors and Officers - Holdings of Preferred Stock,
Common Stock and Warrants; Management; Experts;
Custodian, Stockholder Service Agent and Dividend
Paying Agent
21. Brokerage Allocation and Other Practices Brokerage Commissions
22. Tax Status Additional Investment Objectives and Policies
23. Financial Statements Incorporation of Financial Statements by Reference
</TABLE>
2
<PAGE>
[Tri-Continental Corporation LOGO]
an investment you can live with
100 Park Avenue May 1, 2000
New York, NY 10017
New York City Telephone (212) 682-7600
Toll-Free Telephone (800) 874-1092
For Retirement Plan Information -- Toll-Free Telephone (800) 445-1777
Tri-Continental Corporation is a diversified, closed-end investment
company--a publicly traded investment fund. The Corporation's Common Stock is
traded on the New York Stock Exchange under the symbol "TY."
The Corporation invests primarily for the longer term, and over the years
the Corporation's objective has been to produce future growth of both capital
and income while providing reasonable current income. Common stocks have made
up the bulk of investments. However, assets may be held in cash or invested in
all types of securities. See "Investment Objective and Other Policies and
Related Risks." No assurance can be given that the Corporation's investment
objective will be realized. The Corporation's manager is J. & W. Seligman &
Co. Incorporated.
This Prospectus applies to all shares of Common Stock purchased under the
Corporation's various Investment Plans. See "Investment Plans and Other
Services." The shares of Common Stock covered by this Prospectus also may be
issued from time to time by the Corporation to acquire the assets of personal
holding companies, private investment companies or publicly owned investment
companies. See "Issuance of Shares in Connection with Acquisitions."
This Prospectus sets forth concisely the information that a prospective
investor should know about the Corporation before investing. Investors are
advised to read this Prospectus carefully and to retain it for future
reference. Additional information about the Corporation, including a Statement
of Additional Information ("SAI"), has been filed with the Securities and
Exchange Commission. The SAI is available upon request and without charge by
writing or calling the Corporation at the address or telephone numbers listed
above. The SAI is dated the same date as this Prospectus and is incorporated
herein by reference in its entirety. The table of contents of the SAI appears
on page 22 of this Prospectus. In addition, copies of the 1999 Annual Report
to Stockholders of the Corporation will be furnished, without charge, to
investors requesting copies of the SAI. The 1999 Annual Report contains
financial statements of the Corporation for the year ended December 31, 1999,
which are incorporated by reference into the SAI.
The Securities and Exchange Commission has neither approved nor disapproved
these securities, and it has not determined this prospectus to be accurate or
adequate. Any representation to the contrary is a criminal offense.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Summary of Corporation Expenses... 3
Prospectus Summary................ 4
The Corporation................... 5
Financial Highlights.............. 6
Capitalization at March 31, 2000.. 9
Trading and Net Asset Value
Information...................... 9
Investment Objective and Other
Policies and Related Risks....... 10
Management of the Corporation..... 12
Description of Capital Stock...... 13
Description of Warrants........... 15
Computation of Net Asset Value.... 15
</TABLE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Dividend Policy and Taxes.......... 15
Investment Plans and Other
Services.......................... 17
Issuance of Shares in Connection
with Acquisitions................. 21
Additional Information............. 21
Table of Contents of the Statement
of Additional Information......... 22
Authorization Form for Automatic
Dividend Investment and Cash
Purchase Plan..................... 23
Authorization Form for Automatic
Check Service..................... 24
</TABLE>
SUMMARY OF CORPORATION EXPENSES
The following table illustrates the expenses and fees that the Corporation
expects to incur and that you can expect to bear as a stockholder of the
Corporation.
<TABLE>
<S> <C>
Stockholder Transaction Expenses
Automatic Dividend Investment and Cash Purchase Plan Fees..... (/1/)
Annual Expenses for 1999 (as a percentage of net assets
attributable
to Common Stock)
Management Fees............................................... .40%
Other Expenses................................................ .16%
---
Total Annual Expenses....................................... .56%
===
</TABLE>
- --------
(/1/)Stockholders participating in the Corporation's investment plans pay a
maximum $2.00 fee per transaction. See "Investment Plans and Other
Services--Automatic Dividend Investment and Cash Purchase Plan" for a
description of the investment plans and services.
The purpose of the table above is to assist you in understanding the various
costs and expenses you will bear directly or indirectly. For more complete
descriptions of the various costs and expenses, see "Management of the
Corporation" and "Investment Plans and Other Services--Automatic Dividend
Investment and Cash Purchase Plan."
The following example illustrates the expenses you would pay on a $1,000
investment, assuming a 5% annual return:
<TABLE>
<CAPTION>
1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------
<S> <C> <C> <C> <C>
Tri-Continental Corporation Common
Stock.................................. $ 6 $18 $31 $70
</TABLE>
The example does not represent actual or anticipated expenses, which may be
greater or less than those shown. Moreover, the Corporation's actual rate of
return may be greater or less than the hypothetical 5% return shown in the
example.
3
<PAGE>
PROSPECTUS SUMMARY
The following is qualified in its entirety by the more detailed information
included elsewhere in this Prospectus.
This Prospectus applies to shares of Common Stock of the Corporation. The
Corporation invests primarily for the longer term and has no Charter
restrictions with respect to such investments. Over the years the
Corporation's objective has been to produce future growth of both capital and
income while providing reasonable current income. There can be no assurance
that this objective will be achieved. While common stocks have made up the
bulk of investments, assets may be held in cash or invested in all types of
securities in whatever amounts or proportions J. & W. Seligman & Co.
Incorporated (the "Manager") believes best suited to current and anticipated
economic and market conditions. These may include repurchase agreements,
options, illiquid securities and securities of foreign issuers, each of which
could involve certain risks. See "Investment Objective and Other Policies and
Related Risks."
The Manager manages the investment of the assets of the Corporation and
administers its business and other affairs pursuant to a Management Agreement
approved by the Board of Directors and the stockholders of the Corporation.
The Manager also serves as manager of nineteen other U.S. registered
investment companies which, together with the Corporation, make up the
"Seligman Group." The aggregate assets of the Seligman Group at March 31, 2000
were approximately $30 billion. The Manager also provides investment
management or advice to institutional and other accounts having a value at
March 31, 2000 of approximately $12 billion. The Manager's fee is based in
part on the average daily net assets of the Corporation. The management fee
rate for 1999 was equivalent to .40% of the Corporation's average daily net
investment assets. See "Management of the Corporation."
Shares of Common Stock covered by this Prospectus may be purchased from time
to time by Seligman Data Corp. ("SDC"), the Plan service agent for Automatic
Dividend Investment and Cash Purchase Plans, Individual Retirement Accounts
("IRAs"), Retirement Plans for Self-Employed Individuals, Partnerships and
Corporations, the J. & W. Seligman & Co. Incorporated Matched Accumulation
Plan and the Seligman Data Corp. Employees' Thrift Plan (collectively, the
"Plans"), as directed by participants, and may be sold from time to time by
the Plan service agent for participants in Systematic Withdrawal Plans. See
"Investment Plans and Other Services--Automatic Dividend Investment and Cash
Purchase Plan" and "--Systematic Withdrawal Plan." Shares will be purchased
for the Plans on the New York Stock Exchange or elsewhere when the market
price of the Common Stock is equal to or less than its net asset value, and
any brokerage commissions applicable to such purchases will be charged pro
rata to the Plan participants. Shares will be purchased for the Plans from the
Corporation at net asset value when the net asset value is lower than the
market price, all as more fully described in this Prospectus.
On November 18, 1999, the Board of Directors authorized the renewal of the
Corporation's ongoing share repurchase plan. The program authorizes the
Corporation to repurchase over a 12-month period up to 7.5% of its then
outstanding Common Stock, provided that the excess of net asset value over
market price remains wider than 10%. The shares repurchased under this program
are cancelled, increasing the number of authorized but unissued shares
available for issuance to participants in the Plans. The stock repurchase
program seeks, among other things, to moderate the growth in the number of
shares outstanding, increase the net asset value of the Corporation's
outstanding shares, reduce the dilutive impact on Stockholders who do not take
capital gains distributions in additional shares and increase the liquidity of
the Corporation's Common Stock in the marketplace. Shares acquired by the
Corporation from participants in the Systematic Withdrawal Plan and other
4
<PAGE>
stockholder plans are counted towards the 7.5% repurchase limit under the
program. As of March 31, 2000, 1,925,899 shares, or approximately 1.66% of the
shares outstanding on November 18, 1999, had been repurchased under the
program.
THE CORPORATION
The Corporation is a Maryland corporation formed in 1929 by the
consolidation of two predecessor corporations. It is registered under the
Investment Company Act of 1940, as amended (the "1940 Act"), as a diversified
management investment company of the closed-end type. The Corporation's Common
Stock is listed on the New York Stock Exchange under the symbol "TY." The
average weekly trading volume on that and other exchanges during 1999 was
237,619 shares. The Corporation's Common Stock has historically been traded on
the market at less than net asset value. As of March 31, 2000, the Corporation
had 124,349,922 shares of Common Stock outstanding and net assets attributable
to Common Stock of $4,074,261,338.
5
<PAGE>
FINANCIAL HIGHLIGHTS
The Corporation's financial highlights for the years presented below have
been audited by Deloitte & Touche LLP, independent auditors. This information,
which is derived from the financial and accounting records of the Corporation,
should be read in conjunction with the financial statements and notes
contained in the Corporation's 1999 Annual Report which may be obtained from
the Corporation as provided on the cover page of this Prospectus.
"Per share operating performance" data is designed to allow you to trace the
operating performance, on a per Common share basis, from the beginning net
asset value to the ending net asset value so that you can understand what
effect the individual items have on your investment, assuming it was held
throughout the year. 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 Common share amount, using
average shares outstanding.
Per Share Operating Performance, Total
(for a share of Common Stock
<TABLE>
<CAPTION>
----------------------------------------------------------
1999 1998 1997 1996 1995
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Per Share Operating
Performance:
Net asset value,
beginning of year...... $ 34.13 $ 32.06 $ 29.28 $ 27.58 $ 23.70
---------- ---------- ---------- ---------- ----------
Net investment income... .48 .54 .60 .68 .74
Net realized and
unrealized investment
gain (loss)............ 2.90 7.01 6.94 4.84 6.14
Net realized and
unrealized gain (loss)
from foreign currency
transactions........... -- (.01) (.17) (.02) .03
---------- ---------- ---------- ---------- ----------
Increase (decrease) from
investment operations.. 3.38 7.54 7.37 5.50 6.91
Dividends paid on
Preferred Stock........ (.02) (.02) (.02) (.02) (.02)
Dividends paid on Common
Stock.................. (.48) (.52) (.60) (.66) (.73)
Distribution from net
gain realized.......... (3.79) (4.28) (3.45) (2.72) (2.01)
Issuance of Common Stock
in gain distributions.. (.40) (.65) (.52) (.40) (.27)
Issuance of Common Stock
from exercise of
Rights................. -- -- -- -- --
Rights offering costs... -- -- -- -- --
Issuance of Common Stock
upon Warrant
exercise*.............. -- -- -- -- --
---------- ---------- ---------- ---------- ----------
Net increase (decrease)
in net asset value..... (1.31) 2.07 2.78 1.70 3.88
---------- ---------- ---------- ---------- ----------
Net asset value at end
of year................ $ 32.82 $ 34.13 $ 32.06 $ 29.28 $ 27.58
========== ========== ========== ========== ==========
Adjusted net asset value
at end of year*........ $ 32.75 $ 34.06 $ 31.99 $ 29.22 $ 27.52
Market value, end of
year................... $ 27.875 $ 28.50 $ 26.6875 $ 24.125 $ 22.625
Total investment return
for year:
Based upon market
value.................. 12.57% 26.19% 27.96% 21.98% 27.95%
Based upon net asset
value.................. 10.67% 25.80% 26.65% 21.45% 30.80%
Ratios and Supplemental
Data:**
Expenses to average net
investment assets...... .56% .58% .60% .62% .63%
Expenses to average net
assets for Common
Stock.................. .56% .58% .60% .63% .64%
Net investment income to
average net investment
assets................. 1.36% 1.59% 1.80% 2.27% 2.71%
Net investment income to
average net assets for
Common Stock........... 1.38% 1.60% 1.82% 2.31% 2.75%
Portfolio turnover
rate................... 42.83% 63.39% 83.98% 53.96% 62.28%
Net investment assets,
end of year (000s
omitted):
For Common Stock....... $4,109,863 $4,002,516 $3,391,816 $2,835,026 $2,469,149
For Preferred Stock.... 37,637 37,637 37,637 37,637 37,637
---------- ---------- ---------- ---------- ----------
Total net investment
assets................. $4,147,500 $4,040,153 $3,429,453 $2,872,663 $2,506,786
========== ========== ========== ========== ==========
</TABLE>
- --------
* Assumes the exercise of outstanding warrants. Warrant exercise terms were:
December 30, 1989 to December 28, 1990--8.81 shares at $2.55 per share;
December 29, 1990 to December 27, 1991--9.25 shares at $2.43 per share;
December 28, 1991 to November 1, 1992--9.69 shares at $2.32 per share;
November 2, 1992 to December 28, 1992--11.07 shares at $2.03 per share;
December 29, 1992 to December 28, 1993--11.29 shares at $1.99 per share;
December 29, 1993 to December 21, 1994--11.95 shares at $1.88 per share;
December 22, 1994 to December 27, 1995--12.77 shares at $1.76 per share;
December 28, 1995 to July 1, 1996--13.54 shares at $1.66 per share; July 2,
1996 to December 20, 1996--13.79 shares at $1.63 per share; December 21,
1996 to July 1, 1997--14.69 shares at $1 .53 per share; July 2, 1997 to
December 19, 1997--14.99 shares at $1.50 per share; December 20, 1997 to
June 23, 1998--16.06
6
<PAGE>
The total investment return based on market value measures the Corporation's
performance assuming you purchased shares of the Corporation at the market
value as of the beginning of the year, invested dividends and capital gains
paid as provided for in the Corporation's Automatic Dividend Investment and
Cash Purchase Plan, and then sold your shares at the closing market value per
share on the last day of the year. The computation does not reflect any sales
commissions you may incur in purchasing or selling shares of the Corporation.
The total investment return based on net asset value is similarly computed
except that the Corporation's net asset value is substituted for the
corresponding market value.
Investment Return, Ratios and Supplemental Data
outstanding throughout each year)
Year Ended December 31,
<TABLE>
- -----------------------------------------------------------------------------------------
<CAPTION>
1994 1993 1992 1991 1990
- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
$ 27.49 $ 28.03 $ 28.57 $ 24.60 $ 27.44
- ---------- ---------- ---------- ---------- ----------
.83 .83 .81 .81 .81
(1.69) 1.46 1.19 5.79 (1.05)
.02 -- -- -- --
- ---------- ---------- ---------- ---------- ----------
(.84) 2.29 2.00 6.60 (.24)
(.03) (.03) (.03) (.03) (.03)
(.79) (.80) (.78) (.78) (.86)
(1.90) (1.80) (.70) (1.80) (1.60)
(.23) (.19) (.05) (.02) (.11)
-- -- (.97) -- --
-- -- (.01) -- --
-- (.01) -- -- --
- ---------- ---------- ---------- ---------- ----------
(3.79) (.54) (.54) 3.97 (2.84)
- ---------- ---------- ---------- ---------- ----------
$ 23.70 $ 27.49 $ 28.03 $ 28.57 $ 24.60
========== ========== ========== ========== ==========
$ 23.65 $ 27.42 $ 27.95 $ 28.48 $ 24.52
$ 19.875 $ 23.75 $ 25.50 $ 27.75 $ 21.375
(5.07)% 3.47% .61%+ 42.98% 3.46%
(2.20)% 8.95% 7.42%+ 27.91% (.20)%
.64% .66% .67% .67% .56%
.65% .67% .68% .69% .57%
3.08% 2.88% 2.86% 2.90% 3.01%
3.14% 2.94% 2.92% 2.99% 3.07%
70.38% 69.24% 44.35% 49.02% 41.23%
$1,994,098 $2,166,212 $2,088,102 $1,833,664 $1,500,281
37,637 37,637 37,637 37,637 37,637
- ---------- ---------- ---------- ---------- ----------
$2,031,735 $2,203,849 $2,125,739 $1,871,301 $1,537,918
========== ========== ========== ========== ==========
</TABLE>
shares at $1.40 per share; June 24, 1998 to December 18, 1998--16.78 shares
at $1.34 per share; December 19, 1998 to June 24, 1999--17.85 shares at $1.26
per share; June 25, 1999 to December 16, 1999--18.14 shares at $1.24 per
share; and subsequently, 19.56 shares at $1.15 per share.
** The ratios of expenses and net investment income to average net investment
assets and to average net assets for Common Stock for the years presented do
not reflect the effect of dividends paid to Preferred Stockholders.
+ The total investment returns for 1992 have been adjusted for the effect of
the exercise of Rights (equivalent to approximately $0.97 per share),
assuming full subscription by Common Stockholders.
7
<PAGE>
Senior Securities -- $2.50 Cumulative Preferred Stock
The following information is being presented with respect to the
Corporation's $2.50 Cumulative Preferred Stock. The first column presents the
number of preferred shares outstanding at the end of each of the periods
presented. Asset Coverage represents the total amount of net assets of the
Corporation in relation to each share of Preferred Stock outstanding as of the
end of the respective periods. The involuntary liquidation preference is the
amount each share of Cumulative Preferred Stock would be entitled to upon
involuntary liquidation of these shares.
<TABLE>
<CAPTION>
Year-End Involuntary Average Daily
Asset Liquidation Market
Total Shares Coverage Preference Value
Year Outstanding Per Share Per Share Per Share
---- ------------ --------- ----------- -------------
<S> <C> <C> <C> <C>
1999...................... 752,740 $5,510 $50 $37.31
1998...................... 752,740 5,367 50 40.27
1997...................... 752,740 4,556 50 35.62
1996...................... 752,740 3,816 50 34.28
1995...................... 752,740 3,330 50 33.37
1994...................... 752,740 2,699 50 34.12
1993...................... 752,740 2,928 50 36.17
1992...................... 752,740 2,824 50 34.97
1991...................... 752,740 2,486 50 31.51
1990...................... 752,740 2,043 50 28.62
</TABLE>
8
<PAGE>
CAPITALIZATION AT MARCH 31, 2000
<TABLE>
<CAPTION>
Amount Held
by Registrant
or for its
Title of Class Authorized Outstanding Account
-------------- ---------- ----------- -------------
<S> <C> <C> <C>
$2.50 Cumulative Preferred
Stock,
$50 par value................ 1,000,000 shs. 752,740 shs. -0- shs.
Common Stock,
$.50 par value............... 159,000,000 shs.* 124,349,922 shs. -0- shs.
Warrants to purchase
Common Stock................. 13,543 wts. 13,543 wts. -0- wts.
</TABLE>
- --------
* 264,901 shares of Common Stock were reserved for issuance upon the exercise
of outstanding Warrants.
TRADING AND NET ASSET VALUE INFORMATION
The following table shows the high and low sale prices of the Corporation's
Common Stock on the composite tape for issues listed on the New York Stock
Exchange, the high and low net asset value and the percentage discount or
premium to net asset value per share for each calendar quarter since the
beginning of 1998.
<TABLE>
<CAPTION>
Discount to
Net Asset Net
Market Price Value Asset Value
---------------- ----------- ---------------
1998 High Low High Low High Low
- ---- -------- ------- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C> <C>
1st Q ........................... 30 25 1/8 35.94 30.98 (16.53)% (18.90)%
2nd Q............................ 30 5/16 27 36.40 33.20 (16.72) (18.67)
3rd Q............................ 29 23 1/16 35.18 29.25 (17.57) (23.56)
4th Q............................ 29 13/16 23 3/8 35.78 30.45 (16.67) (23.23)
1999
- ----
1st Q ........................... 29 5/16 28 1/16 35.57 33.90 (17.59) (17.22)
2nd Q............................ 31 3/16 29 37.43 34.90 (16.68) (16.91)
3rd Q............................ 31 1/2 29 37.47 34.39 (15.93) (15.67)
4th Q............................ 32 1/2 27 1/2 35.73 32.67 (9.04) (15.82)
2000
- ----
1st Q ........................... 27 7/16 22 3/4 32.54 29.62 (15.68) (23.19)
</TABLE>
The Corporation's Common Stock has historically been traded on the market at
less than net asset value. The closing market price, net asset value and
percentage discount to net asset value per share of the Corporation's Common
Stock on March 31, 2000 were $25.50, $32.76 and (22.16)%, respectively.
9
<PAGE>
INVESTMENT OBJECTIVE AND OTHER POLICIES AND RELATED RISKS
The Corporation invests primarily for the longer term and has no Charter
restrictions with respect to such investments. Over the years, the
Corporation's investment objective has been to produce future growth of both
capital and income while providing reasonable current income. There can be no
assurance that this objective will be achieved. While common stocks have made
up the bulk of investments, assets may be held in cash or invested in all
types of securities, that is, in bonds, debentures, notes, preferred and
common stocks, rights and warrants (subject to limitations as set forth in the
SAI), and other securities, in whatever amounts or proportions the Manager
believes best suited to current and anticipated economic and market
conditions.
The management's present investment policies, in respect to which it has
freedom of action, are:
(1) it keeps investments in individual issuers within the limits
permitted diversified companies under the 1940 Act (i.e., 75% of its total
assets must be represented by cash items, government securities, securities
of other investment companies, and securities of other issuers which, at
the time of investment, do not exceed 5% of the Corporation's total assets
at market value in the securities of any issuer and do not exceed 10% of
the voting securities of any issuer);
(2) it does not make investments with a view to exercising control or
management except that it has an investment in SDC;
(3) it ordinarily does not invest in other investment companies, but it
may purchase up to 3% of the voting securities of such investment
companies, provided purchases of securities of a single investment company
do not exceed in value 5% of the total assets of the Corporation and all
investments in investment company securities do not exceed 10% of total
assets; and
(4) it has no fixed policy with respect to portfolio turnover and
purchases and sales in the light of economic, market and investment
considerations. The portfolio turnover rates for the ten fiscal years ended
December 31, 1999 are shown under "Financial Highlights."
The foregoing investment objective and policies may be changed by management
without stockholder approval, unless such a change would change the
Corporation's status from a "diversified" to a "non-diversified" company under
the 1940 Act.
The Corporation's stated fundamental policies relating to the issuance of
senior securities, the borrowing of money, the underwriting of securities of
other issuers, the concentration of investments in a particular industry or
groups of industries, the purchase or sale of real estate and real estate
mortgage loans, the purchase or sale of commodities or commodity contracts,
and the making of loans may not be changed without a vote of stockholders. A
more detailed description of the Corporation's investment policies, including
a list of those restrictions on the Corporation's investment activities which
cannot be changed without such a vote, appears in the SAI. Within the limits
of these fundamental policies, management has reserved freedom of action.
Repurchase Agreements: The Corporation may enter into repurchase agreements
with respect to debt obligations which could otherwise be purchased by the
Corporation. A repurchase agreement is an instrument under which the
Corporation may acquire an underlying debt instrument and simultaneously
obtain the commitment of the seller (a commercial bank or a broker or dealer)
to repurchase the security at an agreed upon price and date within a number of
days (usually not more than seven days from the date of purchase). The value
of the underlying securities will be at least equal at all times to the total
amount of the repurchase obligation,
10
<PAGE>
including the interest factor. The Corporation will make payment for such
securities only upon physical delivery or evidence of book transfer to the
account of the Corporation's custodian. Repurchase agreements could involve
certain risks in the event of default or insolvency of the other party,
including possible delays or restrictions upon the Corporation's ability to
dispose of the underlying securities. The Corporation did not enter into
repurchase agreements in 1999.
Illiquid Securities: The Corporation may invest up to 15% of its net
investment assets in illiquid securities, including restricted securities
(i.e., securities not readily marketable without registration under the
Securities Act of 1933, as amended (the "1933 Act")) and other securities that
are not readily marketable. The Corporation may purchase restricted securities
that can be offered and sold to "qualified institutional buyers" under Rule
144A of the 1933 Act, and 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 Board of Directors 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. This investment practice could have the effect of
increasing the level of illiquidity in the Corporation, if and to the extent
that qualified institutional buyers become for a time uninterested in
purchasing Rule 144A securities.
Foreign Securities: The Corporation may invest in commercial paper and
certificates of deposit issued by foreign banks and may invest in other
securities of foreign issuers directly or through American Depositary Receipts
("ADRs"), American Depositary Shares ("ADSs"), European Depositary Receipts
("EDRs") or Global Depositary Receipts ("GDRs") (collectively, "Depositary
Receipts"). Foreign investments may be affected favorably or unfavorably by
changes in currency rates and exchange control regulations. There may be less
information available about a foreign company than about a U.S. company and
foreign companies may not be subject to reporting standards and requirements
comparable to those applicable to U.S. companies. Foreign securities may not
be as liquid as U.S. securities. Securities of foreign companies may involve
greater market risk than securities of U.S. companies, and foreign brokerage
commissions and custody fees are generally higher than those in the United
States. Investments in foreign securities may also be subject to local
economic or political risks, political instability and possible
nationalization of issuers. ADRs and ADSs are instruments generally issued by
domestic banks or trust companies that represent the deposits of a security of
a foreign issuer. ADRs and ADSs may be publicly traded on exchanges or over-
the-counter in the United States and are quoted and settled in dollars at a
price that generally reflects the dollar equivalent of the home country share
price. EDRs and GDRs are typically issued by foreign banks or trust companies
and traded in Europe. Depositary Receipts may be issued under sponsored or
unsponsored programs. In sponsored programs, the issuer has made arrangements
to have its securities traded in the form of a Depositary Receipt. In
unsponsored programs, the issuers may not be directly involved in the creation
of the program. Although regulatory requirements with respect to sponsored and
unsponsored programs are generally similar, the issuers of securities
represented by unsponsored Depositary Receipts are not obligated to disclose
material information in the United States and, therefore, the import of such
information may not be reflected in the market value of such receipts. The
Corporation may invest up to 10% of its total assets in foreign securities
that it holds directly, but this 10% limit does not apply to foreign
securities held through Depositary Receipts or to commercial paper and
certificates of deposit issued by foreign banks.
Leverage: Senior securities issued or money borrowed to raise funds for
investment have a prior fixed dollar claim on the Corporation's assets and
income. Any gain in the value of securities purchased or in income received in
excess of the cost of the amount borrowed or interest or dividends payable
causes the net asset value
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of the Corporation's Common Stock or the income available to it to increase
more than otherwise would be the case. Conversely, any decline in the value of
securities purchased or income received on them to below the asset or income
claims of the senior securities or borrowed money causes the net asset value
of the Common Stock or income available to it to decline more sharply than
would be the case if there were no prior claim. Funds obtained through senior
securities or borrowings thus create investment opportunity, but they also
increase exposure to risk. This influence ordinarily is called "leverage." As
of March 31, 2000, the only senior securities of the Corporation outstanding
were 752,740 shares of its $2.50 Cumulative Preferred Stock, $50 par value.
Based on its March 31, 2000 asset value, the Corporation's portfolio requires
an annual return of 0.05% in order to cover dividend payments on the Preferred
Stock. The following table illustrates the effect of leverage relating to
presently outstanding Preferred Stock on the return available to a holder of
the Corporation's Common Stock.
<TABLE>
<S> <C> <C> <C> <C> <C>
Assumed return on portfolio
(net of expenses).......................... -10% -5% 0% 5% 10%
Corresponding return to common stockholder.. -10.14% -5.09% -0.05% 5.00% 10.05%
</TABLE>
The purpose of the table above is to assist you in understanding the effects
of leverage. The percentages appearing in the table do not represent actual or
anticipated returns, which may be greater or less than those shown.
MANAGEMENT OF THE CORPORATION
The Manager: In accordance with the applicable laws of the State of
Maryland, the Board of Directors provides broad supervision over the affairs
of the Corporation. Pursuant to a Management Agreement approved by the Board
and the stockholders, the Manager manages the investment of the assets of the
Corporation and administers its business and other affairs. In that
connection, the Manager makes purchases and sales of portfolio securities
consistent with the Corporation's investment objective and policies.
The Manager also serves as manager of nineteen other U.S. registered
investment companies which, together with the Corporation, make up the
"Seligman Group." These other 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 Global Fund Series, Inc., Seligman
High Income Fund Series, Seligman Income Fund, Inc., Seligman Municipal Fund
Series, Inc., Seligman Municipal Series Trust, Seligman New Jersey Municipal
Fund, Inc., Seligman New Technologies Fund, Inc., Seligman Pennsylvania
Municipal Fund Series, Seligman Portfolios, Inc., Seligman Quality Municipal
Fund, Inc., Seligman Select Municipal Fund, Inc., Seligman Time
Horizon/Harvester Series, Inc. and Seligman Value Fund Series, Inc. The
address of the Manager is 100 Park Avenue, New York, NY 10017.
As compensation for the services performed and the facilities and personnel
provided by the Manager, the Corporation pays to the Manager promptly after
the end of each month a fee, calculated on each day during such month, equal
to the Applicable Percentage of the daily net assets of the Corporation at the
close of business on the previous business day. The term "Applicable
Percentage" means the amount (expressed as a percentage and rounded to the
nearest one millionth of one percent) obtained by dividing (i) the Fee Amount
by (ii) the Fee Base. The term "Fee Amount" means the sum on an annual basis
of:
.45 of 1% of the first $4 billion of Fee Base
.425 of 1% of the next $2 billion of Fee Base
.40 of 1% of the next $2 billion of Fee Base, and
.375 of 1% of the Fee Base in excess of $8 billion.
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<PAGE>
The term "Fee Base" as of any day means the sum of the net assets at the close
of business on the previous day of each of the investment companies registered
under the 1940 Act for which the Manager or any affiliated company acts as
investment adviser or manager (including the Corporation).
Charles C. Smith, Jr., a Managing Director of the Manager, has been
Portfolio Manager for the Corporation since January 1, 1995. Mr. Smith is also
Vice President and Portfolio Manager of Seligman Common Stock Fund, Inc. and
Seligman Income Fund, Inc., and Vice President of Seligman Portfolios, Inc.
("SPI") and Portfolio Manager of SPI's Seligman Common Stock Portfolio and
Seligman Income Portfolio. Mr. Smith joined the Manager in 1985 as a Vice
President, Investment Officer and was promoted to Senior Vice President,
Senior Investment Officer in August 1992, and to Managing Director in January
1994.
Rodney D. Collins, a Senior Vice President, Investment Officer of the
Manager, has served as Co-Portfolio Manager of the Corporation since July
1998. Mr. Collins is also Co-Portfolio Manager of Seligman Common Stock Fund,
Inc., Seligman Income Fund, Inc., and the Seligman Common Stock Portfolio and
Seligman Income Portfolio of SPI. Mr. Collins joined the Manager in 1992 as an
investment associate and was promoted to a Vice President, Investment Officer
in January 1995, and to Senior Vice President, Investment Officer in January
1999.
The Corporation pays all its expenses other than those assumed by the
Manager, including brokerage commissions, fees and expenses of independent
attorneys and auditors, taxes and governmental fees, cost of stock
certificates, expenses of printing and distributing prospectuses, expenses of
printing and distributing reports, notices and proxy materials to
stockholders, expenses of printing and filing reports and other documents with
governmental agencies, expenses of stockholders' meetings, expenses of
corporate data processing and related services, stockholder record keeping and
stockholder account services, fees and disbursements of transfer agents and
custodians, expenses of disbursing dividends and distributions, fees and
expenses of directors of the Corporation not employed by the Manager or its
affiliates, insurance premiums and extraordinary expenses such as litigation
expenses.
The Management Agreement provides that it will continue in effect until
December 29 of each year if 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 Corporation and by a
vote of a majority of Directors who are not parties to the Management
Agreement or interested persons of any such party) and if the Manager shall
not have notified the Corporation at least 60 days prior to December 29 of any
year that it does not desire such continuance. The Management Agreement may be
terminated by the Corporation, without penalty, on 60 days' written notice to
the Manager and will terminate automatically in the event of its assignment.
DESCRIPTION OF CAPITAL STOCK
(a) Dividend Rights: Common Stockholders are entitled to receive dividends
only if and to the extent declared by the Board of Directors and only after
(i) such provisions have been made for working capital and for reserves as the
Board may deem advisable, (ii) full cumulative dividends at the rate of $.625
per share per quarterly dividend period have been paid on the Preferred Stock
for all past quarterly periods and have been provided for the current
quarterly period, and (iii) such provisions have been made for the purchase or
for the redemption (at a price of $55 per share) of the Preferred Stock as the
Board may deem advisable. In any event, no dividend may be declared upon the
Common Stock unless, at the time of such declaration, the net assets of the
Corporation, after deducting the amount of such dividend and the amount of all
unpaid dividends declared on the Preferred Stock, shall be at least equal to
$100 per outstanding share of Preferred Stock. The equivalent figure was
$5,462.57 at March 31, 2000.
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<PAGE>
(b) Voting Rights: The Preferred Stock is entitled to two votes and the
Common Stock is entitled to one vote per share at all meetings of
stockholders. In the event of a default in payments of dividends on the
Preferred Stock equivalent to six quarterly dividends, the Preferred
Stockholders are entitled, voting separately as a class to the exclusion of
Common Stockholders, to elect two additional directors, such right to continue
until all arrearages have been paid and current Preferred Stock dividends are
provided for. Notwithstanding any provision of law requiring any action to be
taken or authorized by the affirmative vote of the holders of a designated
portion of all the shares or of the shares of each class, such action shall be
effective if taken or authorized by the affirmative vote of a majority of the
aggregate number of the votes entitled to vote thereon, except that a class
vote of Preferred Stockholders is also required to approve certain actions
adversely affecting their rights. Any change in the Corporation's fundamental
policies may also be authorized by the vote of 67% of the votes present at a
meeting if the holders of a majority of the aggregate number of votes entitled
to vote are present or represented by proxy.
Consistent with the requirements of Maryland law, the Corporation's Charter
provides that the affirmative vote of two-thirds of the aggregate number of
votes entitled to be cast thereon shall be necessary to authorize any of the
following actions: (i) the dissolution of the Corporation; (ii) a merger or
consolidation of the Corporation (in which the Corporation is not the
surviving corporation) with (a) an open-end investment company or (b) a
closed-end investment company, unless such closed-end investment company's
Articles of Incorporation require a two-thirds or greater proportion of the
votes entitled to be cast by such company's stock to approve the types of
transactions covered by clauses (i) through (iv) of this paragraph; (iii) the
sale of all or substantially all of the assets of the Corporation to any
person (as such term is defined in the 1940 Act); or (iv) any amendment of the
Charter of this Corporation which makes any class of the Corporation's stock a
redeemable security (as such term is defined in the 1940 Act) or reduces the
two-thirds vote required to authorize the actions listed in this paragraph.
This could have the effect of delaying, deferring or preventing changes in
control of the Corporation.
(c) Liquidation Rights: In the event of any voluntary or involuntary
liquidation, dissolution or winding up of the Corporation, after payment to
the Preferred Stockholders of an amount equal to $50 per share plus dividends
accrued or in arrears, the Common Stockholders are entitled, to the exclusion
of the Preferred Stockholders, to share ratably in all the remaining assets of
the Corporation available for distribution to stockholders.
(d) Other Provisions: Common Stockholders do not have preemptive,
subscription or conversion rights, and are not liable for further calls or
assessments. The Corporation's Board of Directors (other than any directors
who may be elected to represent Preferred Stockholders as described above) are
classified as nearly as possible into three equal classes with a maximum three
year term so that the term of one class of directors expires annually. Such
classification provides continuity of experience and stability of management
while providing for the election of a portion of the Board of Directors each
year. Such classification could have the effect of delaying, deferring or
preventing changes in control of the Corporation.
The Board of Directors may classify or reclassify any unissued stock of any
class with or without par value (including Preferred Stock and Common Stock)
into one or more classes of preference stock on a parity with, but not having
preference or priority over, the Preferred Stock by fixing or altering before
the issuance thereof the designations, preferences, voting powers,
restrictions and qualifications of, the fixed annual dividends on, the times
and prices of redemption, the terms of conversion, the number and/or par value
of the shares and other provisions of such stock to the full extent permitted
by the laws of Maryland and the Corporation's Charter. Stockholder approval of
such action is not required.
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<PAGE>
DESCRIPTION OF WARRANTS
The Corporation's Charter and Warrant certificates provide that each Warrant
represents the right during an unlimited time to purchase one share of Common
Stock at a price of $22.50 per share, subject to increase in the number of
shares purchasable and adjustment of the price payable pursuant to provisions
of the Charter requiring such adjustments whenever the Corporation issues any
shares of Common Stock at a price less than the Warrant purchase price in
effect immediately prior to issue. Each Warrant presently entitles the holder
to purchase 19.56 shares of Common Stock at $1.15 per share. There were 13,543
Warrants outstanding at March 31, 2000. Fractional shares of Common Stock are
not issued upon the exercise of Warrants. In lieu thereof, the Corporation
issues scrip certificates representing corresponding fractions of the right to
receive a full share of Common Stock if exchanged by the end of the second
calendar year following issuance or of the proceeds of the sale of a full
share if surrendered during the next four years thereafter.
COMPUTATION OF NET ASSET VALUE
Net asset value per share of Common Stock is determined by dividing the
current value of the assets of the Corporation less its liabilities and the
prior claim of the Preferred Stock by the total number of shares of Common
Stock outstanding. Securities owned by the Corporation for which market
quotations are readily available are valued at current market value or, in
their absence, fair value determined in accordance with procedures approved by
the Board of Directors at current market value. Securities traded on national
exchanges are valued at the last sales prices, or in their absence and in the
case of over-the-counter securities, a mean of bid and asked prices. United
Kingdom securities and securities for which there are no recent sales
transactions are valued based on quotations provided by primary market makers
in such securities. Any securities for which recent market quotations are not
readily available are valued at fair value determined in accordance with
procedures approved by the Board of Directors. Short-term holdings maturing in
60 days or less are generally valued at amortized cost if their original
maturity was 60 days or less. Short-term holdings with more than 60 days
remaining to maturity will be valued at current market value until the 61st
day prior to maturity, and will then be valued on an amortized cost basis
based on the value of such date unless the Board determines that this
amortized cost value does not represent fair market value.
All assets and liabilities initially expressed in foreign currencies will be
converted into U.S. dollars by a pricing service based upon the mean of the
bid and asked prices of such currencies against the U.S. dollar quoted by a
major bank which is a regular participant in the institutional foreign
exchange markets.
Net asset value of the Common Stock is determined daily, Monday through
Friday, as of the close of regular trading on the New York Stock Exchange
(normally, 4:00 p.m. Eastern time) each day the New York Stock Exchange is
open for trading.
DIVIDEND POLICY AND TAXES
Dividends: Dividends are paid quarterly on the Preferred Stock and on the
Common Stock in amounts representing substantially all of the net investment
income earned each year. Payments on the Preferred Stock are in a fixed
amount, but payments on the Common Stock vary in amount, depending on
investment income received and expenses of operation. Substantially all of any
taxable net gain realized on investments is paid to Common Stockholders at
least annually in accordance with requirements under the Internal Revenue Code
of
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<PAGE>
1986, as amended, and other applicable statutory and regulatory requirements.
Unless SDC is otherwise instructed by you, dividends on the Common Stock are
paid in cash and capital gain distributions are paid in book shares of Common
Stock which are entered in your Tri-Continental account as "book credits."
Long-term gain distributions ordinarily are paid in shares of Common Stock,
or, at your option, 75% in book shares and 25% in cash, or, in the
alternative, 100% in cash. Shares distributed in payment of gain distributions
are valued at market price or at net asset value, whichever is lower, on the
valuation date. Dividends and capital gain distributions will generally be
taxable to you in the year in which they are declared by the Corporation if
paid before February 1 of the following year. Distributions or dividends
received by you will have the effect of reducing the net asset value of the
shares of the Corporation by the amount of such distributions. If the net
asset value of shares is reduced below your cost by a distribution, the
distribution will be taxable as described below even though it is in effect a
return of capital.
Taxes: The Corporation intends to continue to qualify and elect to be
treated as a regulated investment company under the Internal Revenue Code. As
a regulated investment company, the Corporation will generally be exempt from
federal income taxes on net investment income and capital gains that it
distributes to stockholders provided that at least 90% of its investment
income and net short-term capital gains are distributed to stockholders each
year.
Dividends on Common or Preferred Stock representing net investment income
and distributions of net short-term capital gains are taxable to stockholders
as ordinary income, whether received in cash or invested in additional shares
and, to the extent designated as derived from the Corporation's dividend
income that would be eligible for the dividends received deduction if the
Corporation were not a regulated investment company, they are eligible,
subject to certain restrictions, for the 70% dividends received deduction for
corporations. Distributions of net capital gain (i.e., the excess of net long-
term capital gains over any net short-term capital losses) are taxable as
long-term capital gain, whether received in cash or invested in additional
shares, regardless of how long you have held your shares. Such distributions
are not eligible for the dividends received deduction allowed to corporate
stockholders. If you receive distributions in the form of additional shares
issued by the Corporation you will be treated for federal income tax purposes
as having received a distribution in an amount equal to the fair market value
on the date of distribution of the shares received. You will be subject to
federal income tax on net capital gains at a maximum rate of 20% if designated
as derived from the Corporation's capital gains from property held by the
Corporation for more than one year.
Any gain or loss you realize upon a sale or redemption of Common or
Preferred Stock if you are not a dealer in securities will generally be
treated as a long-term capital gain or loss if you held your shares for more
than one year and as a short-term capital gain or loss if you held your shares
for one year or less. 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 you realize will be
treated as long-term capital loss to the extent that it offsets the long-term
capital gain distribution. No loss will be allowed on the sale or other
disposition of shares of the Corporation if, within a period beginning 30 days
before the date of such sale or disposition and ending 30 days after such
date, you acquire (such as through the Automatic Dividend Investment and Cash
Purchase Plan), or enter into a contract or option to acquire, securities that
are substantially identical to the shares of the Corporation. Net capital gain
of a corporate stockholder is taxed at the same rate as ordinary income.
The Corporation will generally be subject to an excise tax of 4% on the
amount by which distributions to stockholders fall short of certain required
levels, such that income or gain is not taxable to stockholders in the
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<PAGE>
calendar year in which it was earned by the Corporation. Furthermore,
dividends declared in October, November or December payable to stockholders 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 Corporation and received by you in
December. Under this rule, therefore, you may be taxed in one year on
dividends or distributions actually received in January of the following year.
The tax treatment of the Corporation and of stockholders under the tax laws
of the various states may differ from the federal tax treatment. You are urged
to consult your own tax advisor regarding specific questions as to federal,
state or local taxes.
The Corporation is required to withhold and remit to the U.S. Treasury 31%
of taxable dividends and other reportable payments paid on your account if you
provide the Corporation with either an incorrect Taxpayer Identification
Number or no number at all or you fail to certify that you are not subject to
such withholding. You 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. The Corporation may charge you a service fee of up to $50 for
accounts not having a certified Taxpayer Identification Number. Certificates
will not be issued unless an account is certified.
INVESTMENT PLANS AND OTHER SERVICES
Automatic Dividend Investment and Cash Purchase Plan
The Automatic Dividend Investment and Cash Purchase Plan is available for
any Common stockholder who wishes to purchase additional shares of the
Corporation's Common Stock with dividends or other cash payments on shares
owned, with cash dividends paid by other corporations in which is owned stock
or with cash funds. Details of the services offered under the Plan are given
in the Authorization Form appearing in this Prospectus. Under the Plan, you
appoint the Corporation as your purchase agent to receive or invest such
dividends and cash funds forwarded by you for your accounts in additional
shares of the Corporation's Common Stock (after deducting a service charge),
as described under "Method of Purchase" below. Funds forwarded by you under
the Plan should be made payable to Tri-Continental Corporation and mailed to
Tri-Continental Corporation, P.O. Box 9766, Providence, RI 02940-9766. Checks
for investment must be in U.S. dollars drawn on a domestic bank. Credit card
convenience checks and third party checks, i.e., checks made payable to a
party other than Tri-Continental Corporation, may not be used to purchase
shares under this Plan. You should direct all correspondence concerning the
Plan to Seligman Data Corp., 100 Park Avenue, New York, NY 10017. At present,
a service fee of up to a maximum of $2.00 will be charged for each cash
purchase transaction. There is no charge for Automatic Dividend Investment. As
of March 31, 2000, 34,002 stockholders, owning 50,315,646 shares of Common
Stock, were using the Plan. You may choose one or more of the services under
the Plan and you may change your choices (or terminate participation) at any
time by notifying SDC in writing. The Plan may be amended or terminated by
written notice to Planholders.
Automatic Check Service
The Automatic Check Service enables you, if you are an Automatic Dividend
Investment and Cash Purchase Planholder, to authorize checks to be drawn on
your regular checking account at regular intervals for fixed amounts to be
invested in additional shares of Common Stock for your account. An
Authorization Form to be used to start the Automatic Check Service is included
in this Prospectus.
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<PAGE>
Share Keeping Service
You may send certificates for shares of the Corporation's Common Stock to
SDC to be placed in your account. Certificates should be sent to Seligman Data
Corp., 4400 Computer Drive, Westborough, MA 01581-5120, with a letter
requesting that they be placed in your account. You should not sign the
certificates and they should be sent by certified or registered mail. Return
receipt is advisable; however, this may increase mailing time. When your
certificates are received by SDC, the shares will be entered in your Tri-
Continental account as "book credits" and shown on the Statement of Account
received from SDC. If you use the Share Keeping Service you should keep in
mind that you must have a stock certificate for delivery to a broker if you
wish to sell shares. A certificate will be issued and sent to you on your
written request to SDC, usually within two business days of the receipt of
your request. You should consider the time it takes for a letter to arrive at
SDC and for a certificate to be delivered to you by mail before you choose to
use this service.
Tax-Deferred Retirement Plans
Shares of the Corporation may be purchased for:
--Individual Retirement Accounts (IRAs) (available to current stockholders
only);
--Savings Incentive Match Plans for Employees (SIMPLE IRAs);
--Simplified Employee Pension Plans (SEPs);
--Section 401(k) Plans for corporations and their employees; and
--Money Purchase Pension and Profit Sharing Plans for sole proprietorships,
partnerships and corporations.
These types of plans may be established only upon receipt of a written
application form. The Corporation may register an IRA investment for which an
account application has not been received as on ordinary taxable account.
For more information, write Retirement Plan Services, Seligman Data Corp.,
100 Park Avenue, New York, NY 10017. You may telephone toll-free by dialing
(800) 445-1777 from all United States.
Investors Fiduciary Trust Company acts as trustee and custodian and performs
other related services with respect to the Plans.
J. & W. Seligman & Co. Incorporated Matched Accumulation Plan
The Manager has a Matched Accumulation Plan ("Profit-Sharing Plan") which
provides that, through payroll deductions which may be combined with matching
contributions and through any profit sharing distribution made by the Manager
to the Profit-Sharing Plan, eligible employees of the Manager, Seligman
Advisors, Inc. and Seligman Services, Inc. may designate that the payroll
deductions and contributions made by the Manager and invested by the Plan
trustee, be invested in certain investment companies for which the Manager
serves as investment adviser. One such fund consists of Common Stock of the
Corporation purchased by the trustee as described under "Method of Purchase."
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<PAGE>
Seligman Data Corp. Employees' Thrift Plan
SDC has an Employees' Thrift Plan ("Thrift Plan") which provides a
systematic means by which savings, through payroll deductions, of eligible
employees of SDC may be combined with matching contributions made by the
company and invested by the Plan trustee, in certain investment companies for
which the Manager serves as investment adviser, as designated by the employee.
One such fund consists of Common Stock of the Corporation purchased by the
trustee as described under "Method of Purchase."
Method of Purchase
Purchases will be made by the Corporation from time to time on the New York
Stock Exchange or elsewhere to satisfy dividend and cash purchase investments
under the Automatic Dividend Investment and Cash Purchase Plan, tax-deferred
retirement plans, and the investment plans noted above. Purchases will be
suspended on any day when the closing price (or closing bid price if there
were no sales) of the Common Stock on the New York Stock Exchange on the
preceding trading day was higher than the net asset value per share (without
adjustment for the exercise of Warrants remaining outstanding). If on the
dividend payable date or the date shares are issuable to stockholders making
Cash Purchase investments under the Plan (the "Issuance Date"), shares
previously purchased by the Corporation are insufficient to satisfy dividend
or Cash Purchase investments and on the last trading day immediately preceding
the dividend payable date or the Issuance Date the closing sale or bid price
of the Common Stock is lower than or the same as the net asset value per
share, the Corporation will continue to purchase shares until a number of
shares sufficient to cover all investments by stockholders has been purchased
or the closing sale or bid price of the Common Stock becomes higher than the
net asset value, in which case the Corporation will issue the necessary
additional shares. If on the last trading date immediately preceding the
dividend payable date or Issuance Date, the closing sale or bid price of the
Common Stock was higher than the net asset value per share, and if shares of
the Common Stock previously purchased on the New York Stock Exchange or
elsewhere are insufficient to satisfy dividend or Cash Purchase investments,
the Corporation will issue the necessary additional shares from authorized but
unissued shares of the Common Stock.
Shares will be issued on the dividend payable date or the Issuance Date at a
price equal to the lower of (1) the closing sale or bid price, plus
commission, of the Common Stock on the New York Stock Exchange on the ex-
dividend date or Issuance Date or (2) the greater of the net asset value per
share of the Common Stock on such trading day (without adjustment for the
exercise of Warrants remaining outstanding) and 95% of the closing sale or bid
price of the Common Stock on the New York Stock Exchange on such trading day.
In the past, the Common Stock ordinarily has been priced in the market at less
than net asset value per share.
The net proceeds to the Corporation from the sale of any shares of Common
Stock to the Plans will be added to its general funds and will be available
for additional investments and general corporate purposes. The Manager
anticipates that investment of any proceeds, in accordance with the
Corporation's investment objective and policies, will take up to thirty days
from their receipt by the Corporation, depending on market conditions and the
availability of appropriate securities, but in no event will such investment
take longer than six months. Pending such investment in accordance with the
Corporation's objective and policies, the proceeds will be held in U.S.
Government Securities (which term includes obligations of the United States
Government, its agencies or instrumentalities) and other short-term money
market instruments.
If you are participating in the Automatic Dividend Investment and Cash
Purchase Plan and your shares are held under the Plan in book credit form you
may terminate your participation in the Plan and receive a certificate
19
<PAGE>
for all or a part of your shares or have all or a part of your shares sold for
you by the Corporation and retain unsold shares in book credit form or receive
a certificate for any shares not sold. Instructions must be signed by all
registered stockholders and should be sent to Seligman Data Corp., 4400
Computer Drive, Westborough, MA 01581-5120. If you elect to have shares sold
you will receive the proceeds from the sale, less any brokerage commissions.
Only participants whose shares are held in book credit form may elect upon
termination of their participation in the Plan to have shares sold in the
above manner. All other stockholders of the Corporation must sell shares
through a registered broker/dealer. As an additional measure to protect you
and the Corporation, SDC may confirm written instructions when the value of
the shares being sold is $25,000 or more, or when proceeds are directed to be
paid to an address or payee different from that on our records, with you by
telephone before sending you your money. This will not affect the date on
which your instruction to sell shares is actually processed. Whenever the
value of the shares being sold is $50,000 or more, or the proceeds are to be
paid or mailed to an address or payee different from that on our records, the
signature of all stockholders must be guaranteed by an eligible financial
institution including, but not limited to, the following: banks, trust
companies, credit unions, securities brokers and dealers, savings and loan
associations and participants in the Securities Transfer Association Medallion
Program (STAMP), the Stock Exchanges Medallion Program ("SEMP") and the New
York Stock Exchange Medallion Signature Program ("MSP"). Notarization by a
notary public is not an acceptable signature guarantee. The Corporation
reserves the right to reject a signature guarantee where it is believed that
the Corporation will be placed at risk by accepting such guarantee.
Systematic Withdrawal Plan
This Plan is available if you wish to receive fixed payments from your
investment in the Common Stock in any amount at specified regular intervals.
You may start a Systematic Withdrawal Plan if your shares of the Corporation's
Common Stock have a market value of $5,000 or more. Shares must be held in
your account as book credits. SDC will act for you, make payments to you in
specified amounts on either the 1st or 15th day of each month, as designated
by you, and maintain your account. There is a charge by the agent of $1.00 per
withdrawal payment for this service. This charge may be changed from time to
time.
Payments under the Withdrawal Plan will be made by selling exactly enough
full and fractional shares of Common Stock to cover the amount of the
designated withdrawal. Sales may be made on the New York Stock Exchange, to
the agent or a trustee for one of the other Plans, or elsewhere. Payments from
sales of shares will reduce the amount of capital at work and dividend earning
ability, and ultimately may liquidate the investment. Sales of shares may
result in gain or loss for income tax purposes. Withdrawals under this Plan or
any similar Withdrawal Plan of any other investment company, concurrent with
purchases of shares of the Common Stock or of shares of any other investment
company, will ordinarily be disadvantageous to the Planholder because of the
payment of duplicative commission or sales loads.
Stockholder Information
SDC maintains books and records for all of the Plans, and confirms
transactions to Stockholders. To insure prompt delivery of checks, account
statements and other information, you should notify SDC immediately, in
writing, of any address changes. If you close your account during any year it
is important that you notify SDC of any subsequent address changes to ensure
that you receive a year-end statement and tax information for that year. You
will be sent reports quarterly regarding the Corporation. General information
about the Corporation may be requested by writing the Corporate
Communications/Investor Relations Department, J. & W. Seligman
20
<PAGE>
& 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 United States. You may call (212) 850-1864 in New York State and
in the greater New York City area. Information about your account (other than
a retirement plan account), may be requested by writing Stockholder Services,
Seligman Data Corp., at the same address or by toll-free telephone by dialing
(800) 874-1092 from all United States or 212-682-7600 outside the United
States. For information about a retirement account, call Retirement Plan
Services toll-free at (800) 445-1777 or write Retirement Plan Services,
Seligman Data Corp. at the above address. SDC may be telephoned Monday through
Friday (except holidays) between the hours of 8:30 a.m. and 6:00 p.m. Eastern
time. Your call will be answered by a service representative.
24-hour automated telephone access is available by dialing (800) 622-4597
(within the United States) on a touchtone telephone, which provides instant
access to price, account balance, most recent transaction and other
information. In addition, you may request Account Statements and Form 1099-
DIV.
ISSUANCE OF SHARES IN CONNECTION WITH ACQUISITIONS
The Corporation may issue shares of its Common Stock in exchange for the
assets of another investing company in transactions in which the number of
shares of Common Stock of the Corporation to be delivered will be generally
determined by dividing the current value of the seller's assets by the current
per share net asset value or market price on the New York Stock Exchange of
the Common Stock of the Corporation, or by an intermediate amount. In such
acquisitions, the number of shares of the Corporation's Common Stock to be
issued will not be determined on the basis of the market price of such Common
Stock if such price is lower than its net asset value per share, except
pursuant to an appropriate order of the Securities and Exchange Commission or
approval by stockholders of the Corporation, as required by law. The
Corporation is not presently seeking to acquire the assets of any investing
company, but it may acquire the assets of companies from time to time in the
future.
Some or all of the stock so issued may be sold from time to time by the
recipients or their stockholders through brokers in ordinary transactions on
stock exchanges at current market prices. The Corporation has been advised
that such sellers may be deemed to be underwriters as that term is defined in
the 1933 Act.
ADDITIONAL INFORMATION
During 1999, the Corporation had transactions in the ordinary course of
business with firms and companies of which one or more directors and officers
was a director and/or officer of the Corporation, and it is expected that the
Corporation will continue to have transactions of such nature during the
current year.
21
<PAGE>
TABLE OF CONTENTS OF THE
STATEMENT OF ADDITIONAL INFORMATION
The table of contents of the SAI is as follows:
TABLE OF CONTENTS
<TABLE>
<S> <C>
Additional Investment Policies............................................ 2
Directors and Officers.................................................... 5
Holdings of Preferred Stock, Common Stock and Warrants.................... 9
Management................................................................ 9
Experts................................................................... 10
Custodian, Stockholder Service Agent and Dividend Paying Agent............ 10
Brokerage Commissions..................................................... 11
Incorporation of Financial Statements by Reference........................ 11
Independent Auditors' Report on Financial Highlights--Senior Securities--
$2.50 Cumulative Preferred Stock......................................... 12
Appendix.................................................................. 13
</TABLE>
22
<PAGE>
AUTHORIZATION FORM
for
AUTOMATIC DIVIDEND
[TRI-CONTINENTAL CORPORATION LOGO] INVESTMENT
AND CASH PURCHASE PLAN
To:Seligman Data Corp. . AUTOMATIC
P.O. Box 9759 DIVIDEND
Providence, Rhode Island 02940-9759 INVESTMENT
. AUTOMATIC
INVESTMENT OF
OTHER
CORPORATIONS'
DIVIDENDS
. CASH PURCHASE
PLAN
. AUTOMATIC CHECK
SERVICE
Date.....................
Gentlemen:
I own shares of Tri-Continental Corporation Common Stock registered as shown
below:
ACCOUNT REGISTRATION
- -------------------------------------------------------------------------------
Stockholder's Name (print or type) Stockholder's Signature*
- -------------------------------------------------------------------------------
Co-Holder's Name Co-Holder's Signature*
- -------------------------------------------------------------------------------
Address (street and number) Taxpayer Identification Number
- -------------------------------------------------------------------------------
City State Zip Code Stockholder Account Number, if known
* If shares are held or to be held in more than one name, all must sign, and
plural pronouns will be implied in the text. In the case of co-holders, a
joint tenancy with right of survivorship will be presumed unless otherwise
specified.
Under penalties of perjury I certify that the number shown on this form is my
correct Taxpayer Identification Number (Social Security Number) and that I am
not subject to backup withholding either because I have not been notified that
I am subject to backup withholding as a result of failure to report all
interest or dividends, or the Internal Revenue Service has notified me that I
am no longer subject to backup withholding. I certify that to my legal
capacity to purchase or sell shares of the Corporation for my own Account, or
for the Account of the organization named above. I have received a current
Prospectus of the Corporation and appoint Seligman Data Corp. as my agent to
act in accordance with my instructions herein.
- ------------ -----------------------------------------------------------------
Date Stockholder's Signature
I have read the Terms and Conditions of the Automatic Dividend Investment
and Cash Purchase Plan and the current Prospectus, a copy of which I have
received, and I wish to establish a Plan to use the Services checked below:
SERVICE(S) DESIRED
[_]Automatic Investment of Tri-Continental Dividends
I wish to have my quarterly dividends invested in additional shares, and
distributions from gains paid as follows:
[_]Credited to my account in additional full and fractional shares.
[_]Credited 75% to my account in shares and 25% paid to me in cash.
[_]Automatic Investment of Other Corporation's Dividends
I intend to give orders for the payment of cash dividends from other
corporations to be invested in shares of Tri-Continental Common Stock for
my account.
Note: Checks in payment of dividends from other corporations should
indicate your name and Tri-Continental account number. The checks should
be made payable to the order of Tri-Continental Corporation and be mailed
to Seligman Data Corp., P.O. Box 9766, Providence, Rhode Island 02940-
9766.
[_]Cash Purchases
I intend to send funds from time to time to be invested in shares of Tri-
Continental Common Stock for my account.
Note: Your checks should indicate your name and Tri-Continental account
number. Make all checks payable to Tri-Continental Corporation and mail to
Seligman Data Corp., P.O. Box 9766, Providence, Rhode Island 02940-9766.
[_]Automatic Check Service
I have completed the Authorization Form to have pre-authorized checks
drawn on my regular checking account at regular intervals for investment
in shares of Tri-Continental Common Stock.
5/00
23
<PAGE>
AUTHORIZATION FORM
for
[TRI-CONTINENTAL CORPORATION LOGO] AUTOMATIC CHECK
SERVICE
To start your Automatic Check Service, fill out this form and forward it with
an unsigned bank check from your regular checking account (marked "void") to:
Seligman Data Corp.
P.O. Box 9759
Providence, Rhode Island 02940-9759
Date.........................
Gentlemen:
I own shares of Tri-Continental Corporation Common Stock, registered as
shown below, which are entered in the Automatic Dividend Investment and Cash
Purchase Plan.
1. Stockholder Account Number (if known) ______________________________________
2. AUTOMATIC CHECK SERVICE
Please arrange with my bank to draw pre-authorized checks on my regular
checking account and invest $ in shares of Tri-Continental Common
Stock every:
[_] month [_] 3 months
I have completed the "Bank Authorization to Honor Pre-Authorized Checks"
which appears below and have enclosed one of my bank checks marked "void." I
understand that my checks will be invested on the fifth day of the month and
that I must remember to deduct the amount of my investment as it is made from
my checking account balance.
BANK AUTHORIZATION TO HONOR PRE-AUTHORIZED CHECKS
To:
______________________________________________________________________________
(Name of Bank)
______________________________________________________________________________
(Address of Bank or Branch, Street, City, State and Zip)
Please honor pre-authorized checks drawn on my account by Seligman Data Corp.,
100 Park Avenue, New York, NY 10017, to the order of Tri-Continental
Corporation, and charge them to my checking account. Your authority to do so
shall continue until you receive written notice from me revoking it. You may
terminate your participation in this arrangement at any time by written notice
to me. I agree that your rights with respect to each pre-authorized check
shall be the same as if it were a check drawn and signed by me. I further
agree that should any such check be dishonored, with or without cause,
intentionally or inadvertently, you shall be held under no liability
whatsoever.
- -------------------------------------------------------------------------------
Checking Account No.
- -------------------------------------------------------------------------------
Name(s) of Depositor(s)--Please Print Signature(s) of Depositor(s)--As
carried by Bank
- -------------------------------------------------------------------------------
Address (Street) City State Zip Code
5/00
24
<PAGE>
(This page intentionally left blank)
<PAGE>
TERMS AND CONDITIONS
The Automatic Dividend Investment and Cash Purchase Plan provides Tri-
Continental Common Stockholders with four ways to add to their investments: 1)
with Tri-Continental dividends and distributions, 2) with cash dividends from
other corporations, 3) with cash payments, in any amount at any time, and 4)
with cash provided by pre-authorized checks through the Automatic Check
Service. A Planholder may use any or all of these Services, subject to the
following terms and conditions:
1. Seligman Data Corp. ("SDC"), as Plan service agent, will maintain
accounts and confirm to Planholders, as soon as practicable after each
investment, the number of shares of Common Stock acquired and credited to the
accounts and the cost. Tri-Continental Corporation (the "Corporation"), as
purchase agent, will purchase shares for Planholders. All checks for dividends
payable by other corporations or for cash purchase payments sent by
Planholders for investment in additional shares of Tri-Continental Common
Stock should be drawn to the order of Tri-Continental Corporation and mailed
to Seligman Data Corp., P.O. Box 9766, Providence, Rhode Island 02940-9766.
2. Funds received by the Corporation for a Planholder will be combined with
funds of other Planholders and those funds may be combined with funds
available under the plans for the purchase of Tri-Continental Common Stock in
order to minimize brokerage commissions on shares purchased. Shares will be
purchased in accordance with the current Prospectus. Dividends from other
corporations and purchase cash received from Planholders or through the
Automatic Check Service will be invested at least once each 30 days.
3. The cost of shares acquired for each Plan will be the average cost,
including brokerage commissions and any other costs of acquisition, of all
shares acquired for all Planholders in connection with a particular
investment.
4. No stock certificates will be delivered for shares acquired unless the
Plan account is terminated or the Planholder requests their delivery by
writing to SDC. The shares acquired will be held in each Planholder's account
as book credits.
5. Certificates held by a Planholder, or subsequently received, may be sent
to SDC for credit to a Plan account. A certificate for any full shares held in
a Plan account will be issued at a Planholder's request. The time required to
obtain a certificate to sell through a broker, or for other purposes, will be
that needed to send a written request to SDC to withdraw the certificate
(normally two business days) and to mail the certificate to the Planholder
through the U.S. Postal Service.
6. A maximum service charge of $2.00 will be deducted before each investment
is made for a Plan account. There is no charge for Automatic Dividend
Investment.
7. Applications for the Automatic Check Service are subject to acceptance by
the Planholder's bank and SDC. SDC will prepare Automatic Check Service checks
with the same magnetic ink numbers that are on a Planholder's check and will
arrange with the Planholder's bank to start the Service in accordance with the
Planholder's instructions. A minimum of 30 days from the date of receipt of an
application by SDC is required to contact the bank and initiate the Service.
If for any reason the bank is unable to honor a pre-authorized check request,
the Planholder will be notified promptly.
Shares with a market value of at least two times the amount of the
authorized checks must be held as book credits for the Planholder's account by
SDC. If any check is dishonored or if the value of shares held by SDC in an
account falls below the required minimum, the Service may be suspended. The
Service may be reinstated upon written request by the Planholder including an
indication that the cause of the interruption has been corrected.
If a Planholder's check is not honored by the Planholder's bank at any time,
SDC is authorized to sell exactly enough full and fractional shares from the
Planholder's account to equal the amount of the dishonored check.
8. A Planholder or SDC may terminate a Plan account at any time upon notice
in writing before the record date of a dividend or distribution by Tri-
Continental. A Plan account will terminate automatically if the Planholder
sells or transfers all of the shares in the Plan account. If a Plan account is
terminated, a certificate for the full shares held may be issued and sent to
the Planholder, and any fractional shares may be liquidated at the
Planholder's request. Terminating Planholders may elect to have all or part of
their shares sold by the Corporation, if their shares are held in book credit
form. If a Plan account is terminated between the record and payment dates of
a dividend, the dividend payment will be made in cash.
9. In acting under this Plan, the Corporation and SDC will be liable only
for willful misfeasance or gross negligence.
10. A Planholder may adopt or suspend one or more of the Plan Services by
sending a revised Authorization Form or notice in writing to SDC.
11. All additional shares registered in a Planholder's name which are
acquired under one or more of the Plan Services or by other means will
participate automatically in each of the Plan services elected.
26
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[Tri Continental Corporation Logo]
an investment you can live with
100 Park Avenue
New York, New York 10017
INVESTMENT MANAGER
J. & W. Seligman & Co.
Incorporated
100 Park Avenue
New York, New York 10017
STOCKHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, New York 10017
PORTFOLIO SECURITIES CUSTODIAN
Investors Fiduciary Trust Company
801 Pennsylvania
Kansas City, Missouri 64105
GENERAL COUNSEL
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
------------
Listed on the
New York Stock Exchange
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CETRI 1 5/00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[Tri-Continental Corporation Logo]
an investment you can live with
A Management Type
Diversified, Closed-End
Investment Company
------------
Common Stock
($.50 par value)
------------
PROSPECTUS
May 1, 2000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TRI-CONTINENTAL CORPORATION
Statement of Additional Information
May 1, 2000
100 Park Avenue
New York, New York 10017
New York City Telephone: (212) 682-7600
Toll-Free Telephone: (800) 874-1092 all United States
For Retirement Plan Information - Toll-Free Telephone: (800) 445-1777
This Statement of Additional Information ("SAI") is not a prospectus. This SAI
relates to the Prospectus dated May 1, 2000, and should be read in conjunction
therewith. A copy of the Prospectus may be obtained from Tri-Continental
Corporation at 100 Park Avenue, New York, NY 10017.
A registration statement relating to these securities has been filed with the
Securities and Exchange Commission (the "Commission").
Table of Contents
-----------------
<TABLE>
<S> <C>
Additional Investment Policies (See "Investment
Objective and Other Policies and Related
Risks" in the Prospectus)..................... 2
Directors and Officers.......................... 5
Holdings of Preferred Stock, Common Stock and
Warrants...................................... 9
Management (See "Management of the Corporation"
in the Prospectus)............................ 9
Experts......................................... 10
Custodian, Stockholder Service Agent and
Dividend Paying Agent......................... 10
Brokerage Commissions........................... 11
Incorporation of Financial Statements by
Reference..................................... 11
Independent Auditors' Report on Financial
Highlights -
-- Senior Securities -- $2.50 Cumulative
Preferred Stock............................... 12
Appendix........................................ 13
</TABLE>
<PAGE>
ADDITIONAL INVESTMENT POLICIES
The investment objectives and policies of the Corporation are set forth in the
Prospectus. Certain additional investment information is set forth below.
Defined terms used herein and not otherwise defined shall have the meanings
ascribed to them in the Prospectus.
The Corporation's stated fundamental policies, which may not be changed without
a vote of stockholders are listed below; within the limits of these fundamental
policies, the management has reserved freedom of action. The Corporation:
(1) may issue senior securities such as bonds, notes or other evidences of
indebtedness if immediately after issuance the net assets of the Corporation
provide 300% coverage of the aggregate principal amount of all bonds, notes or
other evidences of indebtedness and that amount does not exceed 150% of the
capital and surplus of the Corporation;
(2) may issue senior equity securities on a parity with, but not having
preference or priority over, the Preferred Stock if immediately after issuance
its net assets are equal to at least 200% of the aggregate amount (exclusive of
any dividends accrued or in arrears) to which all shares of the Preferred Stock,
then outstanding, shall be entitled as a preference over the Common Stock in the
event of voluntary or involuntary liquidation, dissolution or winding up of the
Corporation;
(3) may borrow money for substantially the same purposes as it may issue
senior debt securities, subject to the same restrictions and to any applicable
limitations prescribed by law;
(4) may engage in the business of underwriting securities either directly
or through majority-owned subsidiaries subject to any applicable restrictions
and limitations prescribed by law;
(5) does not intend to concentrate its assets in any one industry although
it may from time to time invest up to 25% of the value of its assets, taken at
market value, in a single industry;
(6) may not, with limited exceptions, purchase and sell real estate
directly but may do so through majority-owned subsidiaries, so long as its real
estate investments do not exceed 10% of the value of the Corporation's total
assets;
(7) may not purchase or sell commodities or commodity contracts; and
(8) may make money loans (subject to restrictions imposed by law and by
charter) (a) only to its subsidiaries, (b) as incidents to its business
transactions or (c) for other purposes. It may lend its portfolio securities to
brokers or dealers in corporate or government securities, banks or other
recognized institutional borrowers of securities subject to any applicable
requirements of a national securities exchange or of a governmental regulatory
body against collateral consisting of cash or direct obligations of the United
States, maintained on a current basis, so long as all such loans do not exceed
10% of the value of total assets, and it may make loans represented by
repurchase agreements, as described in the Prospectus, so long as such loans do
not exceed 10% of the value of total assets.
When securities are loaned, the Corporation receives from the borrower the
equivalent of dividends or interest paid by the issuer of securities on loan
and, at the same time, makes short-term investments with the cash collateral and
retains the interest earned, after payment to the borrower or placing broker of
a negotiated portion of such interest, or receives from the borrower an agreed
upon rate of interest in the case of loans collateralized by direct obligations
of the United States. The Corporation does not have the right to vote
securities on loan, but would expect to terminate the loan and regain the right
to vote if that were considered important with respect to the investment.
During its last three fiscal years, the Corporation did not: (a) issue senior
securities; (b) borrow any money; (c) underwrite securities; (d) concentrate
investments in particular industries or groups of industries; (e) purchase or
sell real estate, commodities, or commodity contracts; or (f) make money loans
or lend portfolio securities.
2
<PAGE>
In order to take advantage of opportunities that may be provided by debt
instruments of foreign issuers, the Corporation may from time to time invest up
to 3% of its assets in debt securities issued or guaranteed by a foreign
government or any of its political subdivisions, authorities, agencies or
instrumentalities and in related forward contracts. The Manager will determine
the percentage of assets invested in securities of a particular country or
denominated in a particular currency in accordance with its assessment of the
relative yield and appreciation potential of such securities and the
relationship of a country's currency to the U.S. dollar. Currently, the
Corporation will invest in securities denominated in foreign currencies or U.S.
dollars of issuers located in the following countries: Australia, Austria,
Belgium, Canada, Denmark, France, Germany, Hong Kong, Italy, Japan, Malaysia,
Mexico, the Netherlands, New Zealand, Norway, Singapore, Spain, Sweden,
Switzerland, Thailand and the United Kingdom. An issuer of debt securities
purchased by the Corporation may be domiciled in a country other than the
country in whose currency the instrument is denominated.
The Corporation's returns on foreign currency denominated debt instruments can
be adversely affected by changes in the relationship between the U.S. dollar and
foreign currencies. The Corporation may engage in currency exchange
transactions to protect against uncertainty in the level of future exchange
rates in connection with hedging and other non-speculative strategies involving
specific settlement transactions or portfolio positions. The Corporation will
conduct its currency exchange transactions either on a spot (i.e., cash) basis
at the rate prevailing in the currency market or through forward contracts.
Rights and Warrants. The Corporation may not invest in rights and warrants
if, at the time of acquisition, the investment in rights and warrants would
exceed 5% of the Corporation'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 by the Corporation in units
or attached to securities may be deemed to have been purchased without
cost.
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
Corporation 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 Corporation may enter into a forward contract to sell or buy the amount of a
foreign currency it believes may experience a substantial movement against the
U.S. dollar. In this case the contract would approximate the value of some or
all of the Corporation's portfolio securities denominated in such foreign
currency. Under normal circumstances, the portfolio manager will limit forward
currency contracts to not greater than 75% of the Corporation'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 Corporation. Under extraordinary circumstances, the Manager may enter
into forward currency contracts in excess of 75% of the Corporation'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 securities
involved will not generally be possible since the future value of such
securities in foreign currencies will change as a consequence of market
involvement 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 Corporation may commit up to the entire value of its assets which are
denominated in foreign currencies to the consummation of these contracts. The
Manager will consider the effect a substantial commitment of its assets to
forward contracts would have on the investment program of the Corporation and
its ability to purchase additional securities.
Except as set forth above and immediately below, the Corporation 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 Corporation to deliver
an amount of foreign currency in excess of the value of the Corporation's
portfolio securities or other assets denominated in that currency. The
Corporation, 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 Corporation'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
3
<PAGE>
the amount of such excess. Under normal circumstances, consideration of the
prospect for currency parties will be incorporated into the longer-term
investment decisions made with regard to overall diversification strategies.
However, the Manager believes that it is important to have the flexibility to
enter into such forward contracts when it determines that the best interests of
the Corporation will be served.
At the maturity of a forward contract, the Corporation 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 Corporation 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
Corporation 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 Corporation is obligated to deliver. However, the
Corporation 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 Corporation retains the portfolio security and engages in offsetting
transactions, the Corporation will incur a gain or a loss (as described below)
to the extent that there has been movement in forward contract prices. If the
Corporation 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 Corporation'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 Corporation
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 Corporation 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 Corporation's dealing in forward foreign currency exchange contracts will be
limited to the transactions described above. Of course, the Corporation 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
Manager. It also should be realized that this method of hedging against a
decline in the value of a currency does not eliminate fluctuations in the
underlying prices of the securities. It simply establishes a rate of exchange
at a future date. Additionally, although such contracts tend to minimize the
risk of loss due to a decline in the value of a hedged currency, at the same
time, they tend to limit any potential gain which might result from an increase
in the value of that currency.
Stockholders 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 Corporation at one rate, while offering a lesser rate of
exchange should the Corporation desire to resell that currency to the dealer.
Investment income received by the Corporation 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 Corporation 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 Corporation's assets to be invested within
various countries is not known.
4
<PAGE>
DIRECTORS AND OFFICERS
A listing of the directors and officers of the Corporation and their business
experience for the past five years follows. An asterisk (*) indicates directors
who are "interested persons" of the Corporation (as defined by the Investment
Company Act of 1940 (the "1940 Act"). Unless otherwise noted, the address of
each director and officer is 100 Park Avenue, New York, NY 10017.
WILLIAM C. MORRIS* Director, Chairman of the Board, Chief Executive Officer
(62) and Chairman of the Executive Committee
Chairman, J. & W. Seligman & Co. Incorporated; Chairman and
Chief Executive Officer, the Seligman Group of investment
companies; Chairman, Seligman Advisors, Inc.; Seligman
Services, Inc.; and Carbo Ceramics Inc., ceramic proppants
for oil and gas industry; Director, Seligman Data Corp.;
Kerr-McGee Corporation, diversified energy company; and
Sarah Lawrence College. Formerly, Director, Daniel
Industries Inc., manufacturer of oil and gas metering
equipment.
BRIAN T. ZINO* Director, President and Member of the Executive Committee
(47)
Director and President, J. & W. Seligman & Co. Incorporated;
President (with the exception of Seligman Quality Municipal
Fund, Inc. and Seligman Select Municipal Fund, Inc.) and
Director or Trustee, the Seligman Group of investment
companies; Chairman, Seligman Data Corp.; Member of the
Board of Governors of the Investment Company Institute; and
Director, ICI Mutual Insurance Company, Seligman Advisors,
Inc., and Seligman Services, Inc.
RICHARD R. SCHMALTZ* Director and Member of the Executive Committee
(59)
Director and Managing Director, Director of Investments, J.
& W. Seligman & Co. Incorporated; Director or Trustee, the
Seligman Group of investment companies (except Seligman Cash
Management Fund, Inc.); and Trustee Emeritus of Colby
College. Formerly, Director, Seligman Henderson Co. and
Director, Investment Research at Neuberger & Berman from May
1993 to September 1996.
JOHN R. GALVIN Director
(70)
Dean, Fletcher School of Law and Diplomacy at Tufts
University; Director or Trustee, the Seligman Group of
investment companies; Chairman Emeritus of the American
Council on Germany; a Governor of the Center for Creative
Leadership; Director, the National Defense University; the
Institute for Defense Analyses; and Raytheon Co.,
electronics. Formerly, Director, USLIFE Corporation, life
insurance; Ambassador, U.S. State Department for
negotiations in Bosnia; Distinguished Policy Analyst at Ohio
State University and Olin Distinguished Professor of
National Security Studies at the United States Military
Academy. From June, 1987 to June, 1992, he was the Supreme
Allied Commander, Europe and the Commander-in-Chief, United
States European Command.
Tufts University, Packard Avenue, Medford, MA 02155.
5
<PAGE>
ALICE S. ILCHMAN Director
(65)
Retired President, Sarah Lawrence College; Director or
Trustee, the Seligman Group of investment companies;
Trustee, the Committee for Economic Development; Chairman,
The Rockefeller Foundation, charitable foundation. Formerly,
Trustee, The Markle Foundation, philanthropic organization;
and Director, New York Telephone Company, and International
Research and Exchange Board, intellectual exchanges. 18
Highland Circle, Bronxville, New York 10708
FRANK A. McPHERSON Director
(67)
Retired Chairman of the Board and Chief Executive Officer,
Kerr-McKee Corporation; Director or Trustee, the Seligman
Group of investment companies; Director, Kimberly-Clark
Corporation, consumer products; Conoco Inc, oil exploration
and production; Bank of Oklahoma Holding Company; Baptist
Medical Center; Oklahoma Chapter of the Nature Conservancy;
Oklahoma Medical Research Foundation; and National Boys and
Girls Clubs of America; and President of the Oklahoma
Foundation for Excellence in Education. Formerly, Chairman
of the Oklahoma City Chamber of Commerce, and the Oklahoma
City Public Schools Foundation; a Director, Federal Reserve
System's Kansas City Reserve Bank; and a Member of the
Business Roundtable.
2601 Northwest Expressway, Suite 805E,Oklahoma City, OK
73112
JOHN E. MEROW Director
(70)
Retired Chairman and Senior Partner, Sullivan & Cromwell,
law firm; Director or Trustee, the Seligman Group of
investment companies; Director, Commonwealth Industries,
Inc., manufacturer of aluminum sheet products; the Foreign
Policy Association; Municipal Art Society of New York; the
U. S. Council for International Business; and Chairman, New
York-Presbyterian Healthcare Network, Inc. and Trustee, New
York-Presbyterian Hospital; Vice- Chairman, the U.S.-New
Zealand Council; and Member of the American Law Institute
and the Council on Foreign Relations.
125 Broad Street, New York, NY 10004
BETSY S. MICHEL Director
(57)
Attorney; Director or Trustee, the Seligman Group of
investment companies; Trustee, The Geraldine R. Dodge
Foundation, charitable foundation. Formerly, Chairman of the
Board of Trustees of St. George's School (Newport, RI) and,
Director, the National Association of Independent Schools
(Washington DC).
P.O. Box 719, Gladstone, NJ 07934
JAMES C. PITNEY Director
(73)
Retired Partner, Pitney, Hardin, Kipp & Szuch, law firm;
Director or Trustee, the Seligman Group of investment
companies. Formerly, Director, Public Service Enterprise
Group, public utility.
Park Avenue at Morris County, P.O. Box 1945, Morristown, NJ
07962-1945
6
<PAGE>
JAMES Q. RIORDAN Director
(72)
Director, various organizations; Director or Trustee, the
Seligman Group of investment companies; Director, The
Houston Exploration Company, oil exploration; The Brooklyn
Museum; KeySpan Energy Corporation; The Committee for
Economic Development; and Public Broadcasting Service (PBS).
Formerly, Co-Chairman of the Policy Council of the Tax
Foundation; Co-Chairman, Mobil Corporation; Director, Tesoro
Petroleum Companies and Dow Jones & Company Inc.; and
Director and President, Bekaert Corporation.
2893 S.E. Ocean Boulevard, Stuart, Florida 34996
ROBERT L. SHAFER Director
(67)
Retired Vice President, Pfizer Inc., pharmaceuticals;
Director or Trustee, the Seligman Group of investment
companies. Formerly, Director, USLIFE Corporation, life
insurance.
96 Evergreen Avenue, Rye, New York 10580
JAMES N. WHITSON Director
(65)
Retired Executive Vice President and Chief Operating
Officer, Sammons Enterprises, Inc., a diversified holding
company; Director or Trustee, the Seligman Group of
investment companies; Consultant to and Director of Sammons
Enterprises, Inc.; and Director, C-SPAN, cable television,
and CommScope, Inc., manufacturer of coaxial cables.
Formerly, Executive Vice President, Chief Operating Officer,
Sammons Enterprises, Inc.
6606 Forestshire Drive, Dallas, TX 75230
CHARLES C. SMITH, JR. Vice President and Portfolio Manager
(43)
Managing Director, J. & W. Seligman & Co. Incorporated; Vice
President and Portfolio Manager, Seligman Portfolios, Inc.,
Seligman Common Stock Fund, Inc. and Seligman Income Fund,
Inc.
CHARLES W. KADLEC Vice President
(54)
Managing Director, J. & W. Seligman & Co. Incorporated;
Chief Investment Strategist, Seligman Advisors, Inc.
LAWRENCE P. VOGEL Vice President
(43)
Senior Vice President, Finance, J. & W. Seligman & Co.
Incorporated, Seligman Advisors, Inc., and Seligman Data
Corp.; Vice President, the Seligman Group of investment
companies and Seligman Services, Inc.; and Vice President
and Treasurer, Seligman International, Inc. Formerly,
Treasurer, Seligman Henderson Co.
7
<PAGE>
FRANK J. NASTA Secretary
(35)
General Counsel, Senior Vice President, Law and Regulation,
and Corporate Secretary, J. & W. Seligman & Co.
Incorporated; Secretary, the Seligman Group of investment
companies; and Corporate Secretary, Seligman Advisors, Inc.,
Seligman Services, Inc., Seligman International, Inc. and
Seligman Data Corp. Formerly, Corporate Secretary, Seligman
Henderson Co.
THOMAS G. ROSE Treasurer
(42)
Treasurer, the Seligman Group of investment companies; and
Seligman Data Corp.
Compensation Table
<TABLE>
<CAPTION>
Pension or
Aggregate Retirement Benefits Total Compensation
Compensation Accrued as part of from Corporation and
Name and Position with Corporation from Corporation (1) Corporation Expenses Fund Complex (1)(2)
- ---------------------------------- -------------------- -------------------- -------------------
<S> <C> <C> <C>
William C. Morris, Director and Chairman N/A N/A N/A
Brian T. Zino, Director and President N/A N/A N/A
Richard R. Schmaltz, Director N/A N/A N/A
John R. Galvin, Director $23,620 N/A $82,000
Alice S. Ilchman, Director 22,790 N/A 80,000
Frank A. McPherson, Director 22,790 N/A 78,000
John E. Merow, Director 23,620 N/A 80,000
Betsy S. Michel, Director 23,620 N/A 82,000
James C. Pitney, Director 21,990 N/A 74,000
James Q. Riordan, Director 22,790 N/A 80,000
Robert L. Shafer, Director 22,790 N/A 80,000
James N. Whitson, Director 22,820(3) N/A 80,000(3)
</TABLE>
______________________
(1) Based on remuneration received by the Directors of the Corporation for the
year ended December 31, 1999. Effective January 21, 2000, the per meeting
fee for Directors was increased by $1,000, which is allocated among all
Funds in the Fund Complex.
(2) As defined in the Corporation's prospectus, the Seligman Group of
Investment Companies consists of twenty investment companies.
(3) Deferred.
The Corporation has a compensation arrangement under which outside directors may
elect to defer receiving their fees. Under this arrangement, interest is
accrued on the deferred balances. The annual cost of such fees and interest is
included in the director's fees and expenses and the accumulated balance thereof
is included in "Liabilities" in the Corporation's financial statements. As of
December 31, 1999, the total amount of deferred compensation (including
interest) payable in respect of the Corporation to Mr. Whitson was $167,223.
Messrs. Merow and Pitney no longer defer current compensation; however, they
have accrued deferred compensation in the amounts of $152,032 and $174,655,
respectively, as of December 31, 1999.
The Corporation has applied for and received exemptive relief that would permit
a director who has elected deferral of his or her fees to choose a rate of
return equal to either (i) the interest rate on short-term Treasury Bills, or
(ii) the rate of return on the shares of certain of the investment companies
advised by the Manager, as designated by the director. The Corporation may, but
is not obligated to, purchase shares of such investment companies to hedge its
obligations in connection with this deferral arrangement.
Directors and officers of the Corporation are also directors, trustees and
officers of some or all of the other investment companies in the Seligman Group.
8
<PAGE>
The Executive Committee of the Board of Directors has the power to (a) determine
the value of securities and assets owned by the Corporation, (b) elect or
appoint officers of the Corporation to serve until the next meeting of the
Directors succeeding such action and (c) determine the price at which shares of
Common Stock of the Corporation shall be issued and sold. All action taken by
the Executive Committee is recorded and reported to the Board of Directors at
their meeting succeeding such action. The members of the Executive Committee
consist of Mr. William C. Morris, Chairman, Richard R. Schmaltz, and Brian T.
Zino, President.
Holdings of Preferred Stock, Common Stock and Warrants
As of March 31, 2000, holders of record of Preferred Stock totaled 514; holders
of record of Common Stock totaled 41,693; and holders of record of Warrants
totaled 127. Insofar as is known by the Corporation, no person owns or controls
or holds, directly or indirectly, 5% or more of the outstanding equity
securities, except for Cede & Co., a nominee for The Depository Trust Company,
PO Box 20, Bowling Green Station, New York, NY 10274-0020, owns of record 46.98%
of the Corporation's Common Stock outstanding and 77.20% of the Corporation's
Preferred Stock outstanding.
As of March 31, 2000, all directors and officers of the Corporation, as a group,
owned less than 1% of the Corporation's Common Stock. As of the same date, no
directors or officers owned any of the Corporation's Preferred Stock or
Warrants. Mr. William C. Morris is Chairman and Chief Executive Officer 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.
These securities of the Corporation shown as being owned beneficially by the
directors and officers include shares held by or for the benefit of members of
their families or held by a trust of which a director is a trustee but in which
they disclaim beneficial ownership.
MANAGEMENT
The Manager
The Corporation pays the Manager for its services a management fee, calculated
daily and payable monthly, equal to a percentage of the daily net assets of the
Corporation. The method for determining this percentage, referred to as the
management fee rate, is set forth in the Prospectus. The management fee
amounted to $16,408,753 in 1999, $14,754,214 in 1998 and $13,151,570 in 1997,
which was equivalent to an annual rate of .40% of the average daily net assets
of the Corporation.
Prior to March 31, 1998, the Manager was party to a Subadvisory Agreement with
Seligman Henderson Co. pursuant to which Seligman Henderson Co. agreed to
provide investment advisory services to the Corporation in respect of foreign
assets to the extent requested by the Manager. On March 30, 1998, the
Subadvisory Agreement was terminated in accordance with its terms. The Manager
has no present plans to enter into similar arrangements in respect of the
Corporation. The Manager paid fees to Seligman Henderson Co., pursuant to the
Subadvisory Agreement, of $1,361,562 for the year ended December 31, 1997. For
the period January 1, 1998 to March 30, 1998, the Manager paid fees of $279,293
to Seligman Henderson Co.
As part of its services to the Corporation, the Manager provides the Corporation
with such office space, administrative and other services and executive and
other personnel as are necessary for the operations of the Corporation. The
Manager also provides senior management for Seligman Data Corp., a wholly-owned
subsidiary of the Corporation and each of the other investment companies in the
Seligman Group. The Manager pays all of the compensation of the Directors of
the Corporation who are employees or consultants of the Manager and its
affiliates, of the officers and employees of the Corporation and of certain
executive officers of Seligman Data Corp.
The Manager is a successor firm to an investment banking business founded in
1864 which has provided investment services to individuals, families,
institutions and corporations. Mr. William C. Morris owns a majority of the
outstanding voting securities of the Manager. See the Appendix for a history of
the Manager.
9
<PAGE>
Code of Ethics
The Manager, Seligman Advisors, Inc. (Seligman Advisors), their subsidiaries and
affiliates, and the Seligman Group of Investment Companies have adopted a Code
of Ethics that sets forth the circumstances under which officers, directors and
employees (collectively, Employees) are permitted to engage in personal
securities transactions. The Code of Ethics proscribes certain practices with
regard to personal securities transactions and personal dealings, provides a
framework for the reporting and monitoring of personal securities transactions
by the Manager's Director of Compliance, and sets forth a procedure of
identifying, for disciplinary action, those individuals who violate the Code of
Ethics. The Code of Ethics prohibits Employees (including all investment team
members) from purchasing or selling any security or an equivalent security that
is being purchased or sold by any client, or where the Employee intends, or
knows of another's intention, to purchase or sell a security on behalf of a
client. The Code also prohibits all Employees from acquiring securities in a
private placement or in an initial or secondary public offering unless an
exemption has been obtained from the Manager's Director of Compliance.
The Code of Ethics prohibits (1) each portfolio manager or member of an
investment team from purchasing or selling any security within seven calendar
days of the purchase or sale of the security by a client's account (including
investment company accounts) that the portfolio manager or investment team
manages; (2) each Employee from engaging in short-term trading (a purchase and
sale or vice-versa within 60 days); and (3) each member of an investment team
from engaging in short sales of a security if, at that time, any client managed
by that team has a long position in that security. Any profit realized pursuant
to any of these prohibitions must be disgorged.
Employees are required, except under very limited circumstances, to engage in
personal securities transactions through 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 Employees are also required to disclose all
securities beneficially owned by them upon commencement of employment and at the
end of each calendar year.
A copy of the Code of Ethics is on public file with, and is available upon
request from, the Securities and Exchange Commission (SEC). You can access it
through the SEC's Internet site, http://www.sec.gov.
EXPERTS
Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281 acts
as independent auditors for the Corporation and in such capacity audits the
Corporation's annual and semi-annual financial statements and financial
highlights.
The financial information of the Corporation included in the Prospectus under
the caption "Financial Highlights" and the financial statements incorporated by
reference in this Statement of Additional Information have been so included or
incorporated by reference in reliance on the reports of Deloitte & Touche LLP
given upon their authority as experts in auditing and accounting.
CUSTODIAN, STOCKHOLDER SERVICE AGENT AND DIVIDEND PAYING AGENT
Seligman Data Corp., a wholly-owned subsidiary of the Corporation, acts as the
stockholder service agent and dividend paying agent and performs, at cost,
certain recordkeeping functions for the Corporation, maintains the records of
shareholder accounts and furnishes dividend paying, redemption and related
services.
Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City, Missouri
64105, serves as custodian for the Corporation. It also maintains, under the
general supervision of the Manager, the accounting records and determines the
net asset value for the Corporation.
10
<PAGE>
BROKERAGE COMMISSIONS
The Management Agreement recognizes that in the purchase and sale of portfolio
securities of the Corporation, the Manager will seek the most favorable price
and execution, and, consistent with that policy, may give consideration to the
research, statistical and other services furnished by brokers or dealers to the
Manager for its use, as well as to the general attitude toward and support of
investment companies demonstrated by such brokers or dealers. Such services
include supplemental investment research, analysis and reports concerning
issuers, industries and securities deemed by the Manager to be beneficial to the
Corporation. In addition, the Manager is authorized to place orders with
brokers who provide supplemental investment and market research and security and
economic analysis although the use of such brokers may result in a higher
brokerage charge to the Corporation than the use of brokers selected solely on
the basis of seeking the most favorable price and execution and although such
research and analysis may be useful to the Manager in connection with its
services to clients other than the Corporation.
In over-the-counter markets, the Corporation deals with primary market makers
unless a more favorable execution or price is believed to be obtainable. The
Corporation may buy securities from or sell securities to dealers acting as
principal, except dealers with which its directors and/or officers are
affiliated.
When two or more of the investment companies in the Seligman Group or other
investment advisory clients of the Manager desire to buy or sell the same
security at the same time, the securities purchased or sold are allocated by the
Manager in a manner believed to be equitable to each. There may be possible
advantages or disadvantages of such transactions with respect to price or the
size of positions readily obtainable or saleable.
Information as to the Corporation's portfolio turnover rate for recent years is
stated under "Financial Highlights" in the Prospectus. Total brokerage
commissions (not including any spreads on principal transactions on a net basis)
paid by the Corporation during the years ended December 31, 1999, 1998 and 1997,
were $2,722,029, $5,013,846 and $6,815,388, respectively.
INCORPORATION OF FINANCIAL STATEMENTS BY REFERENCE
The Corporation's financial statements for the year ended December 31, 1999 are
incorporated into this SAI by reference to the 1999 Annual Report to
Stockholders of the Corporation, filed with the Commission pursuant to Section
30(b) of the 1940 Act and the rules and regulations thereunder. The 1999 Annual
Report contains schedules of the Corporation's portfolio investments as of
December 31, 1999 and certain other financial information. A copy of the 1999
Annual Report will be sent to you without charge if you request a copy of this
SAI.
11
<PAGE>
INDEPENDENT AUDITORS' REPORT ON FINANCIAL HIGHLIGHTS -- SENIOR SECURITIES --
$2.50 CUMULATIVE PREFERRED STOCK
To the Board of Directors and Security Holders of
Tri-Continental Corporation:
We have previously audited, in accordance with generally accepted auditing
standards, the statements of assets and liabilities, including the portfolios of
investments, and the statements of capital stock and surplus of Tri-Continental
Corporation as of December 31 for each of the ten years in the period ended
December 31, 1999 and the related statements of operations and of changes in net
investment assets, and the financial highlights for each of the years then ended
(none of which are presented herein); and we expressed unqualified opinions on
those financial statements.
In our opinion, the information appearing on page 8 of the Prospectus, under the
caption "Senior Securities-$2.50 Cumulative Preferred Stock", for each of the
ten years in the period ended December 31, 1999 is fairly stated, in all
material respects, in relation to the financial statements from which it has
been derived.
DELOITTE & TOUCHE LLP
New York, New York
April 24, 2000
12
<PAGE>
APPENDIX
HISTORY OF J. & W. SELIGMAN & CO. INCORPORATED
Seligman's beginnings date back to 1837, when Joseph Seligman, the oldest of
eight brothers, arrived in the United States from Germany. He earned his living
as a pack peddler in Pennsylvania, and began sending for his brothers. The
Seligmans became successful merchants, establishing businesses in the South and
East.
Backed by nearly thirty years of business success - culminating in the sale of
government securities to help finance the Civil War - Joseph Seligman, with his
brothers, established the international banking and investment firm of J. & W.
Seligman & Co. In the years that followed, the Seligman Complex played a major
role in the geographical expansion and industrial development of the United
States.
The Seligman Complex:
....Prior to 1900
o Helps finance America's fledgling railroads through underwriting.
o Is admitted to the New York Stock Exchange in 1869. Seligman remained a
member of the NYSE until 1993, when the evolution of its business made it
unnecessary.
o Becomes a prominent underwriter of corporate securities, including New York
Mutual Gas Light Company, later part of Consolidated Edison.
o Provides financial assistance to Mary Todd Lincoln and urges the Senate to
award her a pension.
o Is appointed U.S. Navy fiscal agent by President Grant.
o Becomes a leader in raising capital for America's industrial and urban
development.
...1900-1910
o Helps Congress finance the building of the Panama Canal.
...1910s
o Participates in raising billions for Great Britain, France and Italy,
helping to finance World War I.
...1920s
o Participates in hundreds of 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 $3 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.
13
<PAGE>
...1940s
o Helps shape the Investment Company Act of 1940.
o Leads in the purchase and subsequent sale to the public of Newport News
Shipbuilding and Dry Dock Company, a prototype transaction for the
investment banking industry.
o Assumes management of National Investors Corporation, today Seligman Growth
Fund, Inc.
o Establishes Whitehall Fund, Inc., today Seligman Income Fund, Inc.
...1950-1989
o Develops new open-end investment companies. Today, manages more than 40
mutual fund portfolios.
o Helps pioneer state-specific, municipal bond funds, today managing a
national and 18 state-specific municipal funds.
o Establishes 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 Introduces to the public Seligman Frontier Fund, Inc., a small
capitalization mutual fund.
o Launches Seligman Global Fund Series, Inc., which today offers five
separate series: Seligman International Growth Fund, Seligman Global
Smaller Companies Fund, Seligman Global Technology Fund, Seligman Global
Growth Fund, and Seligman Emerging Markets Fund.
o Launches Seligman Value Fund Series, Inc., which currently offers two
separate series: Seligman Large-Cap Value Fund and Seligman Small-Cap Value
Fund.
o Launches innovative Seligman New Technologies Fund, Inc., a closed-end
"interval" fund seeking long-term capital appreciation by investing in
technology companies, including venture capital investing.
...2000
o Introduces Seligman Time Horizon/Harvester Series, Inc., an asset
allocation type mutual fund containing four funds: Seligman Time Horizon 30
Fund, Seligman Time Horizon 20 Fund, Seligman Time Horizon 10 Fund and
Seligman Harvester Fund.
14
<PAGE>
ATTACH THE TRI-CONTINENTAL HISTORY BROCHURE AT BACK OF SAI
15
<PAGE>
Securities Act File No. 33-
Investment Company Act File No. 811-266
PART C. OTHER INFORMATION
- -------------------------
Item 24. Financial Statements and Exhibits.
- ------- ----------------------------------
1. Financial Statements.
Part A. Financial Highlights for the ten years ended December 31,
1999; Table for the ten years ended December 31, 1999 under the caption "Senior
Securities - $2.50 Cumulative Preferred Stock."
Part B. The required financial statements are included in the
Corporation's 1999 Annual Report, which is incorporated by reference into the
Statement of Additional Information. These statements include: Portfolio of
Investments at December 31, 1999; Statement of Assets and Liabilities at
December 31, 1999; Statement of Capital Stock and Surplus at December 31, 1999;
Statement of Operations for the year ended December 31, 1999; Statements of
Changes in Net Investment Assets for the years ended December 31, 1999 and 1998;
Notes to Financial Statements; Financial Highlights for the five years ended
December 31, 1999; Report of Independent Auditors.
2. Exhibits. All Exhibits have been previously filed and
are incorporated herein, except those marked with an asterisk (*), which are
filed herewith.
(a) Amended and Restated Charter of Registrant.
(Incorporated by reference to Registrant's Amendment No.
29 to the Registration Statement on Form N-2 filed on
April 16, 1998).
(b) Amended and Restated By-Laws of the Registrant.
(Incorporated by reference to Registrant's Amendment No.
28 to the Registration Statement on Form N-2 filed on
September 29, 1998).
(d)(1) Specimen certificates of Common Stock. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 1
filed on March 6, 1981.)
(d)(2) Specimen certificates of $2.50 Cumulative Preferred
Stock. (Incorporated by reference to Registrant's
Post-Effective Amendment No. 1 filed on March 6, 1981.)
(d)(3) Specimen of Warrant of the Registrant. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 1
filed on March 6, 1981.)
(d)(4) Form of Subscription Certificate - Subscription Right
for shares of Common Stock. (Incorporated by reference
to Registrant's Registration Statement on Form N-2 filed
on September 17, 1992.)
(d)(5) The Registrant's Charter is the constituent instrument
defining the rights of the $2.50 Cumulative Preferred
Stock, par value $50, and the Common Stock of the
Registrant. (Incorporated by reference to Registrant's
Amendment No. 29 to the Registration Statement on Form
N-2 filed on April 19, 1999.)
(e) Registrant's Automatic Dividend Investment and Cash
Purchase Plan is set forth in Registrant's Prospectus
which is filed as Part A of this Registration Statement.
(g)(1) Amended Management Agreement between Registrant and J. &
W. Seligman & Co. Incorporated. (Incorporated by
reference to Registrant's Registration Statement on Form
N-2 filed April 13, 1995.)
C-1
<PAGE>
Securities Act File No. 33-
Investment Company Act File No. 811-266
PART C. OTHER INFORMATION
- -------------------------
(i)(1) Matched Accumulation Plan of J. & W. Seligman & Co.
Incorporated. (Incorporated by reference to of
Post-Effective Amendment No. 21 to the Registration
Statement of Seligman Frontier Fund, Inc. (File No.
811-4078) filed on January 28, 1997.)
(i)(2) Deferred Compensation Plan for Directors of
Tri-Continental Corporation. (Incorporated by reference
to Registrant's Form N-2 filed on April 16, 1998.)
(j) Form of Custodian Agreement between Registrant and
Investors Fiduciary Trust Company. (Incorporated by
reference to Registrant's Registration Statement on Form
N-2 filed on April 23, 1997.)
(l) Opinion and Consent of Counsel. (Incorporated by
reference to Registrant's Amendment No. 29 to the
Registration Statement on Form N-2 filed on April 19,
1999.)
(n) *Consent of Independent Auditors.
(q)(1) The Seligman Roth/Traditional IRA Information Kit.
(Incorporated by reference to Registrant's Registration
Statement on Form N-2 filed on April 16, 1998.)
(q)(2) The Seligman Simple IRA Plan documents for employers.
(Incorporated by reference to Pre-Effective Amendment
No. 2 to the Registration Statement of Seligman Value
Fund Series, Inc. (File No. 811-08031) filed on April
17, 1997.)
(q)(3) The Seligman Simple IRA Plan Agreement and Disclosure
Statement for participants. (Incorporated by reference
to Pre-Effective Amendment No. 2 to the Registration
Statement of Seligman Value Fund Series, Inc. (File No.
811-08031) filed on April 17, 1997.)
(q)(4) Qualified Plan and Trust Basic Plan Document.
(Incorporated by reference to Registrant's Registration
Statement on Form N-2 filed on April 16, 1998.)
(q)(5) Flexible Standardized 401(k) Profit Sharing Plan
Adoption Agreement. (Incorporated by reference to
Registrant's Registration Statement on Form N-2 filed on
April 16, 1998.)
(q)(6) Flexible Nonstandardized Safe Harbor 401(k) Profit
Sharing Plan Adoption Agreement. (Incorporated by
reference to Registrant's Registration Statemetn on Form
N-2 filed on April 16, 1998.)
(r) *Code of Ethics.
(Other Exhibits) Power of Attorney for Richard R. Schmaltz.
(Incorporated by reference to Registrant's Registration
Statement on Form N-2 filed on April 16, 1998.)
Item 25. Marketing Arrangements. Not Applicable.
- -------- ----------------------- ---------------
C-2
<PAGE>
Securities Act File No. 33-
Investment Company Act File No. 811-266
PART C. OTHER INFORMATION
- ------- -----------------
Item 26. Other Expenses of Issuance and Distribution.
- -------- --------------------------------------------
Registration fees $-0-
NYSE listing fees -0-
Registrar fees -0-
Legal fees -0-
Accounting fees -0-
Miscellaneous (mailing, etc.) -0-
Item 27. Persons Controlled by or Under Common Control with Registrant.
- -------- --------------------------------------------------------------
Seligman Data Corp., a New York Corporation, is owned by the
Registrant and certain associated investment companies. The
Registrant's investment in Seligman Data Corp. is recorded at a
cost of $43,681.
Item 28. Number of Holders of Securities.
- -------- --------------------------------
As of March 31, 2000:
Title of Class Number of Recordholders
-------------- -----------------------
$2.50 Cumulative Preferred 514
Common Stock 41,693
Warrants 127
Item 29. Indemnification. Reference is made to the provisions of Article
- -------- ---------------------------------------------------------------
Eleventh of Registrant's Amended and Restated Charter filed as an
exhibit to this Registration Statement and Article II, Section 14
of Registrant's Restated By-Laws filed as an exhibit to the
Registration Statement filed on April 23, 1997.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions, or otherwise, the Registrant has been advised
by the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant
of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such
issue.
Item 30. Business and Other Connections of Investment Adviser: J. & W.
- -------- ----------------------------------------------------
Seligman & Co. Incorporated, a Delaware corporation (the
"Manager"), is the Registrant's investment manager. The Manager
also serves as investment manager to nineteen 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 Global
Fund Series, Inc., Seligman High Income Fund Series, Seligman
Income Fund, Inc., Seligman Municipal Fund Series, Inc., Seligman
Municipal Series Trust, Seligman New Jersey Municipal Fund, Inc.,
Seligman Pennsylvania Municipal Fund Series, Seligman New
Technologies Fund, Inc., Seligman Portfolios, Inc., Seligman
Quality Municipal Fund, Inc., Seligman Select Municipal Fund, Inc.,
Seligman Time Horizon/Harvester Series, Inc. and Seligman Value
Fund Series, Inc.
C-3
<PAGE>
Securities Act File No. 33-
Investment Company Act File No. 811-266
PART C. OTHER INFORMATION
- -------------------------
The Manager has an advisory service division which provides
investment management or advice to private clients. The list
required by this Item 30 of officers and directors of the Manager,
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, pursuant to the Investment Advisers Act of 1940, as
amended (SEC File No. 801-15798), which was filed on March 30,
2000.
Item 31. Location of Accounts and Records. The accounts, books and
- ------- -----------------------------------
other documents required to be maintained by Section 31(a) of the
Investment Company Act of 1940, as amended, and the Rules 17 CFR
270.31(a)-1 to 31(a)-3 promulgated thereunder, are maintained by J.
& W. Seligman & Co. Incorporated located at 100 Park Avenue, New
York, New York 10017 and at the following locations: (1) Custodian:
Investors Fiduciary Trust Company, 801 Pennsylvania, Kansas City,
Missouri 64105 and (2) Transfer Agent, Redemption and Other
Shareholder Account Services for the Funds: Seligman Data Corp.,
100 Park Avenue, New York, New York 10017
Item 32. Management Services. Not Applicable.
- -------- --------------------
Item 33. Undertakings.
- -------- ------------
I. The Registrant undertakes to suspend the offering of shares
until the prospectus is amended if (1) subsequent to the effective
date of its registration statement, the net asset value declines
more than ten percent from its net asset value as of the effective
date of the registration statement.
II. The Registrant undertakes to:
(a) File, during any period in which offers or sales are being
made, a post-effective amendment to the Rregistration
Statement: (1) to include any prospectus required by Section
10(a)(3) of the 1933 Act; (2) to reflect in the prospectus
any facts or events after the effective date of the
registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth
in the registration statement; and (3) to include any
material information with respect to the plan of distribution
not previously disclosed in the registration statement or any
material change to such information in the registration
statement;
C-4
<PAGE>
Securities Act File No. 33-
Investment Company Act File No. 811-266
(b) That, for the purpose of determining any liability under the
1933 Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered therein, and the offering of those securities at that
time shall be deemed to be the initial bona fide offering
thereof.
III. The Registrant undertakes to send by first class mail or
other means designed to ensure equally prompt delivery within two
business days of receipt of a written or oral request, the
Registrant's Statement of Additional Information.
C-5
<PAGE>
Securities Act File No. 33-
Investment Company Act File No. 811-266
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933 and/or the Investment
Company Act of 1940, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of New York, State of New York, on the 28th day of April, 2000.
TRI-CONTINENTAL CORPORATION
---------------------------
(Registrant)
By: /s/ William C. Morris
-------------------------
William C. Morris,
Chairman of the Board
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on April 28, 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ William C. Morris Chairman of the Board
- ----------------------------------------------------
William C. Morris (Principal executive officer) and Director
/s/ Brian T. Zino Director and President
- ------------------
Brian T. Zino
/s/ Thomas G. Rose Treasurer
- ----------------------------------------------------
Thomas G. Rose
John R. Galvin, Director )
Alice S. Ilchman, Director )
Frank A. McPherson, Director )
John E. Merow, Director )
Betsy S. Michel, Director ) /s/ Brian T. Zino
------------------
James C. Pitney, Director ) Brian T. Zino, Attorney-in-fact
James Q. Riordan, Director )
Richard R. Schmaltz, Director )
Robert L. Shafer, Director )
James N. Whitson, Director )
</TABLE>
<PAGE>
Securities Act File No. 33-
Investment Company Act File No. 811-266
TRI-CONTINENTAL CORPORATION
FORM N-2
EXHIBIT INDEX
-------------
Item No. Description
- ------- -----------
Item 24(2)(n) Consent of Independent Auditors
Item 24(2)(r) Code of Ethics
<PAGE>
EXHIBIT 99.2N
CONSENT OF INDEPENDENT AUDITORS
Tri-Continental Corporation:
We consent to the use in Amendment No. 30 to Investment Company Act File
No. 811-266 of our report dated February 11, 2000, appearing in the Annual
Report to Security Holders for the year ended December 31, 1999, incorporated by
reference in the Statement of Additional Information, and to the references to
us under the captions "Financial Highlights" in the Prospectus and "Experts" in
the Statement of Additional Information which are also part of such Registration
Statement.
DELOITTE & TOUCHE LLP
New York, New York
April 24, 2000
<PAGE>
EXHIBIT 99.2R
CODE OF ETHICS
--------------
J. & W. Seligman & Co. Incorporated
Seligman Advisors, Inc.
Seligman Services, Inc.
Seligman Data Corp.
Seligman International, Inc.
Seligman International UK Limited
The Seligman Group of Investment Companies
I. Introduction
A primary duty of all directors, officers and employees (collectively
"Employees") of J. & W. Seligman & Co. Incorporated, its subsidiaries and
affiliates (collectively, "Seligman") is to be faithful to the interest of the
various Seligman advisory clients, including the registered and unregistered
companies advised by Seligman (collectively, "Clients"). Directors of the
Seligman Registered Investment Companies also have a duty to the Seligman
Registered Investment Companies and their shareholders. Persons who are
Disinterested Directors are "Employees" for purposes of this Code of Ethics.
Through the years, Seligman and its predecessor organizations have had a
reputation of maintaining the highest business and ethical standards and have
been favored with the confidence of investors and the financial community. Such
a reputation and confidence are not easily gained and are among the most
precious assets of Seligman. In large measure, they depend on the devotion and
integrity with which each Employee discharges his or her responsibilities.
Their preservation and development must be a main concern of each Employee, and
each Employee has a primary obligation to avoid any action or activity that
could produce conflict between the interest of the Clients and that Employee's
self-interest.
The purpose of this Code of Ethics ("Code") is to set forth the policies of
Seligman in the matter of conflicts of interest and to provide a formal record
for each Employee's reference and guidance. This Code is also designed to
prevent any act, practice or course of business prohibited by the rules and
regulations governing our industry.
Each Employee owes a fiduciary duty to each Client. Therefore, all Employees
must avoid activities, interests and relationships that might appear to
interfere with making decisions in the best interest of the Clients.
As an Employee, you must at all times:
1. Avoid serving your own personal interests ahead of the interests of Clients.
You may not cause a Client to take action, or not to take action, for your
personal benefit rather than the Client's benefit.
2. Avoid taking inappropriate advantage of your position. The receipt of
investment opportunities, perquisites or gifts from persons seeking business
with Clients or with Seligman could call into question the exercise of your
better judgment. Therefore, you must not give or receive benefits that would
compromise your ability to act in the best interest of the Clients.
3. Conduct all personal Securities Transactions in full compliance with the
Code, including the pre-authorization and reporting requirements, and comply
fully with the Seligman Insider Trading Policies and Procedures (See Appendix
A).
While Seligman encourages you and your families to develop personal investment
programs, you must not take any action that could cause even the appearance that
an unfair or improper action has been taken. Accordingly, you must follow the
policies set forth below with respect to trading in your Account(s). This Code
places reliance on the good sense and judgment of you as an Employee; however,
if you are unclear as to the Code's meaning, you should seek the advice of the
Law and Regulation Department and assume the Code will be interpreted in the
most restrictive manner. Questionable situations should be resolved in favor of
Clients.
<PAGE>
Technical compliance with the Code's procedures will not insulate from scrutiny
any trades that indicate a violation of your fiduciary duties.
Application of the Code to Disinterested Directors
- --------------------------------------------------
Disinterested Directors are only subject to the reporting requirements in
Section III.5(b) of the Code. Disinterested Directors are not subject to other
provisions of the Code but are subject to the requirements of the federal
securities laws and other applicable laws, such as the prohibition on trading in
securities of an issuer while in possession of material non-public information.
II. Definitions
(a) "Accounts" means all Employee Accounts and Employee Related Accounts.
(b) "Beneficial Interest" is broadly interpreted. The SEC has said that
the final determination of Beneficial Interest is a question to be
determined in the light of the facts of each particular case. The
terms Employee Account and Employee Related Account, as defined below,
generally define Beneficial Interest. However, the meaning of
"Beneficial Interest" may be broader than that described below. If
there are any questions as to Beneficial Interest, please contact the
Director of Compliance, General Counsel or Associate General Counsel.
(i) "Employee Account" means the following securities Accounts: (i)
any of your personal account(s); (ii) any joint or tenant-in-
common account in which you have an interest or are a participant;
(iii) any account for which you act as trustee, executor, or
custodian; (iv) any account over which you have investment
discretion or otherwise can exercise control, including the
accounts of entities controlled directly or indirectly by you; (v)
any account in which you have a direct or indirect interest
through a contract, arrangement or otherwise (e.g., economic,
voting power, power to buy or sell, or otherwise); (vi) any
account held by pledges, or for a partnership in which you are a
member, or by a corporation which you should regard as a personal
holding company; (vii) any account held in the name of another
person in which you do not have benefits of ownership, but which
you can vest or revest title in yourself at once or some future
time; (viii) any account of which you have benefit of ownership;
and (ix) accounts registered by custodians, brokers, executors or
other fiduciaries for your benefit.
(ii) "Employee Related Account" means any Account of (i) your spouse
and minor children and (ii) any account of relatives or any other
persons to whose support you materially contribute, directly or
indirectly.
(c) "Disinterested Director" means a director or trustee of a Seligman
Registered Investment Company who is not an "interested person" of
such investment company within the meaning of Section 2(a)(19) of the
Investment Company Act of 1940.
(d) "Equivalent Security" includes, among other things, an option to
purchase or sell a Security or an instrument convertible or
exchangeable into a Security.
(e) "Investment Team" means one or more Investment Teams formed by the
Manager in various investment disciplines to review and approve
Securities for purchase and sale by Client Accounts. This includes a
team's leader, portfolio managers, research analysts, traders and
their direct supervisors.
(f) "Security" includes, among other things, stocks, notes, bonds,
debentures, and other evidences of indebtedness (including loan
participation and assignments), limited partnership interests,
investment contracts, and all derivative instruments (e.g., options
and warrants).
<PAGE>
(g) "Securities Transaction" means a purchase or sale of a Security.
(h) "Seligman Registered Investment Company" means an investment company
registered under the Investment Company Act of 1940 for which Seligman
serves as investment manager or adviser.
III. Personal Securities Transactions
1. Prohibited Transactions
-----------------------
These apply to all of your Accounts.
(a) Seven-Day Blackout: If you are a member of an Investment Team,
Securities Transactions are prohibited within seven calendar days
either before or after the purchase or sale of the relevant security
(or an Equivalent Security) by a Client whose Account is managed by
your Investment Team.
(b) Intention to Buy or Sell for Clients: Securities Transactions are
prohibited at a time when you intend, or know of another's
intention, to purchase or sell that Security (or an Equivalent
Security) on behalf of a Client.
(c) Sixty-Day Holding Period: Profits on Securities Transactions made
within a sixty-day period are prohibited and must be disgorged. This
is a prohibition of short term trading. Specifically,
o Purchase of a Security within 60 days of your sale of the
Security (or an Equivalent Security), at a price that is less
than the price in the previous sale is prohibited.
o Sale of a Security within the 60 day period of your purchase
of the Security (or an Equivalent Security), at a price that
is greater than the price in the previous purchase is
prohibited. Examples are as follows:
1. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee sells 100 shares of XYZ ($15 a share) on February 15.
Employee must disgorge $500.
2. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee purchases 50 shares of XYZ ($12 a share) on January 30.
Employee sells 50 shares of XYZ ($15 a share) on March 15.
Employee must disgorge $150.
(The March 15 sale may not be matched to the January 1 purchase).
3. Employee purchases 100 shares of XYZ ($10 a share) on January 1.
Employee sells 100 shares of XYZ ($10 a share) on February 1.
Employee purchases 100 shares of XYZ ($9 a share) on March 1
Employee must disgorge $100.
(The February 1 sale is permissible because no profit was made.
However, the March 1 purchase is matched against the February 1
sale resulting in a $100 profit).
(d) Restricted Transactions: Transactions in a Security are prohibited
(i) on the day of a purchase or sale of the Security by a Client, or
(ii) anytime a Client's order in the Security is open on the trading
desk. Other Securities may be restricted from time to time as deemed
appropriate by the Law and Regulation Department.
<PAGE>
(e) Short Sales: If you are a member of an Investment Team, you may not
engage in any short sale of a Security if, at the time of the
transaction, any Client managed by your Team has a long position in
that same Security. However, this prohibition does not prevent you
from engaging short sales against the box and covered call writing,
as long as these personal trades are in accordance with the
sixty-day holding period described above.
(f) Public Offerings: Acquisitions of Securities in initial and
secondary public offerings are prohibited, unless granted an
exemption by the Director of Compliance. An exemption for an initial
public offering will only be granted in certain limited
circumstances, for example, the demutualization of a savings bank.
(g) Private Placements: Acquisition of Securities in a private placement
is prohibited absent prior written approval by the Director of
Compliance.
(h) Market Manipulation: Transactions intended to raise, lower, or
maintain the price of any Security or to create a false appearance
of active trading are prohibited.
(i) Inside Information: You may not trade, either personally or on
behalf of others, on material, non-public information or communicate
material, non- public information to another in violation of the
law. This policy extends to activities within and outside your
duties at Seligman. (See Appendix A).
2. Maintenance of Accounts
-----------------------
All Accounts that have the ability to engage in Securities Transactions
must be maintained at Ernst & Company (Investec) and/or the specific
Merrill Lynch branch office located at 712 Fifth Avenue, New York, NY. You
are required to notify the Director of Compliance of any change to your
account status. This includes opening a new Account, converting,
transferring or closing an existing account or acquiring Beneficial
Interest in an Account through marriage or otherwise. You must place all
orders for Securities Transactions in these Account(s) with the Equity
Trading Desk or the appropriate Fixed Income Team as set forth in Section
III.3 ("Trade Pre-authorization Requirements").
The Director of Compliance may grant exceptions to the foregoing
requirements on a case by case basis. All requests for exceptions must be
applied for in writing and submitted for approval to the Director of
Compliance and will be subject to certain conditions.
3. Trade Pre-authorization Requirements
------------------------------------
All Securities Transactions in an Employee Account or Employee Related
Account must be pre-authorized, except for Securities Transactions set
forth in Section III.4 ("Exempt Transactions").
(a) Trade Authorization Request Form: Prior to entering an order for a
Securities Transaction in an Employee Account or Employee Related
Account, which is subject to pre-authorization, you must complete a
Trade Authorization Request Form (set forth in Appendix B) and
submit the completed Form (faxed or hand delivered) to the Director
of Compliance (or designee).
(b) Review of the Form and Trade Execution: After receiving the
completed Trade Authorization Request Form, the Director of
Compliance (or designee) will review the information and, as soon as
practical, determine whether to authorize the proposed Securities
Transaction. The authorization, date and time of the authorization
must be reflected on the Form. Once approved the order may then be
executed by Equity Trading Desk or the appropriate Fixed Income
Team, except for accounts for which an exemption was granted under
Section III.2.
<PAGE>
(c) Length of Trade Authorization Approval: Any authorization, if
granted, is effective until the earliest of (i) its revocation, (ii)
the close of business on the day from which authorization was
granted or (iii) your discovery that the information in the Trade
Authorization Request Form is no longer accurate. If the Securities
Transaction was not placed or executed within that period, a new
pre-authorization must be obtained. A new pre-authorization need not
be obtained for orders which cannot be filled in one day due to an
illiquid market, so long as such order was placed for execution on
the day the original pre-authorization was given.
No order for a Securities Transaction may be placed prior to the Director
of Compliance (or designee) receiving the completed Trade Pre-
authorization Form and approving the transaction. In some cases, trades
may be rejected for a reason that is confidential.
4. Exempt Transactions
-------------------
The prohibitions of this Code shall not apply to the following Securities
Transactions in your Account(s):
(a) Purchases or sales of Securities which are non-volitional (i.e., not
involving any investment decision or recommendation).
(b) Purchases of Securities through certain corporate actions (such as
stock dividends, dividend reinvestments, stock splits, mergers,
consolidations, spin-offs, or other similar corporate reorganizations
or distributions generally applicable to all holders of the same class
of Securities).
(c) Purchases of Securities effected upon the exercise of rights issued by
an issuer pro rata to all holders of a class of its Securities, to the
--------
extent such rights were acquired from the issuer.
(d) Purchases or sales of open-end registered investment companies, U.S.
Government Securities and money market instruments (e.g., U.S.
Treasury Securities, bankers acceptances, bank certificates of
deposit, commercial paper and repurchase agreements).
(e) Purchases of Securities which are part of an automatic dividend
reinvestment plan or stock accumulation plan; however, quarterly
account statement of such plans must be sent to the Director of
Compliance.
(f) Securities Transactions that are granted a prior exemption by the
Director of Compliance, the General Counsel or the Associate General
Counsel.
5. Reporting
---------
(a) You must arrange for the Director of Compliance to receive from the
executing broker, dealer or bank duplicate copies of each
confirmation and account statement for each Securities Transaction
in an Employee Account or Employee Related Account.
(b) If you are a Disinterested Director you are required to report the
information specified below with respect to any Securities
Transaction in any Securities Account in which you have Beneficial
Interest, if you knew, or in the ordinary course of fulfilling your
official duties as a Disinterested Director, should have known, that
during 15 days immediately before or after the date of your
transaction, the Security (or Equivalent Security) was purchased or
sold by a Seligman Registered Investment Company or considered for
purchase or sale by a Seligman Registered Investment Company. Such
report shall be made not later than 10 days after the end of the
calendar quarter in which the Transaction was effected and shall
contain the following information:
<PAGE>
(i) The date of the transaction, the name of the company, the
number of shares, and the principal amount of each Security
involved;
(ii) The nature of the transaction (i.e., purchase, sale or any
other type of acquisition or disposition);
(iii) The price at which the transaction was effected;
(iv) The name of the broker, dealer or bank with or through whom
the transaction was effected; and
(v) The date the report is submitted.
(c) You are required to disclose all Securities beneficially owned by
you within ten days of commencement of employment and at the end of
each calendar year within 10 days thereafter (See Appendix C).
(d) You are also required to disclose all Employee and Employee Related
Securities Accounts, Private Securities Transactions and Outside
Activities, Affiliations and Investments upon commencement of
employment and annually thereafter (See Appendix D).
(e) Any report may contain a statement that the report shall not be
construed as an admission by you, that you have any direct or
indirect beneficial ownership in the Security to which the report
relates.
(f) The Director of Compliance or his designee will review all reports.
6. Dealings with the Clients
-------------------------
You should not have any direct or indirect investment interest in the
purchase or sale of any Security or property from or to Clients. This is
a prohibition against dealings between you and the Clients and is not
intended to preclude or limit investment transactions by you in Securities
or property, provided such transactions are not in conflict with the
provisions of this Code.
7. Preferential Treatment, Favors and Gifts
----------------------------------------
You are prohibited from giving and receiving gifts of significant value or
cost from any person or entity that does business with or on behalf of any
Client. You should also avoid preferential treatment, favors, gifts and
entertainment which might, or might appear to, influence adversely or
restrict the independent exercise of your best efforts and best judgments
on behalf of the Clients or which might tend in any way to impair
confidence in Seligman by Clients. Cash Gifts that do not exceed $100 in
value per person for a calendar year are permissible. Ordinary courtesies
of business life, or ordinary business entertainment, and gifts of
inconsequential value are also permissible. However, they should not be
so frequent nor so extensive as to raise any question of impropriety.
8. Outside Business Activities and Service as a Director, Trustee or in a
----------------------------------------------------------------------
Fiduciary Capacity of any Organization
--------------------------------------
You may not engage in any outside business activities or serve as a
Director, Trustee or in a fiduciary capacity of any organization, without
the prior written consent of the Director of Compliance.
<PAGE>
9. Remedies of the Code
--------------------
Upon discovering a violation of this Code, sanctions may be imposed
against the person concerned as may be deemed appropriate, including,
among other things, a letter of censure, fines, suspension or termination
of personal trading rights and/or employment.
As part of any sanction, you may be required to absorb any loss from the
trade. Any profits realized, as a result of your personal transaction
that violates the Code must be disgorged to a charitable organization,
which you may designate.
10. Compliance Certification
------------------------
At least once a year, you will be required to certify on the Employee
Certification Form (set forth in Appendix E) that you have read and
understand this Code, that you have complied with the requirements of the
Code, and that you have disclosed or reported all personal Securities
Transactions pursuant to the provisions of the Code.
11. Inquiries Regarding the Code
----------------------------
If you have any questions regarding this Code or any other compliance-
related matter, please call the Director of Compliance, or in his absence,
the General Counsel or Associate General Counsel.
________________________________
William C. Morris
Chairman
December 22, 1966
Revised: March 8, 1968 December 7, 1990
January 14, 1970 November 18, 1991
March 21, 1975 April 1, 1993
May 1, 1981 November 1, 1994
May 1, 1982 February 28, 1995
April 1, 1985 November 19, 1999*
March 27, 1989
* Refers to the incorporation of the Code of Ethics of the Seligman Investment
Companies originally adopted June 12, 1962, as amended.
<PAGE>
Appendix A
Amended November 19, 1999
J. & W. Seligman & Co. Incorporated - Insider Trading Policies and Procedures
SECTION I. BACKGROUND
Introduction
- ------------
United States law creates an affirmative duty on the part of broker-
dealers and investment advisers to establish, maintain and enforce written
policies and procedures that provide a reasonable and proper system of
supervision, surveillance and internal control to prevent the misuse of
material, non-public information by the broker-dealer, investment adviser or any
person associated with them. The purpose of these procedures is to meet those
requirements. The following procedures apply to J. & W. Seligman & Co.
Incorporated, its subsidiaries and affiliates (collectively, "Seligman") and all
officers, directors and employees (collectively, "Employees") thereof.
Statement of Policy
- -------------------
No Employee may trade, either personally or on behalf of others, on
material, non-public information or communicate material, non-public information
to another in violation of the law. This policy extends to activities within and
outside their duties at Seligman. Each Employee must read, acknowledge receipt
and retain a copy of these procedures.
Inside Information
- ------------------
The term "insider trading" is not defined in the federal securities laws,
but generally is used to refer to the use of material, non-public information to
trade in securities or to communicate material, non-public information to
others.
While the law concerning insider trading is not static, it is understood
that the law generally prohibits:
A. trading by an insider, while in possession of material, non-public
information, or
B. trading by a non-insider, while knowingly in possession of material,
non-public information, where the information either was disclosed to
the non-insider in violation of an insider's duty to keep it
confidential or was misappropriated, or
C. communicating material, non-public information to others.
The elements of insider trading and the penalties for such unlawful conduct
are discussed below. If you have any questions after reviewing these procedures,
you should consult the Director of Compliance, General Counsel or Associate
General Counsel.
1. Who Is An Insider?
------------------
The concept of "insider" is broad. It includes Employees of a company. In
addition, a person can be a "temporary insider" if he or she enters into a
special confidential relationship in the conduct of a company's affairs and
as a result is given access to information solely for the company's
purposes. A temporary insider can include, among others, a company's
attorneys, accountants, consultants, bank lending officers, and the
Employees of such organizations. In addition, Seligman may become a
temporary insider of a company it advises or for which it performs other
services. According to the Supreme Court, the company must expect the
outsider to keep the disclosed non-public information
<PAGE>
confidential and the relationship must at least imply such a duty before
the outsider will be considered an insider.
2. What Is Material Information?
-----------------------------
Trading on inside information is not a basis for liability unless the
information is material. "Material information" generally is defined as
information for which there is a substantial likelihood that a reasonable
investor would consider it important in making his or her investment
decisions, or information that is reasonably certain to have a substantial
affect on the price of a company's securities. Information that Employees
should consider material includes, but is not limited to: dividend changes,
earnings estimates, changes in previously released earnings estimates,
significant merger or acquisition proposals or agreements, major litigation,
liquidation problems and extraordinary management developments. In addition,
information about major contracts or new customers could also qualify as
material, depending upon the importance of such developments to the company's
financial condition or anticipated performance.
Material information does not have to relate to a company's business.
For example, in Carpenter v. U.S., 408 U.S. 316 (1987), the Supreme Court
-----------------
considered as material certain information about the contents of a
forthcoming newspaper column that was expected to affect the market price of
a Security. In that case, a Wall Street Journal reporter was found
-------------------
criminally liable for disclosing to others the dates that reports on various
companies would appear in the Journal and whether those reports would be
-------
favorable or not.
3. What Is Non-Public Information?
-------------------------------
Information is non-public until it has been effectively communicated to
the market place. One must be able to point to some fact to show that the
information is generally public. For example, information found in a report
filed with the SEC, or appearing in Dow Jones, Reuters Economic Services, The
--------- ------------------------- ---
Wall Street Journal or other publications of general circulation would be
-------------------
considered public. However, see Section II, Paragraph 2.
4. Penalties for Insider Trading
-----------------------------
Penalties for trading on or communicating material, non-public
information are severe, both for individuals involved in such unlawful
conduct and their employers. A person can be subject to some or all of the
penalties below even if he or she does not personally benefit from the
violation. Penalties include:
- Civil injunctions
- Disgorgement of profits
- Jail sentences
- Fines for the person who committed the violation of up to three times
the profit gained or loss avoided, whether or not the person actually
benefited, and
- Fines for the employer or other controlling person of up to the greater
of $1,000,000 or three times the amount of the profit gained or loss
avoided.
In addition, any violation of policies and procedures set forth herein can be
expected to result in serious sanctions by Seligman, including dismissal of the
persons involved.
<PAGE>
SECTION II. PROCEDURES
Procedures to Implement Policy Against Insider Trading.
The following procedures have been established to assist the Employees of
Seligman in avoiding insider trading, and to aid Seligman in preventing,
detecting and imposing sanctions against insider trading. Every Employee of
Seligman must follow these procedures or risk serious sanctions, including
dismissal, substantial personal liability and criminal penalties. If you have
any questions about these procedures you should consult the Director of
Compliance, the General Counsel or Associate General Counsel.
1. Identifying Inside Information.
Before trading for yourself or others (including investment companies and
private Accounts managed by Seligman), in the securities of a company about
which you may have potential inside information, ask yourself the following
questions:
a. Is the information material? Is this information that an investor would
consider important in making his or her investment decisions? Is this
information that would substantially affect the market price of the
securities if generally disclosed?
b. Is the information non-public? To whom has this information been
provided? Has the information been effectively communicated to the
marketplace in a publication of general circulation or does it fall
within the circumstances set forth in paragraph 2 below.
If, after consideration of the above, you believe that the information is
material and non-public, or if you have questions as to whether the information
is material and non-public, you should take the following steps:
c. Report the matter immediately to the Director of Compliance, General
Counsel or Associate General Counsel.
d. Do not purchase or sell the securities on behalf of yourself or others,
including investment companies or private Accounts managed by Seligman.
e. Do not communicate the information inside or outside Seligman other than
to the Director of Compliance, General Counsel or Associate General
Counsel.
f. After the Director of Compliance, General Counsel or Associate General
Counsel has reviewed the issue, you will be instructed to continue the
prohibitions against trading and communication, or you will be allowed to
trade and communicate the information.
2. Important Specific Examples
---------------------------
a. If you have a telephone or face-to-face conversation with a senior
executive of a publicly-traded company and are provided information about
the company that you have reason to believe has not yet been disclosed in
a widely-disseminated publication such as a press release, quarterly
report or other public filing, you have received non-public information.
This information is considered non- public even if you believe that the
company executive would provide the same information to other analysts or
portfolio managers who call the company. Until information has been
disclosed in a manner that makes it available to (or capable of being
accessed by) the investment community as a whole, it is considered
non-public. If the information is material, as described above, you may
not trade while in possession of this information unless you first
discuss the matter and obtain approval from the Director of Compliance,
General Counsel or Associate General Counsel. Although it may be lawful
for an analyst to act on the basis of material information that the
company's management has chosen to disclose selectively to that analyst,
where the information is provided in a one-on-one context,
<PAGE>
regulators are likely to question such conduct. Approval from the Law and
Regulation Department will therefore depend on the specific circumstances
of the information and the disclosure. Under the Supreme Court's
important decision of Dirks v. SEC, 463 U.S. 646 (1983), securities
analysts may be free to act on selectively disclosed material information
if it is provided by company executives exclusively to achieve proper
corporate purposes.
b. If you obtain material information in the course of an analysts'
conference call or meeting conducted by a publicly-traded company in the
ordinary course of its business in which representatives of several other
firms or investors are also present (as distinguished from the one-on-one
situation described in the preceding paragraph), you may act on the basis
of that information without need to consult with the Director of
Compliance, General Counsel or Associate General Counsel, even if the
information has not yet been published by the news media. You should be
aware, however, that if there is something highly unusual about the
meeting or conference call that leads you to question whether it has been
authorized by the company or is otherwise suspect, you should first
consult with the Director of Compliance, General Counsel or Associate
General Counsel.
c. If you are provided material information by a company and are requested
to keep such information confidential, you may not trade while in
possession of that information before first obtaining the approval of the
Director of Compliance, General Counsel or the Associate General Counsel.
As these examples illustrate, the legal requirements governing insider
trading are not always obvious. You should therefore always consult with the
Director of Compliance, General Counsel or Associate General Counsel if you have
any question at all about the appropriateness of your proposed conduct.
3. Restricting Access To Material, Non-Public Information
------------------------------------------------------
Information in your possession that you identify as material and non-public
may not be communicated to anyone, including persons within Seligman, except
as provided in paragraphs 1 and 2 above. In addition, care should be taken
so that such information is secure. For example, files containing material,
non-public information should be sealed; access to computer files containing
material, non-public information should be restricted.
4. Resolving Issues Concerning Insider Trading
-------------------------------------------
If, after consideration of the items set forth in paragraphs 1 and 2, doubt
remains as to whether information is material or non-public, or if there is
any unresolved question as to the applicability or interpretation of the
foregoing procedures, or as to the propriety of any action, it must be
discussed with the Director of Compliance, General Counsel and or the
Associate General Counsel before trading or communicating the information to
anyone.
5. Personal Securities Trading
---------------------------
All Employees shall follow with respect to personal Securities trading the
procedures set forth in the Code of Ethics. In addition, no Employee shall
establish a brokerage Account with a Firm other than those previously
approved without the prior consent of the Director of Compliance and every
Employee shall be subject to reporting requirements under Section III.5 of
the Code of Ethics. The Director of Compliance, or his designee, shall
monitor the personal Securities trading of all Employees.
<PAGE>
Appendix B
Amended November 19, 1999
J. & W. SELIGMAN & CO. INCORPORATED
-----------------------------------
TRADE AUTHORIZATION REQUEST FORM
<TABLE>
<CAPTION>
<S> <C> <C>
1. Name of Employee/Telephone Number: ______________________________
2. If different than #1, name of the person in whose
account the trade will occur: ______________________________
3. Relationship of (2) to (1): ______________________________
4. Name the firm at which the account is held: ______________________________
5. Name of Security: ______________________________
6. Number of shares or units to be bought or
sold or amount of bond: ______________________________
7. Approximate price per share, unit or bond: ______________________________
8. Check those that are applicable: _______ Purchase ______ Sale
_____ Market Order ______ Limit Order (Price of Limit Order: _____)
9. Do you possess material non public information regarding
the Security or the issuer of the Security? ______ Yes ______ No
10. To your knowledge, are there any outstanding (purchase or
sell) orders for this Security or any Equivalent Security by
a Seligman Client? ______ Yes ______ No
11. To your knowledge, is this Security or Equivalent Security
being considered for purchase or sale for one or more
Seligman Clients? ______ Yes ______ No
12. Is this Security being acquired in an initial or secondary public
offering? ______ Yes ______ No
13. Is this Security being acquired in a private placement? ______ Yes ______ No
14. Have you or any Related Account covered by the pre-
authorization provisions of the Code purchased or sold
this Security within the past 60 days? ______ Yes ______ No
</TABLE>
<PAGE>
- - - - - -
For Investment Team Members Only:
---------------------------------
15. Has any Client Account managed by your team purchased or sold this Security
or Equivalent Security within the past seven calendar days or do you expect
any such account to purchase or sell this Security or Equivalent Security
within seven calendar days of your purchase or sale? ______ Yes ______ No
16. Why is this Security Transaction appropriate for you and not for one or
more of your team's Clients?
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
_________________________________________________________________________
- - - - - -
I have read the J. & W. Seligman & Co. Incorporated Code of Ethics, as revised
on November 19, 1999, within the prior 12 months and believe that the proposed
trade(s) fully complies with the requirements of the Code of Ethics and Insider
Trading policy.
____________________________
Employee Signature
____________________________
Date Submitted
Authorized by: ________________________
Date: ________________________
<PAGE>
Appendix C
Amended November 19, 1999
REPORT OF SECURITIES BENEFICIALLY OWNED
AS OF DECEMBER 31, 1999
The following is a list of all Securities positions (except open-end
investment companies, U.S. Government Securities and money market instruments)
in which I have direct or indirect beneficial ownership, as defined in the Code
of Ethics. This includes Securities held at home, in safe deposit boxes or by
an issuer.
<TABLE>
<CAPTION>
Description of Security No. of Shares Principal Amount Location of Security
<S> <C> <C> <C>
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
- ----------------------- ------------- ---------------- --------------------
</TABLE>
_______ The list above (and any additional sheets I have attached)
represents all my Securities positions in which I have direct or
indirect beneficial ownership as defined in the Code of Ethics.
_______ I only have a beneficial ownership interest in open-end
investment companies, U.S. Government Securities and money market
instruments, and/or I do not beneficially own any Securities.
Date: ________________________ _____________________________
First Last, Company
<PAGE>
Appendix D
Amended November 19, 1999
EMPLOYEE REPORTING QUESTIONNAIRE
--------------------------------
Employee Name: _____________________ Ext: _____ Department: _________________
Please Print
Company/Affiliate: ______________________________ Supervisor: _______________
1. Securities Accounts
-------------------
Do you have any Accounts in which Securities can be purchased or sold over
which you have control or in which you have a Beneficial Interest, as
defined in Seligman's Code of Ethics?
Yes _______ No ________
If yes, please list all such Accounts:
Account Account Type of
Institution Number Title Account
------------- ------- ------- -------
_____________________ ______________ ________________ ___________
_____________________ ______________ ________________ ___________
_____________________ ______________ ________________ ___________
2. Financial Interests
-------------------
Do you have any private placements, restricted stock warrants, general or
limited partnerships, or other investment interests in any organization
(public, private or charitable) not held in the accounts listed above?
Please include Securities and certificates held in your custody.
Yes _______ No _______
If yes, please describe: ________________________________________________
_________________________________________________________________________
3. Outside Activities/Affiliations
-------------------------------
a) Do you have any activities outside Seligman or its affiliates for
which you receive additional compensation:
Yes _______ No _______
If yes, please describe: ________________________________________________
_________________________________________________________________________
b) Do you serve in the capacity of officer, director, partner or employee
(or in any other fiduciary capacity) for any company or organization
(public, private or charitable) other than Seligman or its affiliates.
Yes _______ No _______
If yes, please describe: ________________________________________________
_________________________________________________________________________
I hereby certify that I have read and understand the foregoing statements
and that each of my responses thereto are true and complete. I agree to
immediately inform the Director of Compliance if there is any change in any
of the above answers. I also understand that any misrepresentation or
omissions of facts in response to this questionnaire and failure to
immediately inform the Director of Compliance of any changes to responses
provided herein may result in termination of my employment.
____________________________________ ___________________
Employee's Signature Date
____________________________________
Title
<PAGE>
Appendix E
Amended November 19, 1999
Annual Certification of Compliance with the Code of Ethics
----------------------------------------------------------
I acknowledge that I have received and read the Code of Ethics and Insider
Trading Policies and Procedures, as amended on November 19, 1999 and hereby
agree, in consideration of my continued employment by J. & W. Seligman & Co.
Incorporated, or one of its subsidiaries or affiliates, to comply with the Code
of Ethics and Insider Trading Policies and Procedures.
I hereby certify that during the past calendar year:
1. In accordance with the Code of Ethics, I have fully disclosed the
Securities holdings in my Employee Account(s) and Employee Related
Account(s) (as defined in the Code of Ethics).
2. In accordance with the Code of Ethics, I have maintained all Employee
Accounts and Employee Related Accounts at Ernst & Company (Investec) or
Merrill Lynch located at 712 Fifth Avenue, New York, NY except for Accounts
as to which the Director of Compliance has provided written permission to
maintain elsewhere.
3. In accordance with the Code of Ethics, except for transactions exempt from
reporting under the Code of Ethics, I have arranged for the Director of
Compliance to receive duplicate confirmations and statements for each
Securities Transaction of all Employee Accounts and Employee Related
Accounts, and I have reported all Securities Transactions in each of my
Employee Accounts and Employee Related Accounts.
4. I have complied with the Code of Ethics in all other respects.
________________________________
Employee Signature
________________________________
Date:____________ Print Name
