| CLASS R | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | 4/30/03* |
| | | Year Ended December 31, | | to |
| | | | 2006 | | | | 2005 | | | | 2004 | | | 12/31/03 |
| Per Share Data: | | | | | | | | | | | | | | | | |
| Net Asset Value, Beginning of Period | | $ | 11.67 | | | $ | 11.58 | | | $ | 10.42 | | | $ | 8.66 | |
| Income from Investment Operations: | | | | | | | | | | | | | | | | |
| Net investment income | | | 0.06 | | | | 0.03 | | | | 0.04 | | | | 0.01 | |
| Net realized and unrealized gain on investments | | | | | | | | | | | | | | | | |
| and foreign currency transactions | | | 1.80 | | | | 0.09 | | | | 1.17 | | | | 1.77 | |
| Total from Investment Operations | | | 1.86 | | | | 0.12 | | | | 1.21 | | | | 1.78 | |
| Less Distributions: | | | | | | | | | | | | | | | | |
| Dividends from net investment income | | | (0.05 | ) | | | (0.03 | ) | | | (0.05 | ) | | | (0.02 | ) |
| Distributions from net realized capital gain | | | (0.39 | ) | | | — | | | | — | | | | — | |
| Total Distributions | | | (0.44 | ) | | | (0.03 | ) | | | (0.05 | ) | | | (0.02 | ) |
| Net Asset Value, End of Period | | $ | 13.09 | | | $ | 11.67 | | | $ | 11.58 | | | $ | 10.42 | |
| |
| Total Return | | | 15.99 | % | | | 1.01 | % | | | 11.57 | %# | | | 20.50 | % |
| |
| Ratios/Supplemental Data: | | | | | | | | | | | | | | | | |
| Net assets, end of period (000s omitted) | | $ | 600 | | | $ | 385 | | | $ | 321 | | | $ | 2 | |
| Ratio of expenses to average net assets | | | 1.58 | % | | | 1.55 | % | | | 1.54 | % | | | 1.58 | %† |
| Ratio of net investment income | | | | | | | | | | | | | | | | |
| to average net assets | | | 0.46 | % | | | 0.24 | % | | | 0.40 | % | | | 0.09 | %† |
| Portfolio turnover rate | | | 93.45 | % | | | 68.31 | % | | | 43.50 | % | | | 140.33 | %ø |
See Notes to Financial Statements.
Report of Independent Registered
Public Accounting Firm
The Board of Directors and Shareholders,
Seligman Common Stock Fund, Inc.:
We have audited the accompanying statement of assets and liabilities of Seligman Common Stock Fund, Inc. (the “Fund”), including the portfolio of investments, as of December 31, 2006, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the periods presented. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2006, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Seligman Common Stock Fund, Inc. as of December 31, 2006, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for the periods presented, in conformity with accounting principles generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
February 27, 2007
36
Matters Relating to the Directors’
Consideration of the Continuance of the
Management Agreement
The directors of Seligman Common Stock Fund, Inc. unanimously approved the continuance of the Management Agreement with the Manager at a meeting held on November 15, 2006.
Prior to approval of the continuance of the Management Agreement, the directors requested and evaluated extensive materials from the Manager. They reviewed the proposed continuance of the Management Agreement with the Manager and with experienced counsel who advised on the legal standards for their consideration. The independent directors also discussed the proposed continuance in a private session with counsel.
The directors considered their knowledge of the nature and quality of the services provided by the Manager to the Fund gained from their experience as directors and/or trustees of the Seligman Group of Funds, their overall confidence in the Manager’s integrity and competence they have gained from that experience, the Manager’s initiative in identifying and raising potential issues with the directors and its responsiveness, frankness and attention to concerns raised by the directors in the past, including the Manager’s willingness to consider and implement organizational and operational changes designed to improve investment results and the services provided to the Seligman Group of Funds. The directors noted that the Board has six regular meetings each year, at each of which they receive presentations from the Manager on the investment results of the Fund and review extensive materials and information presented by the Manager.
The directors also considered all other factors they believed relevant, including the specific matters discussed below. In their deliberations, the directors did not identify any particular information that was all-important or controlling, and directors attributed different weights to the various factors. The directors determined that the selection of the Manager to manage the Fund, and the overall arrangements between the Fund and the Manager as provided in the Management Agreement, including the management fee, were fair and reasonable in light of the services performed, expenses incurred and such other matters as the directors considered relevant in the exercise of their reasonable judgment. The material factors and conclusions that formed the basis for the directors’ determination included the following:
Nature, Extent and Quality of Services Provided
The directors considered the scope and quality of services provided by the Manager under the Management Agreement. The directors considered the quality of the investment research capabilities of the Manager and the other resources it has dedicated to performing services for the Fund. They also noted the professional experience and qualifications of the Fund’s portfolio management team and other senior personnel of the Manager. At prior meetings the directors had also considered the Manager’s selection of brokers and dealers for portfolio transactions. The quality of administrative and other services, including the Manager’s role in coordinating the activities of the Fund’s other service providers, also were considered. The directors concluded that, overall, they were satisfied with the nature, extent and quality of services provided (and expected to be provided) to the Fund under the Management Agreement.
37
Matters Relating to the Directors’
Consideration of the Continuance of the
Management Agreement
On an ongoing basis, the Manager reports to the directors on the status of various matters relating to market timing activity affecting certain funds in the Seligman Group of Funds. In connection with the continuance review, the Manager and its counsel and the directors’ special counsel also addressed, among other matters: the action brought in September 2005 by the Manager and its president against the Attorney General of the State of New York seeking an order enjoining the Attorney General from, among other things, investigating the fees paid by the funds in the Seligman Group of Funds to the Manager; and the action brought in September 2006 by the Attorney General against the Manager, Seligman Data Corp., the president of the Manager and Seligman Advisors, Inc. (“Seligman Advisors”) relating to market timing and also claiming that the fees charged by the Manager are excessive. The directors also noted the indication in September 2005 by the Staff of the New York Office of the Securities and Exchange Commission (“SEC”) that it was considering recommending that the SEC institute a formal action against the Manager and Seligman Advisors relating to market timing. After a detailed presentation by the Manager and further discussion with the Manager, the Manager’s counsel, the directors’ special counsel and other counsel independent of the Manager, and consideration of the potential consequences of the various matters referred to above, the independent directors concluded that they retained confidence in the integrity of the Manager and its ability to provide management services to the Fund.
Costs of Services Provided and Profitability
The directors reviewed information concerning profitability of the Manager’s investment advisory and investment company activities and its financial condition based on historical information and estimates for the current year, as well as historical and estimated profitability data for the Fund. The directors reviewed with the Manager’s chief financial officer, the assumptions and methods of allocation used by the Manager in preparing the profitability data. The directors recognized that it is difficult to make comparisons of profitability from fund management contracts because comparative information is not generally publicly available and is affected by numerous factors. In considering profitability information, the directors considered the effect of fall-out benefits on the Manager’s expenses, as well as the “revenue sharing” arrangements the Manager has entered into with certain entities that distribute shares of the Seligman Group of Funds. The directors focused on profitability of the Manager’s relationships with the Fund before taxes and distribution expenses. The directors concluded that they were satisfied that the Manager’s level of profitability from its relationship with the Fund was not excessive.
Fall-Out Benefits
The directors considered that the Manager benefits from soft dollar arrangements whereby it receives brokerage and research services from brokers that execute the Seligman Group of Funds’ purchases and sales of securities. They reviewed a description of the Manager’s practices with respect to allocating portfolio brokerage for brokerage and research services, data on the dollar amount of commissions allocated for third-party research and brokerage services and for proprietary research and bro-
38
Matters Relating to the Directors’
Consideration of the Continuance of the
Management Agreement
kerage services, and a current list of firms providing third-party research and brokerage to the Manager. The directors also considered that a broker-dealer affiliate of the Manager receives 12b-1 fees from the Fund in respect of shares held in certain accounts, and that the Fund’s distributor (another affiliate of the Manager) retains a portion of the 12b-1 fees from the Fund and receives a portion of the sales charges on sales or redemptions of certain classes of shares. The directors further recognized that the Manager’s profitability would be somewhat lower without these benefits. The directors noted that the Manager may derive reputational and other benefits from its association with the Fund. The directors concluded that the fall-out benefits realized by the Manager from its relationship with the Fund were appropriate.
Investment Results
In addition to the information received by the directors for the meeting, the directors receive detailed performance information for the Funds at each regular Board meeting during the year. The directors reviewed performance information for the Fund covering a wide range of periods, including the first nine months of 2006, the preceding six calendar years and annualized one-, three-, five- and ten-year rolling periods ending September 30, 2006.
The directors reviewed information showing performance of the Fund compared to other funds in the Lipper Large-Cap Core Funds Average, the Standard & Poor’s 500 Index and to a group of competitor funds selected by the Manager. The directors also reviewed information about the portfolio turnover rate of the Fund compared to other investment companies with similar investment objectives. The directors noted that while the Fund’s results were below its benchmarks for the five-year period, in subsequent periods the Fund’s results varyingly exceeded certain of its benchmarks while trailing others in the same period. Taking into account these comparisons and the other factors considered, the directors concluded that the Fund’s investment results over time had been satisfactory.
Management Fees and Other Expenses
The directors considered the management fee rate paid by the Fund to the Manager. The directors recognized that it is difficult to make comparisons of management fees because there are variations in the services that are included in the fees paid by other funds.
The directors noted that the Manager manages a registered investment company that is a “clone” of the Fund but is sold exclusively to insurance company separate accounts. The directors further noted that the management fee rates paid by the Fund is higher than the management fee rate paid by its “clone” portfolio. The Manager explained that the lower fee rate applicable to the clone portfolio was largely the result of fee rate increases at the Fund that had not been sought for the clone portfolio. This was because, in view of the small size of the clone portfolio and the fact that, at various times, the clone portfolio had been subsidized by the Manager, the Manager had determined not to recommend fee rate increases for the clone portfolio to match those recommended for the Fund.
The directors compared the Fund’s management fee rate to the rate paid by a subset of funds, with
39
Matters Relating to the Directors’
Consideration of the Continuance of the
Management Agreement
assets more nearly comparable to those of the Fund in its Lipper category (the “peer group”). The information showed that the Fund’s current effective management fee rate was among the lowest of the management fees paid by the funds in the peer group.
The directors also considered the total expense ratio of the Fund in comparison to the fees and expenses of funds within its peer group. In considering the expense ratio of the Fund, the directors noted that the Fund elected to have shareholder services provided at cost by Seligman Data Corp. (“SDC”), a company owned by certain of the investment companies in the Seligman Group of Funds that provides shareholder services to the Fund and other investment companies in the Seligman Group of Funds at cost. SDC provides services exclusively to the Seligman Group of Funds, and the directors believe that the arrangement with SDC has provided the Fund and its shareholders with a consistently high level of service.
The directors noted that the Fund’s expense ratio was comparable to the median and average expense ratios of its peer group and they concluded that the expense ratio was reasonable in light of the high quality of service that the Fund receives and the other factors considered.
Economies of Scale
The directors noted that the management fee schedule for the Fund contains breakpoints that reduce the fee rate on assets above specified levels, although, at the Fund’s current asset levels, it was unlikely to benefit from them in the next year. The directors recognized that there is no direct relationship between the economies of scale realized by funds and those realized by their investment adviser as assets increase. The directors do not believe that there is a uniform methodology for establishing breakpoints that give effect to fund specific services provided by the Manager. The directors also observed that in the investment company industry as a whole, as well as among funds similar to the Fund, there is no uniformity or pattern in the fees and asset levels at which breakpoints (if any) apply, and that the advisory agreements for many competitor funds do not have breakpoints at all. Having taken these factors into account, the directors concluded that the Fund’s breakpoint arrangements were acceptable under the Fund’s circumstances.
40
Directors and Officers
Information pertaining to the Directors and Officers of Seligman Common Stock Fund, Inc. is set forth below.
Independent Directors
| Name, (Age), Position(s) | | Principal Occupation(s) During Past Five Years, Directorships |
| held with Fundø | | and Other Information |
| |
| John R. Galvin (77)1,3 | | Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts |
| • Director: 1995 to Date | | University; Director or Trustee of each of the investment companies of |
| • Oversees 61 Portfolios | | the Seligman Group of Funds†; and Chairman Emeritus, American |
| in Fund Complex | | Council on Germany. Formerly, Director, Raytheon Co. (defense and com- |
| | | mercial electronics), Governor of the Center for Creative Leadership, and |
| | | Trustee, Institute for Defense Analyses. From February 1995 until June |
| | | 1997, he was a Director, USLIFE Corporation (life insurance). From June |
| | | 1987 to June 1992, Mr. Galvin was the Supreme Allied Commander, |
| | | NATO, and the Commander-in-Chief, United States European Command. |
| |
| John F. Maher (63)1,3 | | Retired President and Chief Executive Officer of Great Western Financial |
| • Director: December 2006 | | Corporation and its principal subsidiary, Great Western Bank (a federal |
| to Date** | | savings bank); and Director or Trustee of each of the investment compa- |
| • Oversees 57 Portfolios | | nies of the Seligman Group of Funds† (with the exception of Seligman |
| in Fund Complex | | Cash Management Fund, Inc., Seligman New Technologies Fund, Inc., |
| | | Seligman New Technologies Fund II, Inc., and Seligman Quality |
| | | Municipal Fund, Inc.). |
| |
| Frank A. McPherson (73)2,3 | | Retired Chairman of the Board and Chief Executive Officer of Kerr-McGee |
| • Director: 1995 to Date | | Corporation (diversified energy and chemical company); Director or |
| • Oversees 61 Portfolios | | Trustee of each of the investment companies of the Seligman Group of |
| in Fund Complex | | Funds†; and Director, DCP Midstream GP, LLP (natural gas processing), |
| | | Integris Health (owner of various hospitals), Oklahoma Chapter of the |
| | | Nature Conservancy, Oklahoma Medical Research Foundation, Boys and |
| | | Girls Clubs of Oklahoma, Oklahoma City Public Schools Foundation, and |
| | | Oklahoma Foundation for Excellence in Education. Formerly, Director, |
| | | ConocoPhillips (integrated international oil corporation), Kimberly-Clark |
| | | Corporation (consumer products) and BOK Financial (bank holding com- |
| | | pany). From 1990 until 1994, Director, the Federal Reserve System’s |
| | | Kansas City Reserve Bank. |
| |
| Betsy S. Michel (64)1,3 | | Attorney; Director or Trustee of each of the investment companies of the |
| • Director: 1984 to Date | | Seligman Group of Funds†; and Trustee, The Geraldine R. Dodge |
| • Oversees 61 Portfolios | | Foundation (charitable foundation). Formerly, Chairman of the Board of |
| in Fund Complex | | Trustees of St. George’s School (Newport, RI); and Trustee, World |
| | | Learning, Inc. (international educational training), and Council of New |
| | | Jersey Grantmakers. |
____________
See footnotes on page 44.
41
Directors and Officers
Independent Directors (continued)
| Name, (Age), Position(s) | | Principal Occupation(s) During Past Five Years, Directorships |
| held with Fundø | | and Other Information |
| |
| Leroy C. Richie (65)1,3 | | Counsel, Lewis & Munday, P.C. (law firm); Chairman and Chief Executive |
| • Director: 2000 to Date | | Officer, Q Standards Worldwide, Inc. (library of technical standards); |
| • Oversees 60 Portfolios | | Director or Trustee of each of the investment companies of the Seligman |
| in Fund Complex | | Group of Funds† (with the exception of Seligman Cash Management |
| | | Fund, Inc.); Director, Kerr-McGee Corporation (diversified energy and |
| | | chemical company), Infinity, Inc. (oil and gas services and exploration), |
| | | and Vibration Control Technologies, LLC (auto vibration technology); |
| | | Lead Outside Director, Digital Ally Inc. (digital imaging); Director and |
| | | Chairman, Highland Park Michigan Economic Development Corp.; and |
| | | Chairman, Detroit Public Schools Foundation. Formerly, Trustee, New |
| | | York University Law Center Foundation; and Vice Chairman, Detroit |
| | | Medical Center and Detroit Economic Growth Corp. From 1990 until |
| | | 1997, Vice President and General Counsel, Automotive Legal Affairs, |
| | | Chrysler Corporation. |
| |
| Robert L. Shafer (74)2,3 | | Ambassador and Permanent Observer of the Sovereign Military Order of |
| • Director: 1980 to Date | | Malta to the United Nations; and Director or Trustee of each of the |
| • Oversees 61 Portfolios | | investment companies of the Seligman Group of Funds†. From May 1987 |
| in Fund Complex | | until June 1997, Director, USLIFE Corporation (life insurance) and from |
| | | 1973 until January 1996, Vice President, Pfizer Inc. (pharmaceuticals). |
| |
| James N. Whitson (71)1,3 | | Retired Executive Vice President and Chief Operating Officer, Sammons |
| • Director: 1993 to Date | | Enterprises, Inc. (a diversified holding company); Director or Trustee |
| • Oversees 61 Portfolios | | of each of the investment companies of the Seligman Group of Funds†; |
| in Fund Complex | | and Director, CommScope, Inc. (manufacturer of coaxial cable). Formerly, |
| | | Director and Consultant, Sammons Enterprises, Inc. and Director, |
| | | C-SPAN (cable television networks). |
____________
See footnotes on page 44.
42
Directors and Officers
Interested Directors and Principal Officers
| Name, (Age), Position(s) | | Principal Occupation(s) During Past Five Years, Directorships |
| held with Fundø | | and Other Information |
| |
| William C. Morris* (68) | | Chairman and Director, J. & W. Seligman & Co. Incorporated; Chairman |
| • Director and Chairman | | of the Board and Director or Trustee of each of the investment compa- |
| of the Board: 1988 to Date | | nies of the Seligman Group of Funds†; Chairman and Director, Seligman |
| • Oversees 61 Portfolios | | Advisors, Inc., Seligman Services, Inc. and Carbo Ceramics Inc. (manu- |
| in Fund Complex | | facturer of ceramic proppants for oil and gas industry); Director, |
| | | Seligman Data Corp.; and President and Chief Executive Officer of The |
| | | Metropolitan Opera Association. Formerly, Director, Kerr-McGee |
| | | Corporation (diversified energy and chemical company) and Chief |
| | | Executive Officer of each of the investment companies of the Seligman |
| | | Group of Funds. |
| |
| Brian T. Zino* (54) | | Director and President, J. & W. Seligman & Co. Incorporated; President, |
| • Director: 1999 to Date | | Chief Executive Officer and, with the exception of Seligman Cash |
| • President: 1995 to Date | | Management Fund, Inc., Director or Trustee of each of the investment |
| • Chief Executive Officer: | | companies of the Seligman Group of Funds†; Director, Seligman |
| 2002 to Date | | Advisors, Inc. and Seligman Services, Inc.; and Chairman, Seligman Data |
| • Oversees 60 Portfolios | | Corp. Formerly, Member of the Board of Governors of the Investment |
| in Fund Complex | | Company Institute; and Director (formerly Chairman), ICI Mutual |
| | | Insurance Company. |
| |
| John B. Cunningham (42) | | Managing Director and Chief Investment Officer, J. & W. Seligman & Co. |
| • Vice President and | | Incorporated; Vice President and Portfolio Manager of Tri-Continental |
| Portfolio Manager: | | Corporation and Seligman Income and Growth Fund, Inc.; Vice President |
| 2004 to Date | | of Seligman Portfolios, Inc. and Portfolio Manager of its Common Stock |
| | | Portfolio; and Co-Portfolio Manager of Seligman TargetHorizon ETF |
| | | Portfolios, Inc. Formerly, Managing Director, Senior Portfolio Manager of |
| | | Salomon Brothers Asset Management. |
| |
| Eleanor T.M. Hoagland (55) | | Managing Director, J. & W. Seligman & Co. Incorporated; and Vice |
| • Vice President and | | President and Chief Compliance Officer of each of the investment com- |
| Chief Compliance Officer: | | panies of the Seligman Group of Funds†. |
| 2004 to Date | | |
| |
| Thomas G. Rose (49) | | Managing Director, Chief Financial Officer, and Treasurer, J. & W. |
| • Vice President: | | Seligman & Co. Incorporated; Senior Vice President, Finance, Seligman |
| 2000 to Date | | Advisors, Inc. and Seligman Data Corp.; and Vice President of each of the |
| | | investment companies of the Seligman Group of Funds†, Seligman |
| | | Services, Inc. and Seligman International, Inc. |
____________
See footnotes on page 44.
43
Directors and Officers
Interested Directors and Principal Officers (continued)
| Name, (Age), Position(s) | | Principal Occupation(s) During Past Five Years, Directorships |
| held with Fundø | | and Other Information |
| |
| Lawrence P. Vogel (50) | | Senior Vice President and Treasurer, Investment Companies, J. & W. |
| • Vice President: 1992 to Date | | Seligman & Co. Incorporated; Vice President and Treasurer of each of the |
| • Treasurer: 2000 to Date | | investment companies of the Seligman Group of Funds†; and Treasurer, |
| | | Seligman Data Corp. |
| |
| Frank J. Nasta (42) | | Director, Managing Director, General Counsel and Corporate Secretary, |
| • Secretary: 1994 to Date | | J. & W. Seligman & Co. Incorporated; Secretary of each of the investment |
| | | companies of the Seligman Group of Funds†; Director and Corporate |
| | | Secretary, Seligman Advisors, Inc. and Seligman Services, Inc.; and |
| | | Corporate Secretary, Seligman International, Inc. and Seligman Data Corp. |
The Fund’s Statement of Additional Information (SAI) includes additional information about Fund directors and is available, without charge, upon request. You may call toll-free (800) 221-2450 in the US or call collect (212) 682-7600 outside the US to request a copy of the SAI, to request other information about the Fund, or to make shareholder inquiries
________ |
ø | | The address for each of the directors and officers is 100 Park Avenue, 8th Floor, New York, NY 10017. Each director serves for an indefinite term, until the election and qualification of a successor or until his or her earlier death, resignation, or removal. Each officer is elected annually by the Board of Directors. |
|
† | | The Seligman Group of Funds consists of 24 registered investment companies. |
|
* | | Messrs. Morris and Zino are considered “interested persons” of the Fund, as defined in the Investment Company Act of 1940, as amended, by virtue of their positions with J. & W. Seligman & Co. Incorporated and its affiliates. |
|
** | | Mr. Maher was appointed to the Board on December 18, 2006. |
|
| Member: | | 1 Audit Committee |
| | | 2 Director Nominating Committee |
| | | 3 Board Operations Committee |
44
Required Federal Income Tax
Information (unaudited)
Of ordinary dividends paid to shareholders during the Fund’s fiscal year ended December 31, 2006, 100% is eligible for the dividends received deduction for corporations.
For the fiscal year ended December 31, 2006, the Fund designates 100%, or the maximum amount allowable, of its dividend distributions as qualified dividend income.
Additional Fund Information
Quarterly Schedule of Investments
A complete schedule of portfolio holdings owned by the Fund will be filed with the SEC for the first and third quarters of each fiscal year on Form N-Q, and will be available to shareholders (i) without charge, upon request, by calling toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US or (ii) on the SEC’s website at www.sec.gov.1 In addition, the Form N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C. Information on the operation of the Public Reference Room may be obtained by calling (800) SEC-0330. Certain of the information contained on the Fund’s Form N-Q is also made available to shareholders on Seligman’s website at www.seligman.com.1
Proxy Voting
A description of the policies and procedures used by the Fund to determine how to vote proxies relating to portfolio securities as well as information regarding how the Fund voted proxies relating to portfolio securities during the 12-month period ended June 30 of each year will be available (i) without charge, upon request, by calling toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US and (ii) on the SEC’s website at www.sec.gov.1 Information for each new 12-month period ending June 30 will be available no later than August 31 of that year.
____________
1 These website references are inactive textual references and information contained in or otherwise accessible through these websites does not form a part of this report or the Fund’s prospectuses or statement of additional information.
45
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| | This report is intended only for the information of shareholders or those who have received the offering prospectus covering shares of Capital Stock of Seligman Common Stock Fund, Inc., which contains information about the investment objectives, risks, charges, and expenses of the Fund, each of which should be considered carefully before investing or sending money. | |
| | | | |
| | | | EQCS2 12/06 |
| ITEM 2. | CODE OF ETHICS.
As of December 31, 2006, the registrant has adopted a code of ethics that applies to its principal executive and principal financial officers. |
| | |
| ITEM 3. | AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant’s board of directors has determined that Mr. James N. Whitson, a member of its audit committee, is an audit committee financial expert. Mr. Whitson is “independent” as such term is defined in Form N-CSR. |
| | |
| ITEM 4. | PRINCIPAL ACCOUNTANT FEES AND SERVICES.
(a) – (d) Aggregate fees billed to the registrant for the last two fiscal years for professional services rendered by the registrant’s principal accountant were as follows: |
| | | | | | | |
| | | | 2006 | | 2005 | |
| | Audit Fees | | $41,170 | | $39,210 | |
| | Audit-Related Fees | | – | | – | |
| | Tax Fees | | 2,500 | | 2,350 | |
| | All Other Fees | | – | | – | |
| | | | | | | |
| | Audit fees include amounts related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Tax fees include amounts related to tax compliance, tax planning, and tax advice. Aggregate fees billed by the registrant’s principal accountant for the last two fiscal years for non-audit services provided to the registrant’s investment adviser (not including a sub-adviser whose role is primarily portfolio management and is subcontracted or overseen by another investment adviser) and any entity controlling, controlled by, or under common control with the investment adviser that provides |
| | |
| | ongoing services to the registered investment company, where the engagement relates directly to the operations and financial reporting of the registrant, were as follows: |
| | |
| | | | 2006 | | 2005 | |
| | Audit-Related Fees | | $141,710 | | $124,560 | |
| | Tax Fees | | 11,955 | | 8,000 | |
| | All Other Fees | | – | | – | |
| | | | | | | |
| | Audit-related fees include amounts for (i) attestation services for the registrant’s shareholder service agent; (ii) testing of the registrant’s shareholder service agent’s conversion to a new record-keeping system and (iii) performance of certain agreed-upon procedures relating to certain services performed by the registrant’s distributor. Tax fees include amounts related to tax compliance, tax planning, and tax advice for and an evaluation of certain tax reporting procedures of the registrant’s shareholder service agent. (e) (1) The Audit Committee is required to preapprove audit and non-audit services performed for the registrant by the principal accountant in order to assure that the provision of such services does not impair the principal accountant’s independence. The Audit Committee also is required to preapprove certain non-audit services performed by the registrant’s principal accountant for the registrant’s investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser) and certain of the adviser’s affiliates that provide services directly related to the operations and financial reporting of the registrant. Unless a type of service to be provided by the principal accountant has received preapproval, it will require specific preapproval by the Audit Committee. The Audit Committee may delegate preapproval authority to one or more of its members. The member or members to whom such authority is delegated shall report any preapproval decisions to the Audit Committee at its next scheduled meeting. Notwithstanding the foregoing, under certain circumstances, preapproval of non-audit services of a de minimis amount is not required. (2) No services included in (b) – (d) above were approved pursuant to the waiver provisions of paragraphs (c)(7)(i)(C) or (c)(7)(ii) of Rule 2-01 of Regulation S-X. |
| | |
| | (f) Not applicable. (g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered to the registrant, its investment adviser (not including any sub-adviser whose role is primarily portfolio management and is subcontracted with or overseen by another investment adviser), and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $156,165 and $134,910, respectively. (h) All non-audit services rendered in (g) above were pre-approved by the registrant’s audit committee. Accordingly, the audit committee considered whether these services were compatible with maintaining the principal accountant’s independence. |
| | |
| ITEM 5. | AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable. |
| | |
| ITEM 6. | SCHEDULE OF INVESTMENTS.
Included in Item 1 above. |
| | |
| ITEM 7. | DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable. |
| | |
ITEM 8.
| PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable. |
| | |
| ITEM 9. | PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.
Not applicable. |
| | |
| ITEM 10. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable. |
| | |
| ITEM 11. | CONTROLS AND PROCEDURES.
(a) The registrant's principal executive officer and principal financial officer have concluded, based upon their evaluation of the registrant's disclosure controls and procedures as conducted within 90 days of the filing date of this report, that these disclosure controls and |
| | procedures provide reasonable assurance that material information required to be disclosed by the registrant in the report it files or submits on Form N-CSR is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms and that such material information is accumulated and communicated to the registrant's management, including its principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions regarding required disclosure. (b) The registrant’s principal executive officer and principal financial officer are aware of no changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
| | |
| ITEM 12. | EXHIBITS. |
| | | |
| | (a)(1) | Code of Ethics for Principal Executive and Principal Financial Officers. |
| | | |
| | (a)(2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. |
| | | |
| | (a)(3) | Not applicable. |
| | | |
| | (b) | Certifications of chief executive officer and chief financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SELIGMAN COMMON STOCK FUND, INC.
| By: | |
| | /S/ BRIAN T. ZINO
Brian T. Zino
President and Chief Executive Officer |
| | |
| Date: | March 9, 2007 |
| | |
| Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. |
| |
| By: | |
| | /S/ BRIAN T. ZINO
Brian T. Zino
President and Chief Executive Officer |
| | |
| Date: | March 9, 2007 |
| |
| By: | |
| | /S/ LAWRENCE P.VOGEL
Lawrence P. Vogel
Vice President, Treasurer and Chief Financial Officer |
| | |
| Date: | March 9, 2007 |
| | |
SELIGMAN COMMON STOCK FUND, INC.
EXHIBIT INDEX
| (a)(1) | Code of Ethics for Principal Executive and Principal Financial Officers. |
| | |
| (a)(2) | Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940. |
| | |
| (b) | Certification of chief executive officer and chief financial officer as required by Rule 30a-2(b) of the Investment Company Act of 1940. |
