Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
Filed by the Registrant []
Filed by a Party other than the Registrant [X]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY
(AS PERMITTED BY RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S)
240.14a-12
SELIGMAN QUALITY MUNICIPAL FUND, INC.
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(Name of Registrant as Specified In Its Charter)
BULLDOG INVESTORS GENERAL PARTNERSHIP AND KARPUS MGT.
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(Name of Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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PROXY STATEMENT OF BULLDOG INVESTORS GENERAL
PARTNERSHIP
AND KARPUS MANAGEMENT, INC., d/b/a KARPUS INVESTMENT
MANAGEMENT STOCKHOLDERS OF SELIGMAN QUALITY MUNICIPAL
FUND, INC., IN OPPOSITION TO THE SOLICITATION BY THE
BOARD OF DIRECTORS AT THE ANNUAL MEETING OF
SHAREHOLDERS (To be held on October 19, 2006)
Bulldog Investors General Partnership (?BIGP?) and
Karpus Management, Inc., d/b/a Karpus Investment
Management (?Karpus?), stockholders of Seligman
Quality Municipal Fund, Inc. (the ?Fund?), are
sending this proxy statement and the enclosed GREEN
proxy card to common and preferred stockholders of
record as of August 18, 2006 (the ?Record Date?) of
the Fund. We are soliciting a proxy to vote your
shares at one of two venues for the Annual Meeting of
Shareholders of the Fund (the ?Meeting?). Please
refer to the Fund?s proxy soliciting material for
additional information concerning the Meeting and the
matters to be considered by shareholders including
the election of directors. This proxy statement and
the enclosed GREEN proxy card are first being sent to
common stockholders of the Fund on or about September
25, 2006.
INTRODUCTION
There are two matters that the Fund has scheduled to
be voted upon at the Meeting: (1) to elect three
Directors; and (2) to ratify the selection of
Deloitte & Touche LLP as auditors of the Fund for
2006. In addition, we intend to submit a proposal to
shareholders (3) to open-end the Fund; (4) to ensure
a fair election; (5) to authorize us to bring a
lawsuit to invalidate certain actions taken by the
Board to thwart a shareholder vote; and (6) to
terminate the management agreement between the Fund
and J&W Seligman & Co. Incorporated.
We are soliciting a proxy to vote your shares FOR the
election of our nominees as director and FOR each of
the above proposals.
How Proxies Will Be Voted
If you wish to vote FOR the election of our nominees
and/or to vote on any of our proposals, you may do so
by completing and returning a GREEN proxy card to us
or to our agent. Unless you direct otherwise, your
shares will be voted at the Alternate Meeting
described below and FOR the election of our nominees,
FOR the ratification of Deloitte & Touche LLP as
auditors of the Fund for 2007 and FOR each of our
proposals. In addition, you will be granting the
proxy holder(s) discretionary authority to vote on
any other matters that may come before the Meeting
including matters relating to the conduct of the
Meeting.
Voting Requirements
The presence in person or by proxy of more than 50%
of the Fund?s outstanding shares shall constitute a
quorum. The Fund?s bylaws currently require that
each director must be elected by the affirmative vote
of the holders of a majority of the votes entitled to
be cast. (However, that provision and others will
likely be the basis of a legal challenge because they
were adopted to thwart shareholders from electing
directors of their choice.) Proposals 2, 3 and 4
each require the affirmative vote of a majority of
the votes cast for approval. Proposal 5 is advisory
and does not have any specific voting requirement.
Proposal 6 requires the lesser of the affirmative
vote of (1) 67% of the shares present at the Meeting
at which more than 50% of the shares are represented
or (2) more than 50% of the outstanding shares.
Abstentions will only have an impact on Proposal 6,
in which case they will be treated as votes against
it.
Revocation of Proxies
You may revoke any proxy prior to its exercise by:
(i) delivering a written revocation to us; (ii)
executing and delivering a later dated proxy; or
(iii) voting in person at the Meeting or the
Alternate Meeting described below. Attendance at the
Meeting or Alternate Meeting will not in and of
itself revoke a proxy. There is no limit on the
number of times you may revoke your proxy before it
is exercised. Only your latest dated proxy will be
counted.
ELECTION A: ALTERNATE MEETING
The Board has a fiduciary duty to conduct a fair and
democratic meeting. However, the Board has stated
that it will not permit shareholders to vote for our
nominees or on any proposals we attempt to make by
declaring them ?out of order.? Therefore, to allow
shareholders to fully exercise their franchise
rights, we will hold an Alternate Meeting at the same
time as the Board?s Meeting (the ?Sham Meeting?).
All shareholders will be able to fully participate at
the Alternate Meeting which will be held at 9:30 a.m.
on October 19, 2006 at the offices of Bulldog
Investors, Park 80 West - Plaza Two, Saddle Brook, NJ
07663. The bylaws do not specifically provide for
an Alternate Meeting to a Sham Meeting. However, we
are confident that a court will determine that we are
justified in holding an Alternate Meeting. When
faced with a similar abuse of power by the chair of a
meeting, one court declared:
The right of the majority . . . to control the action
of the meeting cannot be questioned. A presiding
officer cannot arbitrarily defeat the will of the
majority by refusing to entertain or put motions, by
wrongfully declaring the result of a vote, or by
refusing to permit the expression by the majority of
its will. He is the representative of the body over
which he presides. His will is not binding on it,
but its will, legally expressed by a majority of its
members, is binding.
Many courts have concluded that an action whose
primary purpose is to thwart a shareholder vote is
presumptively invalid. After the Meeting we intend
to seek a court order to (1) invalidate any such
actions taken by the Board and (2) have all proxies
counted as instructed whether presented at the
Alternate Meeting or the Sham Meeting. Among the
actions taken that we intend to challenge are: (1)
the adoption of various bylaws designed to thwart a
shareholder vote and (2) the Board?s determination to
declare our nominations and proposals ?out of order?
if presented at the Sham Meeting.
Election A permits you to have your shares
represented at the Alternate Meeting or the Sham
Meeting. Unless instructions to the contrary are
given, your proxy will be voted at the Alternate
Meeting. If you vote against Election A, we will
attempt to vote your shares at the Sham Meeting but,
in light of the Board?s determination to discount
them, your vote on the election of directors and on
Proposals 4, 5 and 6 might be wasted.
PROPOSAL 1: ELECTION OF DIRECTORS
At the Meeting, we intend to nominate the following
persons for election as directors. Each nominee has
consented to being named in this proxy statement and
to serve as a director if elected. Unless noted, all
of our nominees are independent and none personally
owns shares or has any arrangement or understanding
with any person with respect to any future employment
by the Fund or by any affiliate of the Fund. We do
not know of any material conflicts of interest that
would prevent any of them from acting in the best
interest of the Fund. Please refer to the Fund?s
proxy soliciting material for additional information
concerning the election of directors.
Phillip Goldstein (born 1945); 60 Heritage Drive,
Pleasantville, NY 10570 ? Mr. Goldstein is a self-
employed investment advisor and a principal of the
general partner of three investment partnerships in
the Bulldog Investors group of funds, Opportunity
Partners L.P., Opportunity Income Plus Fund L.P., and
Full Value Partners L.P. He has been a director of
the Mexico Income and Equity Fund since 2000,
Brantley Capital Corporation since 2001, the Emerging
Markets Telecommunications Fund since 2005 and the
First Israel Fund since 2005. Mr. Goldstein is a
principal of three limited partnerships that are
general partners of BIGP. Mr. Goldstein and his wife
jointly beneficially own 38,500 Shares which they
acquired between July 26, 2005 and July 13, 2006.
Gerald Hellerman (born 1937); 10965 Eight Bells Lane,
Columbia, MD 21044 ? Mr. Hellerman is the managing
director of Hellerman Associates, a financial and
corporate consulting firm. He has been a director of
the Mexico Income and Equity Fund since 2001,
Brantley Capital Corporation until 2006, MVC Capital,
Inc. since 2003 and Air Net Systems, Inc since 2005.
Andrew Dakos (born 1966); 5 Ryan Court, Towaco, NJ
07082 ? Mr. Dakos is President and CEO of Uvitek
Printing Ink, Inc., an ink and coating manufacturing
company; Managing Member of the general partner of
Full Value Partners L.P., and President of Elmhurst
Capital, Inc. an investment advisory firm. He has
been a director of the Mexico Income and Equity Fund
since 2001 and Brantley Capital Corporation until
2006. Mr. Dakos is a principal of three limited
partnerships that are general partners of BIGP.
PROPOSAL 2: RATIFICATION OF SELECTION OF AUDITORS
Unless instructions to the contrary are given, your
proxy will be voted to ratify the selection of
Deloitte & Touche LLP as auditors of the Fund for
2006.
PROPOSAL 3: THE SHAREHOLDERS REQUEST THAT THE BOARD
OF DIRECTORS SHALL PROMPTLY TAKE THE STEPS
NECESSARY TO OPEN-END THE FUND.
Open-ending the Fund will eliminate its persistent
discount from net asset value. Unless instructions
to the contrary are given, your proxy will be voted
in favor of this proposal. If adopted, this proposal
will not be binding on the board.
PROPOSAL 4: TO COMPLY WITH SECTIONS 18(I), 2(A)(42),
16(A), 1(B)(2), 1(B)(3) AND 36 OF THE INVESTMENT
COMPANY ACT OF 1940, EFFECTIVE AS OF 12:01 A.M. OF
THE DATE OF THE 2006 ANNUAL MEETING OF STOCKHOLDERS
AND NOTWITHSTANDING ANY PROVISION TO THE CONTRARY OF
THE FUND?S ARTICLES OF INCORPORATION OR ITS BYLAWS OR
OF MARYLAND LAW, (A) EVERY BENEFICIAL OR RECORD
STOCKHOLDER OF THE FUND ENTITLED TO ATTEND THE ANNUAL
MEETING SHALL BE ENTITLED TO NOMINATE FOR DIRECTOR
AND TO VOTE HIS OR HER SHARES FOR THE ELECTION OF ANY
PERSON OR PERSONS OF HIS OR HER CHOICE, (B) NO
DIRECTOR OR OFFICER OF THE FUND SHALL TAKE ANY ACTION
WHOSE PRIMARY PURPOSE IS TO IMPEDE OR FRUSTRATE ANY
STOCKHOLDER FROM NOMINATING OR VOTING HIS OR HER
SHARES FOR SUCH PERSONS AND (C) AT A MEETING AT WHICH
A QUORUM IS PRESENT, THE PERSONS RECEIVING THE MOST
VOTES SHALL BE DECLARED ELECTED AS DIRECTORS. ANY
ACTION BY ANY DIRECTOR OR OFFICER OF THE FUND TO
SUBVERT THE INTENT OF THIS PROPOSAL SHALL BE DEEMED
TO BE A BREACH OF FIDUCIARY DUTY UNDER SECTION 36 OF
THE INVESTMENT COMPANY ACT OF 1940 AND UNDER MARYLAND
LAW.
This proposal instructs the Board to hold a fair
Meeting. Unless instructions to the contrary are
given, your proxy will be voted in favor of this
proposal.
PROPOSAL 5: THE SHAREHOLDERS AUTHORIZE BIGP AND
KARPUS TO BRING A LAWSUIT TO INVALIDATE CERTAIN
ACTIONS TAKEN BY THE BOARD TO THWART A SHAREHOLDER
VOTE.
This proposal seeks to authorize us to bring a
lawsuit to invalidate actions taken by the Board to
prevent a fair Meeting. It is advisory only. Unless
instructions to the contrary are given, your proxy
will be voted in favor of this proposal.
PROPOSAL 6: THE MANAGEMENT AGREEMENT BETWEEN THE
FUND AND J&W SELIGMAN & CO. INCORPORATED SHALL BE
TERMINATED.
Seligman?s performance has been very poor and it
should be fired. Unless instructions to the contrary
are given, your proxy will be voted in favor of this
proposal.
THE SOLICITATION
Persons affiliated with or employed by BIGP or Karpus
or their affiliates may assist us in the solicitation
of proxies. Banks, brokerage houses and other
custodians, nominees and fiduciaries will be
requested to forward this proxy statement and the
enclosed GREEN proxy card to the beneficial owners of
common shares for whom they hold shares of record.
We will reimburse these organizations for their
reasonable out-of-pocket expenses.
Initially, we will bear all of the expenses related
to this proxy solicitation. Because we believe that
all shareholders will benefit from this solicitation,
we intend to seek reimbursement of our expenses from
the Fund. Shareholders will not be asked to vote on
the reimbursement of our solicitation expenses which
we estimate to be approximately $10,000. There is no
arrangement or understanding involving BIGP, Karpus
or any of our affiliates relating to future
employment by or any future transaction with the Fund
or any of its affiliates.
Other than as set forth in this Proxy Statement,
there are no contracts, arrangements, or
understandings entered into by any of the
participants in the solicitation or, to the
participants? knowledge, any of their respective
associates within the past year with any person with
respect to any of the Fund?s securities, including,
but not limited to, joint ventures, loan or option
arrangements, puts or calls, guarantees against loss
or guarantees of profit, division or losses or
profits, of the giving or withholding of proxies.
Except as set forth in the Proxy Statement, none of
the participants in the solicitation or, to the
participants? knowledge, any of their associates has
entered into any agreement or understanding with any
person with respect to: (i) any future employment by
the Fund or its affiliates; or (ii) any future
transactions to which the Fund or any of its
affiliates will or may be a party.
BIGP and Karpus are the soliciting stockholders. As
of September 19, 2006, BIGP beneficially owned
748,900 shares all of which have been purchased
within the past two years, and Karpus beneficially
owned 684,366 shares of the Fund some of which have
been purchased since December 1999. As noted below,
three of our nominees are affiliated with BIGP.
September 25, 2006
The BIGP ? Karpus Group, Park 80 West - Plaza Two,
Saddle Brook, NJ 07663
(201) 556-0092 // Fax: (201)556-
0097//pgoldstein@bulldoginvesors.com
September 25, 2006
Dear Fellow Shareholder of Seligman Quality Municipal
Fund:
The BIGP ? Karpus Group owns more than 30% of the
shares of Seligman Quality Municipal Fund and is its
largest shareholder. We are writing to you because
we are dissatisfied with the Fund?s performance and
its persistent discount to net asset value (?NAV?).
We are also appalled by the lack of oversight by the
Board of Directors and its failure to do anything to
improve the Fund?s performance or narrow the
discount. In short, we believe it is time for a
change at the top.
SELIGMAN?S ABYSMAL PERFORMANCE
The Fund?s objective is to provide a high level of
current income exempt from Federal income taxes
consistent with the preservation of capital and with
consideration given to opportunities for capital
gain. By any measure, that objective has not been
met. In fact, in November 2005, the Board of
Directors found a ?pronounced lag? in the Fund?s
performance compared to its peers ?over the one-,
three-, five- and ten-year periods, and over
annualized rolling three- and five-year periods ended
September 30, 2005, for each calendar year in the
2000-to-2004 period and for the first nine months of
2005, and compared to a group of ten competitor funds
selected by the Manager over annualized rolling
three- and five-year periods ended September 30,
2005, for each calendar year in the 2000-to-2004
period, and for the first nine months of 2005.?
Even that dismal assessment understates how badly J &
W Seligman & Co., the Fund?s manager has performed.
On a scale of 1 (best) to 100 (worst), Lipper rated
the Fund?s NAV performance at a rock bottom 100 over
the five-year period ending August 31, 2006. In
other words, over the last five years, virtually
every other insured leveraged national municipal fund
has outperformed the Fund. Its short term
performance is also abysmal. For the year ending
August 31, 2006, 93% of its peers outperformed the
Fund. Finally, if you are a long-term shareholder,
we sympathize with you. For the ten-year period
ending August 31, 2006, 84% of its peers outperformed
the Fund.
Now, let?s look at the Fund?s yield. Of more than
100 closed-end national municipal funds, only one has
a lower yield. Since its inception in 1991, the
Fund?s monthly dividend has gone from 7.8 cents to
the current 4.1 cents. Over the past three years,
the monthly dividend has been cut six times. Before
those cuts began, the dividend was 60% higher than it
is today.
Even though the Board found that the Fund?s
performance was ?below average for all periods
considered,? it inexplicably renewed Seligman?s
contract. Here is the Board?s reasoning in its own
words:
The Manager pointed out that the Fund?s comparative
performance in recent periods had been adversely
affected by the Manager?s decision to defensively
position the portfolio in anticipation of rising
interest rates, which did not rise as quickly as the
Manager anticipated. The Manager also stated that the
Fund?s somewhat high expense ratio also adversely
affected its comparative performance. Taking into
account these comparisons and the other factors
considered, the directors were satisfied with the
Manager?s explanation of the Fund?s pronounced lag in
performance and retained confidence in the Manager?s
ability to manage the Fund.
Well, there you have it. The Board uncritically
accepted Seligman?s explanation for the Fund?s
?pronounced lag in performance.? It was a result of
Seligman?s poor judgment and the Fund?s high
expenses. Wouldn?t you like to work for such an
understanding boss? If our directors served on a
school board, they would probably allow a school bus
driver five or ten DUI?s before they lost confidence
in his ability to do his job. All joking aside, how
can shareholders have confidence in directors that
are so tolerant of the manager?s incompetence?
In light of the Fund?s long term underperformance, it
is not surprising that its stock has traded at a
discount to NAV for a long time. By mid-2005, the
discount climbed to more than 14%. That attracted
our attention and we began to aggressively accumulate
shares. On September 19, 2005, we wrote a letter to
the Board to advise it that we would submit a
proposal at the next annual meeting to open-end the
Fund and unless the Board agreed to abide by the will
of the shareholders, seek to elect directors that
would do just that. We believed long suffering
shareholders deserved an opportunity to exit the Fund
at full NAV.
?LET?S RIG THE ELECTION?
The market responded positively to our open-ending
proposal and the discount soon moved back to single
digits. The Board, on the other hand, responded
defensively. First, it flatly refused to abide by a
shareholder vote on open-ending. Then, it adopted a
new set of bylaws whose primary purpose was to make
it more difficult for shareholders to elect directors
of their choice. For example, it changed the
standard for electing directors from a plurality of
the votes cast to a majority of the Fund?s
outstanding shares, knowing that it is virtually
impossible for any nominee to get that many votes in
a contested election. Another bylaw required
shareholders to jump through burdensome and
unnecessary hoops just to exercise their basic right
to nominate directors or present proposals at a
shareholder meeting.
On November 22, 2005, we notified the Board in
writing of our intent to nominate directors and to
submit a ?fair election? proposal. In our letter, we
specifically asked the Board to ?notify us as soon as
possible if you . . . believe this advance notice is
deficient in any manner so that we can promptly cure
any such deficiency.? The Board never responded so
we reasonably assumed it was satisfied with our
notification. In any event, although the Fund
ordinarily holds its annual meeting in May, this year
it delayed the meeting until October 19th. Thus, the
Board has had almost eleven months to prepare for a
contested election.
The Board acknowledges that it ?has received three
communications indicating that certain dissident
Stockholders intend to solicit proxies . . . in favor
of their own nominees for election to the Board.?
Despite this, the Board says it will not permit
shareholders to vote for our nominees ?because such
communications did not comply with the requirements
of the Fund's Bylaws? and that ?any such purported
nominations will be ruled out of order in the event
they are made at the Meeting, as will certain
purported proposals by the same persons that likewise
failed to comply with the requirements of the Fund?s
Bylaws.? That is legalese meaning that no matter how
much support our nominees receive from shareholders,
they cannot be elected.
Why is the Board trying to hold a rigged election?
Brian Zino, a director of the Fund and a principal of
Seligman, told us the real reason a few months ago:
?We can do the math.? In other words, he
acknowledged that we owned enough shares to insure
that our nominees would be elected in a fair
election.
Faced with that unpleasant reality, the only way
Seligman could keep its friends on the Board was to
rig the election. That is why the Board says that if
we try to propose nominees, the Chair will declare
them ?out of order.? Consequently, we will not vote
our shares (and yours, if you so instruct us) at the
Board?s Sham Meeting and subject to a shareholder
vote we will file a legal challenge to invalidate the
board?s actions. We will also hold an Alternate
Meeting at the same time as the Board?s Sham Meeting.
All shareholders will be able to fully participate at
the Alternate Meeting which will be held at 9:30 a.m.
on October 19, 2006 at the offices of Bulldog
Investors, Park 80 West - Plaza Two, Saddle Brook, NJ
07663. The Fund?s bylaws do not specifically
provide for an Alternate Meeting when the Board
indicates that the annual meeting will be a Sham
Meeting. However, we believe that under the
circumstances we are justified in holding an
Alternate Meeting.
To add insult to injury, based on the Board?s proxy
statement, the cost of holding the Sham Meeting
including proxy solicitation and legal fees will
probably be more than $100,000 vs. the $10,000 or so
we will spend to hold the Alternate Meeting. And,
even though Seligman and the directors are the only
beneficiaries of the Sham Meeting, Seligman won?t
have to pay a dime. It convinced the Board to send
the bill for the entire cost of the Sham Meeting to
the shareholders.
SELIGMAN?S ETHICAL LAPSES
Ethical lapses are nothing new for Seligman. It is
still dealing with charges by both the SEC and the
New York State Attorney General that it fraudulently
entered into secret arrangements with certain
customers to allow them to trade in and out of its
open-end funds in order to generate more fees for
Seligman. According to New York State Attorney
General, these arrangements cost long-term
shareholders of Seligman?s funds more than $80
million. An affidavit submitted by the Attorney
General also stated that the boards of directors of
the Seligman group of funds ?are subservient to
Seligman? and that the high expense ratios of
Seligman?s funds, which the Board cited as a
mitigating factor in excusing the Fund?s severe
underperformance, ?are the result of the Boards?
failure to negotiate at arms? length with Seligman.?
But, don?t take our word for it. You can read all
the sordid details yourself on the Attorney General?s
website (including some shocking emails incriminating
Seligman executives including Mr. Zino).
(http://www.oag.state.ny.us/press/2005/sep/sep29a_05.
html). The AG?s announcement is titled: ?Secret
Mutual Fund Timing Arrangements Exposed At Seligman:
Tops Execs Approved at Least a Dozen Deals that
Skimmed Millions from Investors?
Apparently, Seligman has not learned its lesson. Its
heavy-handed and illegal threat to declare our
nominations ?out of order? is just the latest example
of its willingness to place its own interest ahead of
the interest of shareholders. The truth is that
Seligman opposes open-ending for only one reason.
Open-ending would allow shareholders that are fed up
with miserable long and short-term performance and an
ethically challenged manager to exit at NAV. That
would reduce Seligman?s fees which it needs to defend
itself from the SEC and Attorney General Spitzer.
Seligman acknowledges that ?these matters and any
related publicity [could] result in reduced demand
for shares of Seligman Funds or other adverse
consequences.? In a nutshell, it is clear that the
Fund is being run not for shareholders but to
generate fees for Seligman.
We think Seligman?s contract deserves to be
terminated and the Fund should be open-ended. Our
goal is to gain control of the board and then to
maximize shareholder value by allowing shareholders
to cash out of their investment at full NAV. Based
on the Fund?s current market price, eliminating the
discount would amount to an increase of about $1 per
share. If you would like to get that $1 per share,
don?t expect Seligman to do anything about it. As
Tom Herzfeld, a prominent closed-end fund expert
recently said: ?I always had the feeling [Seligman]
didn?t care about the discount.?
Finally, if elected, our nominees will propose that
the Fund authorize an investigation into the conduct
of Seligman, the Fund?s directors, and its lawyers to
determine if they should be sued for breach of
fiduciary duty, diverting Fund assets for their own
benefit, collecting illegal management fees and abuse
of control. Any monies collected as a result of such
a lawsuit will increase the Fund?s NAV and benefit
shareholders.
If you care about your investment in the Fund and
want to eliminate the discount and fire our ethically
challenged and incompetent manager, please vote your
proxy online at WWW.PROXYVOTE.COM or by telephone at
1-800-454-8683. Alternatively, you can mail the
GREEN proxy card in the enclosed envelope but please
do it today so we can rid the Fund of all three evils
- -- the discount, the Board of Directors and
Seligman!the
Very truly yours,
Phillip Goldstein, Bulldog Investors G.P
Sharon Thornton, Karpus Investment Management
PROXY CARD
Proxy Solicited in Opposition to the Board of
Directors of Seligman Quality Municipal Fund, Inc.
(the ?Fund?) by Bulldog Investors General Partnership
(?BIGP?) and Karpus Management, Inc. (?Karpus?) for
the 2006 Annual Meeting of Shareholders at the
Selected Venue
The undersigned hereby appoints Phillip Goldstein,
Rajeev Das, Andrew Dakos, and Sharon Thornton and
each of them, as the undersigned?s proxies, with full
power of substitution, to attend either the Annual
Meeting of Shareholders or Alternate Meeting of
Seligman Quality Municipal Fund, Inc. and any
adjourned or postponed Meeting, and to vote on all
matters that come before either meeting the number of
shares that the undersigned would be entitled to vote
if present in person, as specified below.
(INSTRUCTIONS: Mark votes by placing an ?x? in the
appropriate [ ].)
ELECTION A. TO ATTEND THE ALTERNATE ANNUAL MEETING
FOR [ ] AGAINST [ ]
1. ELECTION OF THREE DIRECTORS
[ ] FOR GERALD HELLERMAN [ ] WITHHOLD
AUTHORITY
[ ] FOR PHILLIP GOLDSTEIN [ ] WITHHOLD
AUTHORITY
[ ] FOR ANDREW DAKOS [ ] WITHHOLD
AUTHORITY
2: RATIFICATION OF THE SELECTION OF DELOITTE &
TOUCHE LLP AS AUDITORS OF THE FUND FOR 2006.
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
3. THE SHAREHOLDERS REQUEST THAT THE BOARD OF
DIRECTORS SHALL PROMPTLY TAKE THE STEPS NECESSARY TO
OPEN-END THE FUND.
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
4. TO COMPLY WITH SECTIONS 18(I), 2(A)(42), 16(A),
1(B)(2), 1(B)(3) AND 36 OF THE INVESTMENT COMPANY
ACT OF 1940, EFFECTIVE AS OF 12:01 A.M. OF THE DATE
OF THE 2006 ANNUAL MEETING OF STOCKHOLDERS AND
NOTWITHSTANDING ANY PROVISION TO THE CONTRARY OF THE
FUND?S ARTICLES OF INCORPORATION OR ITS BYLAWS OR OF
MARYLAND LAW, (A) EVERY BENEFICIAL OR RECORD
STOCKHOLDER OF THE FUND ENTITLED TO ATTEND THE ANNUAL
MEETING SHALL BE ENTITLED TO NOMINATE FOR DIRECTOR
AND TO VOTE HIS OR HER SHARES FOR THE ELECTION OF ANY
PERSON OR PERSONS OF HIS OR HER CHOICE, (B) NO
DIRECTOR OR OFFICER OF THE FUND SHALL TAKE ANY ACTION
WHOSE PRIMARY PURPOSE IS TO IMPEDE OR FRUSTRATE ANY
STOCKHOLDER FROM NOMINATING OR VOTING HIS OR HER
SHARES FOR SUCH PERSONS AND (C) AT A MEETING AT WHICH
A QUORUM IS PRESENT, THE PERSONS RECEIVING THE MOST
VOTES SHALL BE DECLARED ELECTED AS DIRECTORS. ANY
ACTION BY ANY DIRECTOR OR OFFICER OF THE FUND TO
SUBVERT THE INTENT OF THIS PROPOSAL SHALL BE DEEMED
TO BE A BREACH OF FIDUCIARY DUTY UNDER SECTION 36 OF
THE INVESTMENT COMPANY ACT OF 1940 AND UNDER MARYLAND
LAW.
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
5: THE SHAREHOLDERS AUTHORIZE BIGP AND KARPUS TO
BRING A LAWSUIT TO INVALIDATE CERTAIN ACTIONS TAKEN
BY THE BOARD TO THWART A SHAREHOLDER VOTE.
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
6: THE MANAGEMENT AGREEMENT BETWEEN THE FUND AND J&W
SELIGMAN & CO. INCORPORATED SHALL BE TERMINATED.
FOR [ ] AGAINST [ ]
ABSTAIN [ ]
Please sign and date below. Your shares will be
voted as directed. If no direction is made, this
proxy will be voted FOR the election of the nominees
named above in Election A and FOR Proposals 2, 3, 4,
5 and 6. The undersigned hereby acknowledges receipt
of the proxy statement dated September 25, 2006 of
BIGP and Karpus and revokes any proxy previously
executed.
Signature(s)___________________________________
Dated: _______________
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