DEF 14A 1 ddef14a.txt SELIGMAN QUALITY MUNI FUND SCHEDULE 14A Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934 (Amendment No. ) Filed by the Registrant [X] Filed by a Party other than the Registrant [_] 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. -------------------------------------------------------------------------------- (Name of Registrant as Specified In Its Charter) [INSERT NAME] -------------------------------------------------------------------------------- (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. (1) Title of each class of securities to which transaction applies: ------------------------------------------------------------------------- (2) Aggregate number of securities to which transaction applies: ------------------------------------------------------------------------- (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): ------------------------------------------------------------------------- (4) Proposed maximum aggregate value of transaction: ------------------------------------------------------------------------- (5) Total fee paid: ------------------------------------------------------------------------- [_] Fee paid previously with preliminary materials. [_] Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. (1) Amount Previously Paid: ------------------------------------------------------------------------- (2) Form, Schedule or Registration Statement No.: ------------------------------------------------------------------------- (3) Filing Party: ------------------------------------------------------------------------- (4) Date Filed: ------------------------------------------------------------------------- Seligman Quality Municipal Fund, Inc. 100 Park Avenue, New York, New York 10017 New York City Telephone (212) 850-1864 Toll-Free Telephone (800) 221-2450 Notice of Annual Meeting of Stockholders to be held on May 8, 2003 To the Stockholders: The eleventh Annual Meeting of Stockholders (the "Meeting") of Seligman Quality Municipal Fund, Inc., a Maryland corporation (the "Corporation"), will be held at the offices of the Corporation, 100 Park Avenue, New York, New York 10017 on May 8, 2003 at 10:00 A.M., for the following purposes: (1) To elect four Directors; (2) To act on a proposal to ratify the selection of Deloitte & Touche LLP as auditors of the Corporation for 2003; and (3) To transact any other business that may lawfully come before the Meeting or any adjournment thereof; all as set forth in the Proxy Statement accompanying this Notice. The close of business on March 20, 2003 has been fixed as the record date for the determination of Stockholders entitled to notice of, and to vote at, the Meeting or any adjournment thereof. By order of the Board of Directors, /s/ Frank J Nasta Secretary Dated: New York, New York, April 8, 2003 ----------------- YOUR VOTE IS IMPORTANT NO MATTER HOW MANY SHARES YOU OWN Please indicate your voting instructions on the enclosed Proxy Card, date and sign it, and return it in the envelope provided, which is addressed for your convenience and needs no postage if mailed in the United States. In order to avoid the additional expense of further solicitation, we ask your cooperation in mailing your Proxy promptly. A Proxy will not be required for admission to the Meeting. April 8, 2003 Seligman Quality Municipal Fund, Inc. 100 Park Avenue, New York, New York 10017 PROXY STATEMENT for the Annual Meeting of Stockholders to be held on May 8, 2003 This Proxy Statement is furnished to you in connection with the solicitation of Proxies by the Board of Directors of Seligman Quality Municipal Fund, Inc. (the "Corporation") to be used at the eleventh Annual Meeting of Stockholders (the "Meeting") to be held in New York, New York on May 8, 2003. It is expected that the Notice of Annual Meeting, Proxy Statement and form of Proxy will first be mailed to Stockholders on or about April 11, 2003. If the accompanying form of Proxy is executed properly and returned, shares represented by it will be voted at the Meeting. If you give instructions, your shares will be voted in accordance with your instructions. If you return your signed Proxy without instructions, your shares will be voted (i) for the election of four Directors, (ii) for the ratification of the selection of auditors, and (iii) at the discretion of the Proxy holders, on any other matter which may properly have come before the Meeting or any adjournment thereof. You may revoke your Proxy or change it by written notice to the Corporation (Attention: Secretary) or by notice at the Meeting at any time prior to the time it is voted. The close of business on March 20, 2003 has been fixed as the record date for the determination of Stockholders entitled to notice of, and to vote at, the Meeting or any adjournment thereof. On that date, the Corporation had outstanding 672 shares of municipal auction rate cumulative preferred stock, series TH (the "Preferred Shares"), and 4,756,090 shares of common stock, par value $0.01 per share (the "Common Shares"), each such Preferred Share and Common Share outstanding on the record date being entitled to one vote. For all matters to be voted upon, an abstention or broker non-vote will not be considered a vote cast. In the event that a quorum is not represented at the Meeting or, even if a quorum is so represented, in the event that sufficient votes in favor of any management proposal are not received by May 8, 2003, the persons named as Proxies may propose and vote for one or more adjournments of the Meeting if a quorum is not represented or, if a quorum is so represented, only with respect to 1 such management proposal, with no notice other than an announcement at the Meeting, and further solicitation may be made. Shares represented by Proxies indicating a vote against a management proposal will be voted against adjournment in respect of that proposal. The Corporation's manager is J. & W. Seligman & Co. Incorporated (the "Manager"). The Corporation's stockholder service agent is Seligman Data Corp. The address of each of these entities is 100 Park Avenue, New York, NY 10017. The Corporation will furnish, without charge, a copy of its most recent annual report to any Stockholder upon request to Seligman Data Corp. at 1-800-221-2450. If you have elected to receive one Proxy Statement for all accounts maintained by members of your household, the Corporation undertakes to deliver promptly upon written or oral request a separate copy of the Proxy Statement for a separate account. A. Election of Directors (Proposal 1) The Board of Directors is presently comprised of twelve Directors. The Board is divided into three classes, and the members of each class hold office for a term of three years unless elected in the interim. The term of one class expires in each year. At the Meeting this year, four directors are to be elected. General John R. Galvin and Messrs. William C. Morris and Robert L. Shafer, each of whose term will expire at the 2003 Annual Meeting, and Mr. Robert B. Catell, replacing Mr. James Q. Riordan, who having reached the age of 75, is retiring pursuant to Board policy at the 2003 Annual Meeting, have been recommended by the Director Nominating Committee of the Board of Directors of the Corporation for election to the class whose term will expire in 2006. General Galvin and Messrs. Catell, Morris and Shafer have been nominated for election by the holders of the Common Shares and Preferred Shares, voting together as a single class. (General Galvin and Messrs. Catell, Morris and Shafer are designated as both Common and Preferred Directors.). It is the intention of the persons named in the accompanying form of Proxy to nominate and to vote such Proxy on behalf of the holders of Common Shares and Preferred Shares for the election of General Galvin and Messrs. Catell, Morris and Shafer. General Galvin has been a Director of the Corporation since 1995, Mr. Morris has been a Director and Chairman of the Corporation since 2 1990, and Mr. Shafer has been a Director of the Corporation since 1991. General Galvin and Messrs. Morris and Shafer were last elected by Stockholders at the 2000 Annual Meeting. Each nominee has agreed to serve if elected. There is no reason to believe that any of the nominees will become unavailable for election as a Director of the Corporation, but if that should occur before the Meeting, Proxies will be voted for the persons the Board of Directors recommends. Background information regarding General Galvin and Messrs. Catell, Morris and Shafer, as well as the other Directors of the Corporation, follows. 3 INFORMATION REGARDING NOMINEES FOR ELECTION BY HOLDERS OF BOTH PREFERRED SHARES AND COMMON SHARES
Term of Number of Office if Portfolios in Elected and Fund Length of Complex to Name (Age) and Time Principal Occupation(s) During Past 5 Years, be Overseen Position With Corporation* Served Directorships and Other Information by Nominee -------------------------- ------------ ------------------------------------------------------------------------- ------------- Independent Director Nominees Robert B. Catell (66) 2003-2006 Chairman and Chief Executive Officer of KeySpan Corporation, 60++ Director Nominee Brooklyn, NY (a diversified energy and electric company). Mr. Catell is also a Director or Trustee of Alberta Northeast Gas, Ltd. and Boundary [PHOTO] Gas Inc., Taylor Gas Liquids, Ltd., The Houston Exploration Company (oil and gas exploration, development and production), Edison Electric Institute, New York State Energy Research and Development Authority, Independence Community Bank, Business Council of New York State, Inc., New York City Partnership (business and civic organization) and the Long Island Association (business and civic organization). John R. Galvin (73) 2003-2006, Dean Emeritus, Fletcher School of Law and Diplomacy at Tufts 61 Director 1995 to Date University, Medford, MA. General Galvin is a Director or Trustee of each of the investment companies of the Seligman Group of Funds+. He [PHOTO] is also Chairman Emeritus, American Council on Germany. He was formerly a Director of USLIFE Corporation (life insurance) and Raytheon Co. (defense and commercial electronics); Governor of the Center for Creative Leadership; 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, General Galvin was the Supreme Allied Commander, Europe and the Commander-in-Chief, United States European Command.
4 INFORMATION REGARDING NOMINEES FOR ELECTION BY HOLDERS OF BOTH PREFERRED SHARES AND COMMON SHARES
Term of Number of Office if Portfolios in Elected and Fund Length of Complex to Name (Age) and Time Principal Occupation(s) During Past 5 Years, be Overseen Position With Corporation* Served Directorships and Other Information by Nominee -------------------------- ------------ -------------------------------------------------------------------------- ------------- Independent Director Nominee Robert L. Shafer (70) 2003-2006; Retired Vice President, Pfizer Inc., New York, NY (pharmaceuticals). 61 Director 1991 to Date Mr. Shafer is a Director or Trustee of each of the investment companies of the Seligman Group of Funds+. He was formerly a Director of USLIFE [PHOTO] Corporation (life insurance). Interested Director Nominee William C. Morris** (64) 2003-2006; Chairman, J. & W. Seligman & Co. Incorporated, New York, NY. 61 Director and Chairman 1990 to Date Mr. Morris is Chairman of the Board and Director or Trustee of each of of the Board the investment companies of the Seligman Group of Funds+; Chairman of Seligman Advisors, Inc., Seligman Services, Inc. (broker-dealer), and [PHOTO] Carbo Ceramics Inc. (manufacturer of ceramic proppants for oil and gas industry) and a Director of Seligman Data Corp. He was formerly a Director of Kerr-McGee Corporation (a diversified energy company) and Chief Executive Officer of each of the investment companies of the Seligman Group of Funds.
5 Other Directors The other Directors of the Corporation whose terms will not expire in 2003 are:
Number of Term of Portfolios in Office Fund and Length Complex Name (Age) and of Time Principal Occupation(s) During Past 5 Years, Overseen by Position With Corporation* Served Directorships and Other Information Director -------------------------- ------------ ------------------------------------------------------------------------ ------------- Independent Directors Alice S. Ilchman (67) 2001-2004; President Emeritus, Sarah Lawrence College, Bronxville, NY. Dr. 61 Director 1991 to Date Ilchman is a Director or Trustee of each of the investment companies of the Seligman Group of Funds.+ She is also Director of the Jeannette K. Watson Fellowship; a Trustee of The Committee for Economic Development; and a Director of the Public Broadcasting Service (PBS); and Court of Governors, London School of Economics. She was formerly the Chairman of The Rockefeller Foundation (charitable foundation); a Trustee of The Markle Foundation (philanthropic organization); and a Director of the International Research and Exchange Board (intellectual exchanges) and New York Telephone Company. Frank A. McPherson (69) 2001-2004; Retired Chairman of the Board and Chief Executive Officer of 61 Director 1995 to Date Kerr-McGee Corporation, Oklahoma City, OK (a diversified energy company). Mr. McPherson is a Director or Trustee of each of the investment companies of the Seligman Group of Funds.+ He is also a Director of ConocoPhillips (integrated international oil corporation), Integris Health, (owner of various hospitals), BOK Financial (bank holding company), 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. He was formerly a Director of Kimberly-Clark Corporation (consumer products) and the Federal Reserve System's Kansas City Reserve Bank.
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Number of Term of Portfolios in Office Fund and Length Complex Name (Age) and of Time Principal Occupation(s) During Past 5 Years, Overseen by Position With Corporation* Served Directorships and Other Information Director -------------------------- ---------- -------------------------------------------------------------------------- ------------- John E. Merow (73) 2002-2005; Retired Chairman and Senior Partner, Sullivan & Cromwell LLP, 61 Director 1991 to New York, NY (law firm). Mr. Merow is a Director or Trustee of each Date of the investment companies of the Seligman Group of Funds+. He is also a Director of Commonwealth Industries, Inc. (manufacturer of aluminum sheet products); Director and Treasurer of the Foreign Policy Association; Director Emeritus of the Municipal Art Society of New York; Trustee and Secretary of the U.S. Council for International Business; a Trustee of the New York-Presbyterian Hospital; Trustee and Vice Chairman of the New York-Presbyterian Healthcare System, Inc. and a member of the American Law Institute and Council on Foreign Relations. Betsy S. Michel (60) 2002-2005; Attorney, Gladstone, NJ. Ms. Michel is a Director or Trustee of each of 61 Director 1991 to the investment companies of the Seligman Group of Funds+. She is also a Date Trustee of The Geraldine R. Dodge Foundation (charitable foundation) and World Learning, Inc. (international education and training). She was formerly Chairman of the Board of Trustees of St. George's School (Newport, RI). Leroy C. Richie (61) 2001-2004; Chairman and Chief Executive Officer, Q Standards Worldwide, Inc., 60 Director 2000 to Birmingham, MI (library of technical standards). Mr. Richie is a Date Director or Trustee of each of the investment companies of the Seligman Group of Funds,+ with the exception of Seligman Cash Management Fund, Inc. He is also a Director of Kerr-McGee Corporation (a diversified energy company) and Infinity, Inc. (oil and gas services and exploration); and Director and Chairman of Highland Park Michigan Economic Development Corp. He was formerly a Trustee of New York University Law Center Foundation; Vice Chairman of the Detroit Medical Center; Chairman and Chief Executive Officer of Capital Coating Technologies, Inc. (applied coating technologies); and Vice President and General Counsel, Automotive Legal Affairs, of Chrysler Corporation.
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Number of Term of Portfolios in Office Fund and Length Complex Name (Age) and of Time Principal Occupation(s) During Past 5 Years, Overseen by Position With Corporation* Served Directorships and Other Information Director -------------------------- ------------ ----------------------------------------------------------------------- ------------- James N. Whitson (68) 2002-2005 Retired Executive Vice President and Chief Operating Officer of 61 Director 1993 to Date Sammons Enterprises, Inc., Dallas, TX (diversified holding company). Mr. Whitson is a Director or Trustee of each of the investment companies of the Seligman Group of Fund+. He is also a Director of C-Span (cable television networks) and CommScope, inc. (manufacturer of coaxial cable). Mr. Whitson was formerly a director and consultant of Sammons Enterprises, Inc. Interested Directors Paul C. Guidone** (45) 2002-2005; Managing Director and Chief Investment Officer, J. & W. Seligman 60 Director 2002 to Date & Co. Incorporated, New York, NY. Mr. Guidone is a Director or Trustee of each of the investment companies of the Seligman Group of Funds+, with the exception of Seligman Cash Management Fund, Inc.; He is also Member of the Association of Investment Management and Research, the New York Society of Security Analysts and the London Society of Investment Professionals. He was formerly Deputy Chairman and Group Chief Executive Officer of HSBC Asset Management and, prior to that, Managing Director and Chief Investment Officer of Prudential Diversified Investments. Brian T. Zino**(50) 2001-2004; Director and President, J. & W. Seligman & Co. Incorporated, New 61 Director, President and 1993 to Date York, NY. Mr. Zino is President, Chief Executive Officer and Director Chief Executive Officer or Trustee of each of the investment companies of the Seligman Group of Funds+. He is also a Director of Seligman Advisors, Inc. and Seligman Services, Inc. (broker-dealer); Chairman, Seligman Data Corp.; Member of the Board of Governors of the Investment Company Institute; and Vice Chairman, ICI Mutual Insurance Company.
----------------- + The Seligman Group of Funds consists of twenty-three registered investment companies, including the Corporation. ++ It is anticipated that by May 15, 2003, Mr. Catell will be appointed or elected to serve as a Director or Trustee of each of the investment companies of the Seligman Group of Funds, with the exception of Seligman Cash Management Fund, Inc. * The address for each Director or Nominee is 100 Park Avenue, New York, New York 10017. ** Mr. Guidone, Mr. Morris and Mr. Zino are considered "interested persons" of the Corporation, as defined in the Investment Company Act of 1940, as amended ("1940 Act"), by virtue of their positions with the Manager and its affiliates. 8 Beneficial Ownership of Shares of the Corporation and Funds of Complex As of February 28, 2003, the Directors (or Nominees) beneficially owned shares of the Corporation and the investment companies of the Seligman Group of Funds as follows:
Dollar Range of Common Aggregate Dollar Range of Shares Owned Shares Owned by Director in All Funds Overseen or to be Overseen Name of Director (or Nominee) or Nominee of the Corporation by Nominee in Seligman Group ----------------------------- ----------------------------- --------------------------------------- Independent Directors/Nominees Robert B. Catell $1-$10,000 $10,001-$50,000 John R. Galvin $1-$10,000 $10,001-$50,000 Alice S. Ilchman $1-$10,000 Over $100,000 Frank A. McPherson $1-$10,000 Over $100,000 John E. Merow $10,001-$50,000 Over $100,000 Betsy S. Michel $1-$10,000 Over $100,000 Leroy C. Richie $1-$10,000 $10,001-$100,000 Robert L. Shafer $1-$10,000 Over $100,000 James N. Whitson $10,001-$50,000 Over $100,000 Interested Directors/Nominees Paul C. Guidone $50,001-$100,000 Over $100,000 William C. Morris $10,001-$50,000 Over $100,000 Brian T. Zino $10,001-$50,000 Over $100,000
As of February 28, 2003, all Directors and officers of the Corporation as a group owned beneficially less than 1% of the Corporation's Common Shares. 9 As of February 28, 2003, no person was known by the Corporation to beneficially own more than 5% of the Corporation's Common Shares except as set forth in the table below.
Number of Common Shares Name and Address of Owner Beneficially Owned Percent of Class ------------------------- ----------------------- ---------------- Karpus Management, Inc.* 368,925 7.82% d/b/a Karpus Investment Management 183 Sullys Trail Pittsford, NY 14534
----------------- * Information as to beneficial ownership is based upon a Schedule 13D report filed with the Securities and Exchange Commission on March 7, 2003. Section 16(a) Beneficial Ownership Reporting Compliance The Manager, on behalf of Mr. Guidone, failed to file on a timely basis one Form 4 with respect to two transactions. Board Committees The Board of Directors met seven times during the fiscal year ended October 31, 2002. The standing committees of the Board include the Board Operations Committee, Audit Committee and Director Nominating Committee. These Committees are comprised solely of Directors who are not "interested persons" of the Corporation as that term is defined in the 1940 Act. The duties of these Committees are described below. Board Operations Committee. This Committee has authority generally to direct the operations of the Board, including the nomination of members of other Board Committees, and the selection of legal counsel for the Corporation. The Committee met four times during the fiscal year ended October 31, 2002. Members of the Committee are Messrs. McPherson (Chairman), Galvin, Merow, Richie, Riordan, Shafer and Whitson, Dr. Ilchman, and Ms. Michel. As a result of Mr. Riordan's retirement at the 2003 Annual Meeting, he will no longer serve as a Committee member following this Meeting. Audit Committee. This Committee assists the Board in its oversight of the Corporation's financial reporting process and operates pursuant to a written charter most recently amended on March 15, 2001. The Committee met four times during the fiscal year ended October 31, 2002. Members of this Committee are Messrs. Whitson (Chairman), Galvin, Merow and Richie, and Ms. Michel. The report of the Audit Committee, as approved on March 20, 2003, is attached to this Proxy Statement as Appendix 1. 10 Director Nominating Committee. This Committee recommends to the Board persons to be nominated for election as Directors by the Stockholders and selects and proposes nominees for election by the Board between Annual Meetings. The Committee will consider suggestions from Stockholders submitted in writing to the Secretary of the Corporation. The Committee met twice during the fiscal year ended October 31, 2002. Members of this Committee are Messrs. Shafer (Chairman), McPherson, Riordan and Dr. Ilchman. As a result of Mr. Riordan's retirement at the 2003 Annual Meeting, he will no longer serve as a Committee member following this Meeting. Executive Officers of the Corporation Information with respect to Executive Officers, other than Messrs Morris and Zino, is as follows:
Name (Age) and Position Term of Office and With the Corporation Length of Time Served* Principal Occupation During Past Five Years ------------------------------------------------------------------------------------------------ Thomas G. Moles (60) EVP: 2002 to Date Mr. Moles is a Director and Managing Director Executive Vice President Portfolio Mgr.: of the Manager. He is also Executive Vice and Portfolio Manager 1990 to Date President and Portfolio Manager of Seligman Select Municipal Fund, Inc. and Vice President and Portfolio Manager of four of the open-end investment companies of the Seligman Group of Funds. He is also a Director of Seligman Advisors, Inc. and Seligman Services, Inc. He was formerly President of the Corporation and Seligman Select Municipal Fund Inc. Eileen A. Comerford (45) 1990 to Date Ms. Comerford is a Senior Vice President, Vice President and Investment Officer of the Manager. She is also Assistant Portfolio Vice President and Assistant Portfolio Manager Manager of Seligman Select Municipal Fund, Inc. and Assistant Portfolio Manager of four of the open- end investment companies of the Seligman Group of Funds. Audrey G. Kuchtyak (43) 1990 to Date Ms. Kuchtyak is a Senior Vice President, Vice President Investment Officer of the Manager. She is also Vice President of Seligman Select Municipal Fund, Inc.
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Name (Age) and Position Term of Office and With the Corporation Length of Time Served* Principal Occupation During Past Five Years ------------------------------------------------------------------------------------------------ Lawrence P. Vogel (46) VP: 1992 to Date Mr. Vogel is Senior Vice President and Vice President Treas: 2000 to Date Treasurer, Investment Companies, of the and Treasurer Manager and is Treasurer of each of the investment companies of the Seligman Group of Funds and of Seligman Data Corp. He was formerly Senior Vice President, Finance, of the Manager, Seligman Advisors, Inc. and Seligman Data Corp.; Vice President and Treasurer of Seligman International, Inc.; Vice President of Seligman Services, Inc.; and Treasurer of Seligman Henderson Co. Thomas G. Rose (45) 2000 to Date Mr. Rose is Senior Vice President, Finance, of Vice President the Manager, Seligman Advisors, Inc. and Seligman Data Corp. since May 2000. He is Vice President of each of the investment companies of the Seligman Group of Funds. He is also Vice President of Seligman International, Inc. and Seligman Services, Inc. Formerly, he was Treasurer of each of the investment companies of the Seligman Group of Funds and Seligman Data Corp. Frank J. Nasta (38) 1994 to Date Mr. Nasta is Managing Director, General Secretary Counsel, and Corporate Secretary of the Manager. He is Secretary of each of the investment companies of the Seligman Group of Funds. He is also Corporate Secretary of Seligman Advisors, Inc., Seligman Services, Inc., Seligman International, Inc. and Seligman Data Corp. He was formerly Corporate Secretary of Seligman Henderson Co.
----------------- * All officers are elected annually by the Board of Directors and serve until their successors are elected and qualify or their earlier resignation. The address of each of the foregoing officers is 100 Park Avenue, New York, New York 10017. 12 Remuneration of Directors and Officers Directors of the Corporation who are not employees of the Manager or its affiliates each receive from the Corporation an annual retainer fee of $60,000, the amount of which is shared by the Corporation and the other investment companies in the Seligman Group of Funds. For the fiscal year ended October 31, 2002, the Corporation paid each Director an aggregate retainer fee of $598. In addition, such Directors are paid a total of $3,000 for each day on which they attend Board and/or Committee meetings ($1,500 for telephone attendance at certain meetings), the amount of which is shared by the Corporation and the other investment companies of the Seligman Group of Funds meeting on the same day. The Directors are also reimbursed for the expenses of attending meetings. Total Directors' fees paid by the Corporation to the Directors listed below for the fiscal year ended October 31, 2002 were as follows:
Number of Directors Aggregate Direct in Group Capacity in which Remuneration was Received Remuneration -------------------------------------------------------------------------------- 8 Directors and Members of Committees $9,288
Director's attendance, retainer and/or committee fees paid to each Director during fiscal 2002 were as follows:
Aggregate Pension or Retirement Total Compensation Compensation Benefits Accrued as From Corporation and Name From Corporation Part of Corporation Expenses Fund Complex* ---- ---------------- ---------------------------- -------------------- John R. Galvin $1,183 -0- $99,000 Alice S. Ilchman 1,087 -0- 93,000 Frank A. McPherson 1,143 -0- 96,000 John E. Merow+ 1,183 -0- 99,000 Betsy S. Michel 1,183 -0- 99,000 Leroy C. Richie 1,183 -0- 99,000 Robert L. Shafer 1,143 -0- 93,000 James N. Whitson+ 1,183 -0- 99,000 ------ $9,288 ======
-------- * In the fiscal year ended October 31, 2002 there were twenty-three registered investment companies of the Seligman Group of Funds. + Mr. Merow, who deferred receiving his fees from the Corporation and other investment companies of the Seligman Group of Funds from 1991 to 1997, had a balance as of October 31, 2002 of $3,470 in his deferred plan account, net of earnings/losses. Mr. Whitson, who deferred receiving his fees from the Corporation and other investment companies of the Seligman Group of Funds, from 1993 to 2002, had a balance as of October 31, 2002 of $8,643 in his deferred plan account, net of earnings/losses. 13 No compensation is paid by the Corporation to Directors or officers of the Corporation who are employees of the Manager. The affirmative vote of a plurality of the votes cast at the meeting is required to approve the election of each of the Nominees. Your Board of Directors Unanimously Recommends that the Stockholders Vote FOR the Election of Each of the Nominees to Serve as Director of the Corporation. B. Ratification of Selection of Auditors (Proposal 2) The Audit Committee of the Board of Directors has recommended, and the Board of Directors, including a majority of those members who are not "interested persons" of the Corporation (as defined in the 1940 Act), has selected, Deloitte & Touche LLP as auditors of the Corporation for 2003. The firm of Deloitte & Touche LLP has extensive experience in investment company accounting and auditing. It is expected that a representative of Deloitte & Touche LLP will be present at the Meeting and will have the opportunity to make a statement and respond to questions. Deloitte & Touche LLP, in accordance with Independence Standards Board Standard No. 1, has confirmed to the Audit Committee that they are independent auditors with respect to the Corporation. Deloitte & Touche LLP has audited the annual financial statements of the Corporation and provided attestation and tax-related services to the Corporation. Deloitte & Touche LLP has also rendered non-audit services to the Manager and Seligman Data Corp., the stockholder service agent for the Corporation (together, the "Affiliated Service Providers"). In making its recommendation, the Audit Committee has considered whether the provision by the independent auditors to the Corporation of nonaudit services to the Corporation or of professional services to the Affiliated Service Providers is compatible with maintaining the auditors' independence and has discussed the auditors' independence with them. Fees for Services to the Corporation Audit Fees. For the fiscal year ended October 31, 2002, the fee for professional services rendered for the audit of the annual financial statements was $24,260. Financial Information Systems Design and Implementation Fees. None. 14 All Other Fees. For the fiscal year ended October 31, 2002, Deloitte & Touche LLP was also paid approximately $40,250 for attestation services and $2,000 for tax-related services. Fees for Services to the Affiliated Service Providers Financial Information Systems Design and Implementation Fees. None. All Other Fees. For the fiscal year ended October 31, 2002, Deloitte & Touche LLP was also paid approximately $111,291 for all other non-audit services rendered on behalf of the Manager and Seligman Data Corp. Of this amount, $69,500 related to attestation and internal control compliance testing, $14,250 related to tax compliance and consultation services and $27,541 related to other services. The affirmative vote of a majority of the votes cast at the Meeting is required to ratify the selection of auditors. Your Board of Directors Unanimously Recommends that the Stockholders Vote FOR the Ratification of the Selection of Deloitte & Touche LLP as Auditors of the Corporation. C. Other Matters The Corporation knows of no other matters which are to be brought before the Meeting. However, if any other matters come before the Meeting, it is intended that the persons named in the enclosed form of Proxy, or their substitutes, will vote the Proxy in accordance with their judgment on such matters. The persons named in the form of Proxy, or their substitutes, will have discretionary authority to vote on any Stockholder proposal of which the Corporation first received notice after March 5, 2003. In addition, the Corporation's by-laws permit the Corporation to exclude from consideration at the Meeting any Stockholder proposal first brought to the attention of the Corporation after March 15, 2003. Notice is hereby given that, under the Securities and Exchange Commission's stockholder proposal rule (Rule 14a-8), any Stockholder proposal which may properly be included in the proxy solicitation material for the next Annual Meeting, now scheduled for May 2004, must be received by the Corporation no later than December 20, 2003. Timely notice of Stockholder proposals submitted outside of the Rule 14a-8 process must be received by the Corporation no earlier than February 8, 2004 and no later than March 9, 2004 to be eligible for presentation at the May 2004 Annual Meeting. 15 D. Expenses The Corporation will bear the cost of soliciting Proxies. In addition to the use of the mails, Proxies may be solicited personally or by telephone or via facsimile by Directors, officers and employees of the Corporation, the Manager, Seligman Advisors, Inc., Seligman Services, Inc. and Seligman Data Corp., and the Corporation may reimburse persons holding shares in their names or names of their nominees for their expenses in sending solicitation material to their beneficial owners. The Corporation has engaged Morrow & Co., Inc., 445 Park Avenue, New York, NY 10022 to assist in soliciting for a fee of $1,000, plus expenses. By order of the Board of Directors, /s/ Frank J. Nasta Secretary ----------------- It is important that Proxies be returned promptly. All Stockholders, including those who expect to attend the Meeting, are urged to date, fill in, sign and mail the enclosed form of Proxy in the enclosed return envelope, which requires no postage if mailed in the United States. A Proxy is not required for admission to the Meeting. 16 APPENDIX 1 SELIGMAN QUALITY MUNICIPAL FUND, INC. (the "Corporation") AUDIT COMMITTEE REPORT The role of the Audit Committee is to assist the Board of Directors in its oversight of the Corporation's financial reporting process. The Committee operates pursuant to a charter that was last amended and restated by the Board on March 15, 2001. As set forth in the charter, management of the Corporation is responsible for the preparation, presentation and integrity of the Corporation's financial statements, and for the procedures designed to assure compliance with accounting standards and applicable laws and regulations. The independent auditors are responsible for auditing the Corporation's financial statements and expressing an opinion as to their conformity with generally accepted accounting principles. In performing its oversight function, the Committee has considered and discussed the audited financial statements with management and the independent auditors. The Committee has discussed with the independent auditors the matters required to be discussed by Statement on Auditing Standards No. 61, Communication with Audit Committees, as modified or supplemented. The Committee has also received the written disclosures from the independent auditors required by Independence Standards Board Standard No. 1, Independence Discussions with Audit Committees, as currently in effect. The members of the Audit Committee are not professionally engaged in the practice of auditing or accounting and are not experts in the fields of accounting or auditing, including the issue of auditor independence. Members of the Committee rely without independent verification on the information provided to them and on the representations made by management and the independent auditors. Accordingly, the Audit Committee's oversight does not provide an independent basis to determine that management has maintained appropriate accounting and financial reporting principles or appropriate internal controls and procedures designed to assure compliance with accounting standards and applicable laws and regulations. Furthermore, the Audit Committee's considerations and discussions referred to above do not assure that the audit of the Corporation's financial statements has been carried out in accordance with generally accepted auditing standards, that the financial statements are presented in accordance with generally accepted accounting principles or that the Corporation's auditors are in fact "independent." 1-i Based upon the reports and discussions described in this report, and subject to the limitations on the role and responsibilities of the Committee referred to above and in the charter, the Committee recommended to the Board that the audited financial statements be included in the Corporation's Annual Report for the year ended October 31, 2002. SUBMITTED BY THE AUDIT COMMITTEE OF THE CORPORATION'S BOARD OF DIRECTORS John R. Galvin John E. Merow Betsy S. Michel Leroy C. Richie James N. Whitson As approved on March 20, 2003. 2-ii SELIGMAN QUALITY MUNICIPAL FUND, INC. Notice of Annual Meeting of Stockholders and Proxy Statement Time: May 8, 2003 10:00 A.M. Place: Offices of the Corporation 100 Park Avenue New York, New York 10017 Please date, fill in and sign the enclosed form of Proxy and mail it in the enclosed return envelope which requires no postage if mailed in the United States. [LOGO] J&WS Seligman Quality Municipal Fund, Inc. Managed by [LOGO] J&WS J. & W. SELIGMAN & CO. INCORPORATED INVESTMENT MANAGERS AND ADVISORS ESTABLISHED 1864 100 Park Avenue, New York, NY 10017 PROXY SELIGMAN QUALITY MUNICIPAL FUND, INC. 100 Park Avenue, New York, NY 10017 PREFERRED SERIES TH The undersigned, revoking previous proxies, acknowledges receipt of the Notice of Meeting and Proxy Statement for the Annual Meeting of Stockholders of SELIGMAN QUALITY MUNICIPAL FUND, INC., to be held May 8, 2003 and appoints PAUL B. GOUCHER, FRANK J. NASTA and BRIAN T. ZINO (and each of them) proxies, with power of substitution, to attend the Annual Meeting (and adjournments thereof) and vote all shares the undersigned is entitled to vote upon the matters indicated on the reverse side and on any other business that may properly come before the Meeting. This proxy when properly executed will be voted in the manner directed by the undersigned. If no instructions are given, your proxies will vote FOR the election of the nominees of the Board of Directors and FOR Proposal 2. THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS Your Vote is Important. Complete, sign on reverse side and return this card as soon as possible. Mark each vote with an X in the box. (Continued and to be signed on the reverse side) The Board of Directors recommends that you vote FOR each of the Nominees and FOR Proposal 2.
1. ELECTION OF DIRECTORS NOMINEES: Robert B. Catell, John R. Galvin, [ ] FOR [ ] WITHHOLD [ ] WITHHOLDING AUTHORITY William C. Morris and Robert L. Shafer all nominees all nominees for individual nominees ------------------------------------------------- listed 2. Ratification of the selection of Deloitte & Touche LLP as Auditors. [ ] FOR [ ] AGAINST [ ] ABSTAIN DATED ---------------------------------------, 2003 -------------------------------------------------- Signature Please sign exactly as your name(s) appear(s) on this proxy. Only one signature is required in case of a joint account. When signing in a representative capacity, please give title.
YOUR VOTE IS IMPORTANT. Please complete, sign and return this card as soon as possible. Mark each vote with an X in the box. PROXY SELIGMAN QUALITY MUNICIPAL FUND, INC. 100 Park Avenue, New York, NY 10017 COMMON The undersigned, revoking previous proxies, acknowledges receipt of the Notice of Meeting and Proxy Statement for the Annual Meeting of Stockholders of SELIGMAN QUALITY MUNICIPAL FUND, INC., to be held May 8, 2003 and appoints PAUL B. GOUCHER, FRANK J. NASTA and BRIAN T. ZINO (and each of them) proxies, with power of substitution, to attend the Annual Meeting (and adjournments thereof) and vote all shares the undersigned is entitled to vote upon the matters indicated on the reverse side and on any other business that may properly come before the Meeting. This proxy when properly executed will be voted in the manner directed by the undersigned. If no instructions are given, your proxies will vote FOR the election of the nominees of the Board of Directors and FOR Proposal 2. --------------------------------------------------------------------------- THE SOLICITATION OF THIS PROXY IS MADE ON BEHALF OF THE BOARD OF DIRECTORS --------------------------------------------------------------------------- Your Vote is Important. Complete, sign on reverse side and return this card as soon as possible. Mark each vote with an X in the box. (Continued and to be signed on the reverse side) The Board of Directors recommends that you vote FOR each of the Nominees and FOR Proposal 2.
1. ELECTION OF DIRECTORS NOMINEES: Robert B. Catell, John R. Galvin, [ ] FOR [ ] WITHHOLD [ ] WITHHOLDING AUTHORITY William C. Morris and Robert L. Shafer all nominees all nominees for individual nominees ------------------------------------------------- listed 2. Ratification of the selection of Deloitte & Touche LLP as Auditors. [ ] FOR [ ] AGAINST [ ] ABSTAIN DATED ---------------------------------------, 2003 -------------------------------------------------- Signature Please sign exactly as your name(s) appear(s) on this proxy. Only one signature is required in case of a joint account. When signing in a representative capacity, please give title.
YOUR VOTE IS IMPORTANT. Please complete, sign and return this card as soon as possible. Mark each vote with an X in the box.