UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[ ] Pre-Effective Amendment No. [ ]
[ ] Post-Effective Amendment No. [ ]
(Check Appropriate Box or Boxes)
RIVERSOURCE GOVERNMENT MONEY MARKET FUND, INC.
(Exact Name of Registrant as Specified in Charter)
(612) 671-1947
(Area Code and Telephone Number)
50606 Ameriprise Financial Center, Minneapolis, Minnesota 55474
(Address of Principal Executive Offices: Number, Street, City, State, Zip Code)
Scott R. Plummer
(Name and Address of Agent for Service)
5228 Ameriprise Financial Center Minneapolis MN 55474
(Number and Street) (City) (State) (Zip Code)
Approximate Date of Proposed Public Offering: As soon as practicable after the
effective date of the Registration Statement.
Title of Securities Being Registered: Common Stock
No filing fee is due because of reliance on Section 24(f) of the Investment
Company Act of 1940.
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a)
may determine. It is proposed that this filing will become effective on January
22, 2010.
RIVERSOURCE FAMILY OF FUNDS
734 Ameriprise Financial Center
Minneapolis, Minnesota 55474
NOTICE OF A JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 15, 2010
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND
RIVERSOURCE PARTNERS SELECT VALUE FUND
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND
SELIGMAN GLOBAL SMALLER COMPANIES FUND
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND
A Joint Special Meeting of Shareholders (the "Meeting") of each of the above-
listed funds in the RiverSource Family of Funds will be held at [10:00 a.m. CDT]
on March 15, 2010, at [The Marquette Hotel, 710 Marquette Avenue, Minneapolis,
Minnesota 55402 in the Minnesota River Room on the Third Floor]. At the Meeting,
shareholders will consider the following proposals with respect to their Selling
Fund:
To approve an Agreement and Plan of Reorganization by and among the Selling
Fund, its corresponding Buying Fund and RiverSource Investments, LLC (the
"Agreement and Plan of Reorganization"). Each Selling Fund will vote
separately on the relevant proposal as indicated below:
<Table>
<Caption>
PROPOSAL SELLING FUND BUYING FUND
1. RiverSource Partners Aggressive Growth
Fund RiverSource Mid Cap Growth Fund
2. RiverSource Partners Select Value Fund RiverSource Mid Cap Value Fund
3. RiverSource Partners Small Cap Equity
Fund Seligman Smaller-Cap Value Fund
4. RiverSource Partners Small Cap Growth
Fund Seligman Frontier Fund
5. Seligman Global Smaller Companies Fund RiverSource Partners International
Small Cap Fund
6. RiverSource Tax-Exempt Money Market RiverSource Government Money Market
Fund Fund
(formerly Seligman Cash Management
Fund)
</Table>
Pursuant to the Agreement and Plan of Reorganization, each Selling Fund will
transfer all of its assets attributable to each class of its shares to the
corresponding Buying Fund in exchange for shares of the corresponding class
of the Buying Fund and the assumption by the Buying Fund of all of the
liabilities of the Selling Fund. The Buying Fund shares will be distributed
proportionately to shareholders of the relevant class of the Selling Fund.
Please take some time to read the combined proxy statement/prospectus. It
discusses these proposals in more detail. If you were a shareholder on Jan. 15,
2010, you may vote at the Meeting or at any adjournment or postponement of the
Meeting. We hope you can attend the Meeting. Even if you plan to attend the
Meeting, please vote by telephone, internet or mail. Just follow the
instructions on the enclosed proxy card. If you have questions, please call toll
free at 1(866) 859-8682. It is important that you vote. The Board of Directors
of each Selling Fund recommends that you vote FOR the proposal applicable to it.
The combined proxy statement/prospectus is expected to be mailed to shareholders
on or about Jan. , 2010.
By order of the Boards of Directors
/S/ Scott R. Plummer
Scott R. Plummer, Secretary
Jan. , 2010
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND
RIVERSOURCE PARTNERS SELECT VALUE FUND
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND
SELIGMAN GLOBAL SMALLER COMPANIES FUND
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND
COMBINED PROXY STATEMENT/PROSPECTUS
DATED JAN. , 2010
This document is a proxy statement for each Selling Fund (as defined below) and
a prospectus for each Buying Fund (as defined below). The address and telephone
number of each Selling Fund and Buying Fund is 734 Ameriprise Financial Center,
Minneapolis, Minnesota 55474 and 1(800) 221-2450. This combined proxy
statement/prospectus and the enclosed proxy card are expected to be mailed to
shareholders ("shareholders" or "stockholders") beginning on or about Jan. ,
2010. This combined proxy statement/prospectus contains information you should
know before voting on the following proposal with respect to your Selling Fund,
as indicated below:
<Table>
<Caption>
TO BE VOTED ON
PROPOSAL BY SHAREHOLDERS OF:
-----------------------------------------------------------------------------------------------------------
1. To approve the Agreement and Plan of Reorganization (the RiverSource Partners Aggressive Growth
"Agreement") by and among RiverSource Partners Aggressive Fund
Growth Fund (the "Selling Fund"), a series of RiverSource
Managers Series, Inc., RiverSource Mid Cap Growth Fund
(the "Buying Fund"), a series of RiverSource Equity
Series, Inc., and RiverSource Investments, LLC. Under the
Agreement, the Selling Fund will transfer all of its
assets attributable to each class of its shares to the
Buying Fund, as indicated below, in exchange for shares of
the corresponding class of the Buying Fund and the
assumption by the Buying Fund of all of the liabilities of
the Selling Fund. The Buying Fund shares will be
distributed proportionately to shareholders of the
relevant class of the Selling Fund.
</Table>
<Table>
<Caption>
SELLING FUND BUYING FUND
------------ -----------
Class A Class A
Class B Class B
Class C Class C
Class I Class I
Class R2 Class R2
Class R3 Class R3
Class R4 Class R4
Class R5 Class R5
</Table>
<Table>
<Caption>
-----------------------------------------------------------------------------------------------------------
2. To approve the Agreement and Plan of Reorganization (the RiverSource Partners Select Value Fund
"Agreement") by and among RiverSource Partners Select
Value Fund (the "Selling Fund"), a series of RiverSource
Managers Series, Inc., RiverSource Mid Cap Value Fund (the
"Buying Fund"), a series of RiverSource Investment Series,
Inc., and RiverSource Investments, LLC. Under the
Agreement, the Selling Fund will transfer all of its
assets attributable to each class of its shares to the
Buying Fund, as indicated below, in exchange for shares of
the corresponding class of the Buying Fund and the
assumption by the Buying Fund of all of the liabilities of
the Selling Fund. The Buying Fund shares will be
distributed proportionately to shareholders of the
relevant class of the Selling Fund.
</Table>
<Table>
<Caption>
SELLING FUND BUYING FUND
------------ -----------
Class A Class A
Class B Class B
Class C Class C
Class I Class I
Class R4 Class R4
</Table>
--------------------------------------------------------------------------------
1
<Table>
<Caption>
TO BE VOTED ON
PROPOSAL BY SHAREHOLDERS OF:
-----------------------------------------------------------------------------------------------------------
3. To approve the Agreement and Plan of Reorganization (the RiverSource Partners Small Cap Equity Fund
"Agreement") by and among RiverSource Partners Small Cap
Equity Fund (the "Selling Fund"), a series of RiverSource
Managers Series, Inc., Seligman Smaller-Cap Value Fund
(the "Buying Fund"), a series of Seligman Value Fund
Series, Inc., and RiverSource Investments, LLC. Under the
Agreement, the Selling Fund will transfer all of its
assets attributable to each class of its shares to the
Buying Fund, as indicated below, in exchange for shares of
the corresponding class of the Buying Fund and the
assumption by the Buying Fund of all of the liabilities of
the Selling Fund. The Buying Fund shares will be
distributed proportionately to shareholders of the
relevant class of the Selling Fund.
</Table>
<Table>
<Caption>
SELLING FUND BUYING FUND
------------ -----------
Class A Class A
Class B Class B
Class C Class C
Class I Class I
Class R4 Class R4
</Table>
<Table>
<Caption>
-----------------------------------------------------------------------------------------------------------
4. To approve the Agreement and Plan of Reorganization (the RiverSource Partners Small Cap Growth Fund
"Agreement") by and among RiverSource Partners Small Cap
Growth Fund (the "Selling Fund"), a series of RiverSource
Strategy Series, Inc., Seligman Frontier Fund, Inc. (the
"Buying Fund"), and RiverSource Investments, LLC. Under
the Agreement, the Selling Fund will transfer all of its
assets attributable to each class of its shares to the
Buying Fund, as indicated below, in exchange for shares of
the corresponding class of the Buying Fund and the
assumption by the Buying Fund of all of the liabilities of
the Selling Fund. The Buying Fund shares will be
distributed proportionately to shareholders of the
relevant class of the Selling Fund.
</Table>
<Table>
<Caption>
SELLING FUND BUYING FUND
------------ -----------
Class A Class A
Class B Class B
Class C Class C
Class I Class I
Class R2 Class R2
Class R3 Class R3
Class R4 Class R4
Class R5 Class R5
</Table>
<Table>
<Caption>
-----------------------------------------------------------------------------------------------------------
5. To approve the Agreement and Plan of Reorganization (the Seligman Global Smaller Companies Fund
"Agreement") by and among Seligman Global Smaller
Companies Fund (the "Selling Fund"), a series of Seligman
Global Fund Series, Inc., RiverSource Partners
International Small Cap Fund (the "Buying Fund"), a series
of RiverSource International Managers Series, Inc. and
RiverSource Investments, LLC. Under the Agreement, the
Selling Fund will transfer all of its assets attributable
to each class of its shares to the Buying Fund, as
indicated below, in exchange for shares of the
corresponding class of the Buying Fund and the assumption
by the Buying Fund of all of the liabilities of the
Selling Fund. The Buying Fund shares will be distributed
proportionately to shareholders of the relevant class of
the Selling Fund.
</Table>
<Table>
<Caption>
SELLING FUND BUYING FUND
------------ -----------
Class A Class A
Class B Class B
Class C Class C
Class R2 Class R2
Class R5 Class R5
</Table>
--------------------------------------------------------------------------------
2
<Table>
<Caption>
TO BE VOTED ON
PROPOSAL BY SHAREHOLDERS OF:
-----------------------------------------------------------------------------------------------------------
6. To approve the Agreement and Plan of Reorganization (the RiverSource Tax-Exempt Money Market Fund
"Agreement") by and among RiverSource Tax-Exempt Money
Market Fund (the "Selling Fund"), a series of RiverSource
Tax-Exempt Money Market Series, Inc., RiverSource
Government Money Market Fund, Inc. (formerly Seligman Cash
Management Fund, Inc.) (the "Buying Fund"), and
RiverSource Investments, LLC. Under this Agreement, the
Selling Fund will transfer all of its assets attributable
to Class A* shares to the Buying Fund, as indicated below,
in exchange for Class A shares of the Buying Fund and the
assumption by the Buying Fund of all of the liabilities of
the Selling Fund. The Buying Fund Class A shares will be
distributed to shareholders of the Selling Fund.
</Table>
<Table>
<Caption>
SELLING FUND BUYING FUND
------------ -----------
Class A Class A
</Table>
* The single class of shares of RiverSource Tax-Exempt Money Market Fund is
referred to as
Class A shares.
--------------------------------------------------------------------------------
These proposals will be considered by shareholders who owned shares of the
Selling Funds on Jan. 15, 2010, at a joint special meeting of such shareholders
(the "Meeting") that will be held at [10:00 a.m. CDT] on [meeting date], at [The
Marquette Hotel, 710 Marquette Avenue, Minneapolis, Minnesota 55402 in the
Minnesota River Room on the Third Floor]. Each of the Selling Funds and the
Buying Funds (collectively, the "Funds") is a registered open-end management
investment company (or a series thereof) and is part of the RiverSource Family
of Funds, which includes funds branded "RiverSource" and "Seligman." Please read
this combined proxy statement/prospectus and keep it for future reference.
Although the Board of Directors (the "Board" or the "Board of Directors") of
each Selling Fund recommends that shareholders approve the reorganization (each
a "Reorganization") of each Selling Fund with the corresponding Buying Fund, the
Reorganization of each Selling Fund is not conditioned upon the Reorganization
of any other Selling Fund. Accordingly, if shareholders of one Selling Fund
approve its Reorganization, but shareholders of another Selling Fund do not
approve that Selling Fund's Reorganization, it is expected that the
Reorganization of the first Selling Fund will take place as described in this
proxy statement/prospectus.
HOW EACH REORGANIZATION WILL WORK
- Each Selling Fund will transfer all of its assets to the corresponding Buying
Fund in exchange for shares of such Buying Fund ("Reorganization Shares") and
the assumption by the Buying Fund of all of the Selling Fund's liabilities.
- Each Buying Fund will issue Reorganization Shares with an aggregate net asset
value equal to the aggregate value of the assets that it receives from the
corresponding Selling Fund, less the liabilities it assumes from the
corresponding Selling Fund. The Reorganization Shares of each class will be
distributed to the Selling Fund's shareholders of the corresponding class in
proportion to their holdings in such class of the Selling Fund. For example,
holders of Class A shares of a Selling Fund will receive Class A shares of
the corresponding Buying Fund with the same aggregate net asset value as
their Selling Fund Class A shares at the time of the Reorganization. You will
not pay any sales charge in connection with this distribution of
Reorganization Shares. If you already have a Buying Fund account with the
exact registration as the Selling Fund account, shares distributed in the
Reorganization are typically added to that account. As a result, when average
cost is calculated for federal income tax purposes, the cost of the shares in
the two accounts you owned will be combined.
WHERE TO GET MORE INFORMATION
The following documents have been filed with the Securities and Exchange
Commission (the "SEC") and are incorporated into this proxy statement/prospectus
by reference:
- the prospectus of RiverSource Partners Aggressive Growth Fund, dated July 30,
2009, as supplemented to date;
- the prospectus of RiverSource Partners Select Value Fund, dated July 30,
2009, as supplemented to date;
- the prospectus of RiverSource Partners Small Cap Equity Fund, dated July 30,
2009, as supplemented to date;
- the prospectus of RiverSource Partners Small Cap Growth Fund, dated May 29,
2009, as supplemented to date;
- the prospectus of Seligman Global Smaller Companies Fund, dated Dec. 30,
2009, as supplemented to date;
- the prospectus of RiverSource Tax-Exempt Money Market Fund, dated Feb. 27,
2009, as supplemented to date;
- the Statement of Additional Information of the Selling Funds (RiverSource
Partners Aggressive Growth Fund, RiverSource Partners Select Value Fund,
RiverSource Partners Small Cap Equity Fund, RiverSource Partners Small Cap
Growth Fund, RiverSource Tax-Exempt Money Market Fund and Seligman Global
Smaller Companies Fund), dated [date], as supplemented to date;
3
- the Statement of Additional Information relating to the Reorganizations (the
"Merger SAI"), dated Jan. , 2010;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
RiverSource Partners Aggressive Growth Fund, for the period ended May 31,
2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
RiverSource Mid Cap Growth Fund, for the period ended Nov. 30, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
RiverSource Partners Select Value Fund, for the period ended May 31, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
RiverSource Mid Cap Value Fund for the period ended Sept. 30, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
RiverSource Partners Small Cap Equity Fund, for the period ended May 31,
2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
Seligman Smaller-Cap Value Fund, for the period ended Dec. 31, 2008, and the
unaudited financial statements included in the Semiannual Report to
Shareholders of Seligman Smaller-Cap Value Fund, for the period ended June
30, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
RiverSource Partners Small Cap Growth Fund, for the period ended March 31,
2009, and the unaudited financial statements included in the Semiannual
Report to Shareholders of RiverSource Partners Small Cap Growth Fund, for the
period ended Sept. 30, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
Seligman Frontier Fund, for the period ended Oct. 31, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
Seligman Global Smaller Companies Fund, for the period ended Oct. 31, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
RiverSource Partners International Small Cap Fund, for the period ended Oct.
31, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
RiverSource Tax-Exempt Money Market Fund, for the period ended Dec. 31, 2008,
and the unaudited financial statements included in the Semiannual Report to
Shareholders of RiverSource Tax-Exempt Money Market Fund, for the period
ended June 30, 2009; and
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders of
RiverSource Government Money Market Fund (formerly Seligman Cash Management
Fund), for the period ended Dec. 31, 2008, and the unaudited financial
statements included in the Semiannual Report to Shareholders of RiverSource
Government Money Market Fund, for the period ended June 30, 2009.
If the Reorganization of RiverSource Partners Small Cap Growth Fund is approved
by shareholders at the meeting scheduled to be held on March 15, 2010 and occurs
prior to the required mailing date of the next shareholder report, any
shareholder may request a copy free of charge of the annual report for
RiverSource Partners Small Cap Growth Fund for the period ended March 31, 2010
by calling toll free at 1(800) 221-2450.
For a copy at no charge of any of the documents listed above and/or to ask
questions about this combined proxy statement/ prospectus, please call your
Fund's proxy solicitor toll free at 1(866) 859-8682.
Each of the Funds is subject to the information requirements of the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 (the "1940 Act") and
files reports, proxy materials and other information with the SEC. These
reports, proxy materials and other information can be inspected and copied at
the Public Reference Room maintained by the SEC. Copies may be obtained, after
paying a duplicating fee, by electronic request at publicinfo@sec.gov, or by
writing to the Public Reference Section of the SEC, 100 F Street, N.E.,
Washington, D.C. 20549-1520. In addition, copies of these documents may be
viewed on-line or downloaded from the SEC's website at www.sec.gov.
PLEASE NOTE THAT THE FUNDS ARE NOT BANK DEPOSITS, ARE NOT FEDERALLY INSURED, ARE
NOT ENDORSED BY ANY BANK OR GOVERNMENT AGENCY AND ARE NOT GUARANTEED TO ACHIEVE
THEIR INVESTMENT OBJECTIVES.
As with all mutual funds, the SEC has not approved or disapproved these
securities or passed on the adequacy of this combined proxy
statement/prospectus. Any representation to the contrary is a criminal offense.
4
TABLE OF CONTENTS
<Table>
<Caption>
PAGE
----
SECTION A -- REORGANIZATION PROPOSALS............................................ 8
SUMMARY........................................................................ 8
How Each Reorganization Will Work............................................ 8
Tax Consequences............................................................. 8
Fees and Expenses of the Fund................................................ 9
Proposal 1. Reorganization of RiverSource Partners Aggressive Growth Fund
into RiverSource Mid Cap Growth Fund..................................... 9
Proposal 2. Reorganization of RiverSource Partners Select Value Fund into
RiverSource Mid Cap Value Fund........................................... 13
Proposal 3. Reorganization of RiverSource Partners Small Cap Equity Fund
into Seligman Smaller-Cap Value Fund..................................... 16
Proposal 4. Reorganization of RiverSource Partners Small Cap Growth Fund
into Seligman Frontier Fund.............................................. 19
Proposal 5. Reorganization of Seligman Global Smaller Companies Fund into
RiverSource Partners International Small Cap Fund........................ 22
Proposal 6. Reorganization of RiverSource Tax-Exempt Money Market Fund into
RiverSource Government Money Market Fund................................. 25
PROPOSAL 1. REORGANIZATION OF RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND INTO
RIVERSOURCE MID CAP GROWTH FUND.............................................. 27
Comparison of the Selling Fund and the Buying Fund........................... 27
Comparison of Investment Objectives........................................ 27
Comparison of Principal Investment Strategies.............................. 27
Comparison of Fundamental Policies......................................... 28
Comparison of Nonfundamental Policies...................................... 29
Comparison of Principal Risk Factors....................................... 29
Performance................................................................ 29
PROPOSAL 2. REORGANIZATION OF RIVERSOURCE PARTNERS SELECT VALUE FUND INTO
RIVERSOURCE MID CAP VALUE FUND............................................... 33
Comparison of the Selling Fund and the Buying Fund........................... 33
Comparison of Investment Objectives........................................ 33
Comparison of Principal Investment Strategies.............................. 33
Comparison of Fundamental Policies......................................... 34
Comparison of Nonfundamental Policies...................................... 35
Comparison of Principal Risk Factors....................................... 35
Performance................................................................ 36
PROPOSAL 3. REORGANIZATION OF RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND INTO
SELIGMAN SMALLER-CAP VALUE FUND.............................................. 39
Comparison of the Selling Fund and the Buying Fund........................... 39
Comparison of Investment Objectives........................................ 39
Comparison of Principal Investment Strategies.............................. 39
Comparison of Fundamental Policies......................................... 41
Comparison of Nonfundamental Policies...................................... 42
Comparison of Principal Risk Factors....................................... 42
Performance................................................................ 43
</Table>
5
<Table>
<Caption>
PAGE
----
PROPOSAL 4. REORGANIZATION OF RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND INTO
SELIGMAN FRONTIER FUND....................................................... 47
Comparison of the Selling Fund and the Buying Fund........................... 47
Comparison of Investment Objectives........................................ 47
Comparison of Principal Investment Strategies.............................. 47
Comparison of Fundamental Policies......................................... 49
Comparison of Nonfundamental Policies...................................... 50
Comparison of Principal Risk Factors....................................... 50
Performance................................................................ 51
PROPOSAL 5. REORGANIZATION OF SELIGMAN GLOBAL SMALLER COMPANIES FUND INTO
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND............................ 55
Comparison of the Selling Fund and the Buying Fund........................... 55
Comparison of Investment Objectives........................................ 55
Comparison of Principal Investment Strategies.............................. 55
Comparison of Fundamental Policies......................................... 57
Comparison of Nonfundamental Policies...................................... 58
Comparison of Principal Risk Factors....................................... 59
Performance................................................................ 61
PROPOSAL 6. REORGANIZATION OF RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND INTO
RIVERSOURCE GOVERNMENT MONEY MARKET FUND..................................... 65
Comparison of the Selling Fund and the Buying Fund........................... 65
Comparison of Investment Objectives........................................ 65
Comparison of Principal Investment Strategies.............................. 65
Comparison of Fundamental Policies......................................... 67
Comparison of Nonfundamental Policies...................................... 69
Comparison of Principal Risk Factors....................................... 69
Performance................................................................ 70
ADDITIONAL INFORMATION ABOUT EACH REORGANIZATION............................... 72
Terms of the Reorganizations................................................. 72
Conditions to Closing Each Reorganization.................................... 72
Termination of the Agreement................................................. 72
Tax Status of the Reorganizations............................................ 72
Reasons for the Proposed Reorganizations and Board Deliberations............. 76
Board Determinations......................................................... 81
Board Recommendation and Required Vote....................................... 81
</Table>
6
<Table>
<Caption>
PAGE
----
SECTION B -- PROXY VOTING AND SHAREHOLDER MEETING INFORMATION.................... 82
SECTION C -- CAPITALIZATION, OWNERSHIP OF FUND SHARES AND FINANCIAL HIGHLIGHTS... 84
Capitalization of Selling Funds and Buying Funds............................. 84
Ownership of Selling Fund and Buying Fund Shares............................. 87
Financial Highlights......................................................... 91
EXHIBITS
A. Form of Agreement and Plan of Reorganization.................................. A.1
B. Minnesota Business Corporation Act Sections 302A.471 and 302A.473............. B.1
C. Additional Information Applicable to the Buying Funds......................... C.1
D. Comparison of Organizational Documents........................................ D.1
E. RiverSource Family of Funds Privacy Notice.................................... E.1
</Table>
7
SECTION A -- REORGANIZATION PROPOSALS
The following information describes each proposed Reorganization.
SUMMARY
This combined proxy statement/prospectus is being used by each Selling Fund to
solicit proxies to vote at a joint special meeting of shareholders. Shareholders
of each Selling Fund will consider a proposal to approve the Agreement and Plan
of Reorganization (the "Agreement") providing for the Reorganization of their
Selling Fund into the corresponding Buying Fund. The form of the Agreement is
included as Exhibit A.
The following is a summary. More complete information appears later in this
proxy statement/prospectus. You should read the entire proxy
statement/prospectus and the exhibits because they contain details that are not
included in this summary.
HOW EACH REORGANIZATION WILL WORK
- Each Selling Fund will transfer all of its assets to the corresponding Buying
Fund in exchange for shares of the corresponding Buying Fund ("Reorganization
Shares") and the assumption by the corresponding Buying Fund of all of the
Selling Fund's liabilities.
- Each Buying Fund will issue Reorganization Shares with an aggregate net asset
value equal to the aggregate value of the assets that it receives from the
corresponding Selling Fund, less the liabilities it assumes from the
corresponding Selling Fund. Reorganization Shares of each class of each
Buying Fund will be distributed to the shareholders of the corresponding
class of the corresponding Selling Fund in proportion to their holdings of
such class of such Selling Fund. For example, holders of Class A shares of a
Selling Fund will receive Class A shares of the corresponding Buying Fund
with the same aggregate net asset value as the aggregate net asset value of
their Selling Fund Class A shares at the time of the Reorganization. If you
already have a Buying Fund account with the exact registration as the Selling
Fund account, shares distributed in the Reorganization are typically added to
that account. As a result, when average cost is calculated for federal income
tax purposes, the cost of the shares in the two accounts you owned will be
combined.
- As part of the Reorganization of your Selling Fund, systematic transactions
(such as bank authorizations and systematic payouts) currently set up for
your Selling Fund account may be transferred to your new Buying Fund account.
Please contact your financial intermediary for additional details.
- Neither the Selling Fund nor the shareholders of any Selling Fund will pay
any sales charge in connection with acquiring Reorganization shares.
- After a Reorganization is completed, Selling Fund shareholders will be
shareholders of the corresponding Buying Fund, and the Selling Fund will be
dissolved.
TAX CONSEQUENCES
Each Reorganization is expected to be tax-free for federal income tax purposes
and will not take place unless the Selling Fund and the corresponding Buying
Fund receive a satisfactory opinion of tax counsel substantially to the effect
that it will be tax-free, as described in more detail in the section entitled
"Tax Status of the Reorganizations." Accordingly, no gain or loss is expected to
be recognized by the Selling Fund or its shareholders as a direct result of a
Reorganization. Some or all of the portfolio assets of a Selling Fund may be
sold in connection with its Reorganization. The actual tax impact of such sales
will depend on the difference between the price at which such portfolio assets
are sold and the Selling Fund's tax basis in such assets. Any net capital gains
recognized in these sales will be distributed to shareholders as capital gain
dividends (to the extent of net realized long-term capital gains over net
realized short-term capital losses) and/or ordinary dividends (to the extent of
net realized short-term capital gains over net realized long-term capital
losses) during or with respect to the year of sale, and such distributions will
be taxable to shareholders. Additionally, because each Reorganization will end
the tax year of the applicable Selling Fund, it will accelerate distributions to
shareholders from the Selling Fund for its short tax year ending on the date of
the Reorganization. Those tax year-end distributions will be taxable except to
the extent of any exempt-interest dividends, and will include any capital gains
resulting from portfolio turnover prior to the Reorganization that were not
previously distributed. At any time prior to a Reorganization, a shareholder may
redeem shares of a Selling Fund. This would likely result in the recognition of
gain or loss by the shareholder for federal income tax purposes. If a
shareholder holds Selling Fund shares in a non-taxable account, distributions
and redemption proceeds with respect to those shares will not be taxable to the
shareholder if those amounts remain in the non-taxable account. Further,
shareholders of RiverSource Tax-Exempt Money Market Fund, which distributes tax-
exempt dividends, can expect to receive taxable distributions, and not tax-
exempt income, following the Fund's merger into RiverSource Government Money
Market Fund.
The tax basis and holding period of the shareholders' Selling Fund shares are
expected to carry over to the shareholders' Reorganization Shares in the Buying
Fund.
For more information about the federal income tax consequences of the
Reorganizations, see the section entitled "Tax Status of the Reorganizations."
8
FEES AND EXPENSES OF THE FUND
PROPOSAL 1. REORGANIZATION OF RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND INTO
RIVERSOURCE MID CAP GROWTH FUND
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the Selling Fund or shares of the Buying Fund. The tables
also show pro forma fees and expenses of the Buying Fund assuming the proposed
Reorganization relating to the Buying Fund had been in effect at the beginning
of the most recent fiscal year. You may qualify for sales charge discounts on
Class A shares of a Fund if you and members of your household invest, or agree
to invest in the future, at least $50,000 in the RiverSource Family of Funds.
More information about these and other discounts is available from your
financial professional and under "Sales Charges" in Exhibit C of this proxy
statement/prospectus and under "Class A -- Calculation of the Sales Charge" in
the Fund's Statement of Additional Information (SAI).
Annual fund operating expenses are based on expenses incurred during the Fund's
most recently completed fiscal year, and are expressed as a percentage (expense
ratio) of the Fund's average net assets during the period. The tables have been
adjusted to reflect current fee schedules but have not been adjusted to reflect
the Fund's assets as of a different period or point in time, as asset levels
will fluctuate. As of the date of this proxy statement/prospectus, a Fund's net
assets may be lower or higher than the Fund's average net assets during the most
recently completed fiscal year. In general, a fund's annual operating expenses
will increase as the fund's assets decrease. Accordingly, the Fund's annual
operating expenses, if adjusted based on assets as of the date of this proxy
statement/prospectus, could be higher or lower than are expressed in the fee and
expense table below. The commitment by RiverSource Investments, LLC
("RiverSource Investments", "investment manager" or "manager") and its
affiliates to waive fees and/or cap (reimburse) expenses limits the impact that
any decrease in the Fund's assets will have on its total annual (net) operating
expenses in the current fiscal year.
The fees and expenses below exclude the costs of this Reorganization, because
these will be paid for by the investment manager and its affiliates.
ACTUAL AND PRO FORMA FUND EXPENSES FOR THE MOST RECENT FISCAL YEAR
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (ACTUAL) (SELLING CLASS I, R2,
FUND) CLASS A CLASS B CLASS C R3, R4, R5
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
RIVERSOURCE MID CAP GROWTH FUND (ACTUAL) (BUYING FUND)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
RIVERSOURCE MID CAP GROWTH FUND (PRO FORMA COMBINED)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
</Table>
(a) A 1% contingent deferred sales charge ("CDSC") may be assessed on Class A
shares purchased without an initial sales charge and sold within 18 months
after purchase. See Exhibit C "Sales Charges."
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND
(ACTUAL) (SELLING FUND) CLASS A CLASS B CLASS C CLASS I CLASS R2 CLASS R3 CLASS R4 CLASS R5
Management fees(a)* 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84% 0.84%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.50% 0.25% 0.00% 0.00%
Other expenses(b) 0.56% 0.59% 0.57% 0.14% 0.43% 0.36% 0.45% 0.17%
Total annual fund operating expenses 1.65% 2.43% 2.41% 0.98% 1.77% 1.45% 1.29% 1.01%
Fee waiver/expense reimbursement 0.42% 0.42% 0.42% 0.20% 0.19% 0.12% 0.21% 0.18%
Total annual (net) fund operating expenses(c) 1.23% 2.01% 1.99% 0.78% 1.58% 1.33% 1.08% 0.83%
</Table>
9
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT) (CONTINUED)
<Table>
<Caption>
RIVERSOURCE MID CAP GROWTH FUND (ACTUAL)
(BUYING FUND) CLASS A CLASS B CLASS C CLASS I CLASS R2 CLASS R3 CLASS R4 CLASS R5
Management fees(d)* 0.58% 0.58% 0.58% 0.58% 0.58% 0.58% 0.58% 0.58%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.50% 0.25% 0.00% 0.00%
Other expenses(b) 0.33% 0.34% 0.34% 0.13% 0.42% 0.42% 0.42% 0.17%
Total annual fund operating expenses 1.16% 1.92% 1.92% 0.71% 1.50% 1.25% 1.00% 0.75%
Fee waiver/expense reimbursement 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.05% 0.00%
Total annual (net) fund operating expenses(e) 1.16% 1.92% 1.92% 0.71% 1.50% 1.25% 0.95% 0.75%
<Caption>
RIVERSOURCE MID CAP GROWTH FUND
(PRO FORMA COMBINED) CLASS A CLASS B CLASS C CLASS I CLASS R2 CLASS R3 CLASS R4 CLASS R5
Management fees(d)* 0.57% 0.57% 0.57% 0.57% 0.57% 0.57% 0.57% 0.57%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.50% 0.25% 0.00% 0.00%
Other expenses(b) 0.40% 0.42% 0.42% 0.12% 0.42% 0.42% 0.42% 0.17%
Total annual fund operating expenses 1.22% 1.99% 1.99% 0.69% 1.49% 1.24% 0.99% 0.74%
Fee waiver/expense reimbursement 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.04% 0.00%
Total annual (net) fund operating expenses(e)(f) 1.22% 1.99% 1.99% 0.69% 1.49% 1.24% 0.95% 0.74%
</Table>
(a) Includes the impact of a performance incentive adjustment fee that decreased
the management fee by 0.05% for the most recent fiscal year. The index
against which RiverSource Partners Aggressive Growth Fund's performance is
measured for purposes of determining the performance incentive adjustment is
the Lipper Mid-Cap Growth Funds Index.
(b) Other expenses include an administrative services fee, a transfer agency fee
(for all classes except Class I), a custody fee, other nonadvisory expenses,
and a plan administration services fee (for Class R2, Class R3 and Class
R4). Other expenses may also include fees and expenses of affiliated and
unaffiliated funds (acquired funds) which the Fund indirectly bears when it
invests in the acquired funds. The impact of these acquired funds' fees and
expenses for the most recent fiscal period was less than 0.01%. Because
acquired funds will have varied expense and fee levels and the Fund may own
different proportions of acquired funds at different times, the amount of
fees and expenses incurred by the Fund with respect to such investments will
vary.
(c) The investment manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until July 31, 2010, unless
sooner terminated at the discretion of RiverSource Partners Aggressive
Growth Fund's Board. Any amounts waived will not be reimbursed by the Fund.
Under this agreement, net fund expenses (excluding fees and expenses of
acquired funds), before giving effect to any performance incentive
adjustment, will not exceed 1.28% for Class A, 2.06% for Class B, 2.04% for
Class C, 0.83% for Class I, 1.63% for Class R2, 1.38% for Class R3,1.13% for
Class R4 and 0.88% for Class R5.
(d) Includes the impact of a performance incentive adjustment fee that decreased
the management fee by 0.12% for the most recent fiscal year. The index
against which RiverSource Mid Cap Growth Fund's performance is measured for
purposes of determining the performance incentive adjustment is the Lipper
Mid-Cap Growth Funds Index.
(e) The investment manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Nov. 30, 2009, unless
sooner terminated at the discretion of RiverSource Mid Cap Growth Fund's
Board. Any amounts waived will not be reimbursed by the Fund. Under this
agreement, net fund expenses (excluding fees and expenses of acquired
funds), before giving effect to any performance incentive adjustment, will
not exceed 1.07% for Class R4.
(f) Pending approval by shareholders of the proposed Reorganization, the
investment manager and its affiliates have agreed to waive certain fees and
expenses for one year following the effective date of the merger based on
the least of (i) the Buying Fund's expense ratio (before giving effect to
any performance incentive adjustment) as of its fiscal year-end on November
30, 2009; (ii) the Buying Fund's expense cap based on application of the
Buying Fund's Board's pricing philosophy, including the assets of both the
Buying Fund and the Selling Fund (see "Reasons for the Proposed
Reorganizations and Board Deliberations" for more information); or (iii) the
Selling Fund's current expense cap commitment pursuant to which net fund
expenses (excluding fees and expenses of acquired funds) before giving
effect to any performance incentive adjustment, will not exceed 1.28% for
Class A, 2.06% for Class B, 2.04% for Class C, 0.83% for Class I, 1.63% for
Class R2, 1.38% for Class R3, 1.13% for Class R4 and 0.88% for Class R5.
* The performance incentive adjustment agreements for the Selling Fund and the
Buying Fund are structured identically and are computed by comparing the
Fund's performance to the performance of an index of comparable funds
published by Lipper Inc., as noted above. In certain circumstances, the
Fund's Board may approve a change in the index. The maximum adjustment
(increase or decrease) is 0.12% of the average net assets on an annual
basis. The adjustment is determined monthly by measuring the percentage
differences over a rolling 12-month period between the performance of the
Fund and the change in the designated Lipper index. Additional information
on the calculation methodology is set forth in the Merger SAI.
10
EXPENSE EXAMPLES: These examples are intended to help you compare the cost of
investing in the Funds with the cost of investing in other mutual funds. These
examples assume that you invest $10,000 in the applicable Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods, both under the current arrangements and, for the Buying Fund, assuming
the proposed Reorganization had been in effect. These examples also assume that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same, except for any contractual fee waiver/expense reimbursement
that is reflected in these examples for only the first year. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<Table>
<Caption>
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (ACTUAL) (SELLING
FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $693 $1,027 $1,384 $2,389
Class B $704(b) $1,018(b)$1,459(b)$2,545(c)
Class C $302(b) $ 712 $1,249 $2,719
Class I $ 80 $ 292 $ 523 $1,188
Class R2 $161 $ 539 $ 943 $2,073
Class R3 $135 $ 447 $ 782 $1,730
Class R4 $110 $ 389 $ 688 $1,543
Class R5 $ 85 $ 304 $ 541 $1,225
<Caption>
RIVERSOURCE MID CAP GROWTH FUND (ACTUAL) (BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $686 $ 923 $1,177 $1,907
Class B $695(b) $ 903(b)$1,238(b)$2,050(c)
Class C $295(b) $ 603 $1,038 $2,248
Class I $ 73 $ 227 $ 396 $ 886
Class R2 $153 $ 474 $ 819 $1,796
Class R3 $127 $ 397 $ 687 $1,516
Class R4 $ 97 $ 314 $ 548 $1,225
Class R5 $ 77 $ 240 $ 418 $ 934
<Caption>
RIVERSOURCE MID CAP GROWTH FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $692 $ 940 $1,208 $1,972
Class B $702(b) $ 925(b)$1,274(b)$2,122(c)
Class C $302(b) $ 625 $1,074 $2,322
Class I $ 70 $ 221 $ 385 $ 862
Class R2 $152 $ 471 $ 814 $1,785
Class R3 $126 $ 394 $ 682 $1,505
Class R4 $ 97 $ 312 $ 544 $1,214
Class R5 $ 76 $ 237 $ 412 $ 922
</Table>
(a) Includes a 5.75% sales charge.
(b) Includes the applicable CDSC.
(c) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
If you owned or will own any class of shares other than Class B or Class C you
would pay the same costs shown in the tables above if you did not redeem your
shares at the end of the periods indicated. If you owned or will own Class B or
Class C shares, you would pay the following costs if you did not redeem your
shares at the end of the periods indicated, which may be different than the
costs shown in the tables above.
<Table>
<Caption>
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (ACTUAL) (SELLING
FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $204 $718 $1,259 $2,545(a)
Class C $202 $712 $1,249 $2,719
<Caption>
RIVERSOURCE MID CAP GROWTH FUND (ACTUAL) (BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $195 $603 $1,038 $2,050(a)
Class C $195 $603 $1,038 $2,248
<Caption>
RIVERSOURCE MID CAP GROWTH FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $202 $625 $1,074 $2,122(a)
Class C $202 $625 $1,074 $2,322
</Table>
(a) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
11
Portfolio Turnover. The Fund pays transaction costs, such as commissions, when
it buys and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the example, affect the Fund's
performance. During the most recent fiscal year, the Fund's portfolio turnover
rate was the following percentage of the average value of the Fund's portfolio:
<Table>
<Caption>
FUND PERCENTAGE OF THE AVERAGE VALUE OF THE FUND'S PORTFOLIO
RiverSource Partners Aggressive Growth Fund 179%
RiverSource Mid Cap Growth Fund 76%
</Table>
12
PROPOSAL 2. REORGANIZATION OF RIVERSOURCE PARTNERS SELECT VALUE FUND INTO
RIVERSOURCE MID CAP
VALUE FUND
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the Selling Fund or shares of the Buying Fund. The tables
also show pro forma fees and expenses of the Buying Fund assuming the proposed
Reorganization relating to the Buying Fund had been in effect at the beginning
of the most recent fiscal year. You may qualify for sales charge discounts on
Class A shares of a Fund if you and members of your household invest, or agree
to invest in the future, at least $50,000 in the RiverSource Family of Funds.
More information about these and other discounts is available from your
financial professional and under "Sales Charges" in Exhibit C of this proxy
statement/prospectus and under "Class A -- Calculation of the Sales Charge" in
the Fund's Statement of Additional Information (SAI).
Annual fund operating expenses are based on expenses incurred during the Fund's
most recently completed fiscal year, and are expressed as a percentage (expense
ratio) of the Fund's average net assets during the period. The tables have been
adjusted to reflect current fee schedules but have not been adjusted to reflect
the Fund's assets as of a different period or point in time, as asset levels
will fluctuate. As of the date of this proxy statement/prospectus, a Fund's net
assets may be lower or higher than the Fund's average net assets during the most
recently completed fiscal year. In general, a fund's annual operating expenses
will increase as the fund's assets decrease. Accordingly, the Fund's annual
operating expenses, if adjusted based on assets as of the date of this proxy
statement/prospectus, could be higher or lower than are expressed in the fee and
expense table below. The commitment by the investment manager and its affiliates
to waive fees and/or cap (reimburse) expenses limits the impact that any
decrease in the Fund's assets will have on its total annual (net) operating
expenses in the current fiscal year.
The fees and expenses below exclude the costs of this Reorganization, because
these will be paid for by the investment manager and its affiliates.
ACTUAL AND PRO FORMA FUND EXPENSES FOR THE MOST RECENT FISCAL YEAR
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE PARTNERS SELECT VALUE FUND (ACTUAL) (SELLING FUND) CLASS A CLASS B CLASS C CLASS I, R4
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
RIVERSOURCE MID CAP VALUE FUND (ACTUAL) (BUYING FUND)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
RIVERSOURCE MID CAP VALUE FUND (PRO FORMA COMBINED)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
</Table>
(a) A 1% contingent deferred sales charge ("CDSC") may be assessed on Class A
shares purchased without an initial sales charge and sold within 18 months
after purchase. See Exhibit C "Sales Charges."
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE PARTNERS SELECT VALUE FUND (ACTUAL)
(SELLING FUND) CLASS A CLASS B CLASS C CLASS I CLASS R4
Management fees(a)* 0.88% 0.88% 0.88% 0.88% 0.88%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.00%
Other expenses(b) 0.63% 0.64% 0.64% 0.28% 0.63%
Total annual fund operating expenses 1.76% 2.52% 2.52% 1.16% 1.51%
Fee waiver/expense reimbursement 0.38% 0.37% 0.38% 0.23% 0.28%
Total annual (net) fund operating expenses(c) 1.38% 2.15% 2.14% 0.93% 1.23%
<Caption>
RIVERSOURCE MID CAP VALUE FUND (ACTUAL) (BUYING
FUND) CLASS A CLASS B CLASS C CLASS I CLASS R4
Management fees(d)* 0.57% 0.57% 0.57% 0.57% 0.57%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.00%
Other expenses(b) 0.37% 0.39% 0.38% 0.10% 0.40%
Total annual fund operating expenses 1.19% 1.96% 1.95% 0.67% 0.97%
</Table>
13
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT) (CONTINUED)
<Table>
<Caption>
RIVERSOURCE MID CAP VALUE FUND
(PRO FORMA COMBINED) CLASS A CLASS B CLASS C CLASS I CLASS R4
Management fees(d)* 0.57% 0.57% 0.57% 0.57% 0.57%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.00%
Other expenses(b) 0.38% 0.41% 0.39% 0.10% 0.40%
Total annual fund operating expenses(e) 1.20% 1.98% 1.96% 0.67% 0.97%
</Table>
(a) Includes the impact of a performance incentive adjustment fee that increased
the management fee by 0.10% for the most recent fiscal year. The index
against which RiverSource Partners Select Value Fund's performance is
measured for purposes of determining the performance incentive adjustment is
the Lipper Mid-Cap Value Funds Index.
(b) Other expenses include an administrative services fee, a transfer agency fee
(for all classes except Class I), a custody fee, other nonadvisory expenses,
and a plan administration services fee (for Class R4). Other expenses may
also include fees and expenses of affiliated and unaffiliated funds
(acquired funds) which the Fund indirectly bears when it invests in the
acquired funds. The impact of these acquired funds' fees and expenses for
the most recent fiscal period was less than 0.01%. Because acquired funds
will have varied expense and fee levels and the Fund may own different
proportions of acquired funds at different times, the amount of fees and
expenses incurred by the Fund with respect to such investments will vary.
(c) The investment manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until July 31, 2010, unless
sooner terminated at the discretion of RiverSource Partners Select Value
Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under
this agreement, net fund expenses (excluding fees and expenses of acquired
funds), before giving effect to any performance incentive adjustment, will
not exceed 1.28% for Class A, 2.05% for Class B, 2.04% for Class C, 0.83%
for Class I and 1.13% for Class R4.
(d) Includes the impact of a performance incentive adjustment fee that decreased
the management fee by 0.12% for the most recent fiscal year. The index
against which RiverSource Mid Cap Value Fund's performance is measured for
purposes of determining the performance incentive adjustment is the Lipper
Mid-Cap Value Funds Index.
(e) Pending approval by shareholders of the proposed Reorganization, the
investment manager and its affiliates have agreed to waive certain fees and
expenses for one year following the effective date of the merger based on
the least of (i) the Buying Fund's expense ratio (before giving effect to
any performance incentive adjustment) as of its fiscal year-end on September
30, 2009 which was 1.31% for Class A, 2.08% for Class B, 2.07% for Class C,
0.79% for Class I, and 1.09% for Class R4; or (ii) the Buying Fund's expense
cap based on application of the Buying Fund's Board's pricing philosophy,
including the assets of both the Buying Fund and the Selling Fund. See
"Reasons for the Proposed Reorganizations and Board Deliberations" for more
information.
* The performance incentive adjustment agreements for the Selling Fund and the
Buying Fund are structured identically and are computed by comparing the
Fund's performance to the performance of an index of comparable funds
published by Lipper Inc., as noted above. In certain circumstances, the
Fund's Board may approve a change in the index. The maximum adjustment
(increase or decrease) is 0.12% of the average net assets on an annual
basis. The adjustment is determined monthly by measuring the percentage
differences over a rolling 12-month period between the performance of the
Fund and the change in the designated Lipper index. Additional information
on the calculation methodology is set forth in the Merger SAI.
EXPENSE EXAMPLES: These examples are intended to help you compare the cost of
investing in the Funds with the cost of investing in other mutual funds. These
examples assume that you invest $10,000 in the applicable Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods, both under the current arrangements and, for the Buying Fund, assuming
the proposed Reorganization had been in effect. These examples also assume that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same, except for any contractual fee waiver/expense reimbursement
that is reflected in these examples for only the first year. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<Table>
<Caption>
RIVERSOURCE PARTNERS SELECT VALUE FUND (ACTUAL) (SELLING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $707 $1,063 $1,442 $2,504
Class B $718(b) $1,050(b)$1,508(b)$2,645(c)
Class C $317(b) $ 749 $1,307 $2,832
Class I $ 95 $ 346 $ 617 $1,393
Class R4 $125 $ 450 $ 798 $1,783
<Caption>
RIVERSOURCE MID CAP VALUE FUND (ACTUAL) (BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $689 $ 931 $1,193 $1,940
Class B $699(b) $ 916(b)$1,258(b)$2,090(c)
Class C $298(b) $ 613 $1,053 $2,280
Class I $ 68 $ 215 $ 374 $ 838
Class R4 $ 99 $ 309 $ 537 $1,194
<Caption>
RIVERSOURCE MID CAP VALUE FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $690 $ 934 $1,198 $1,951
Class B $701(b) $ 922(b)$1,268(b)$2,109(c)
Class C $299(b) $ 616 $1,058 $2,290
Class I $ 68 $ 215 $ 374 $ 838
Class R4 $ 99 $ 309 $ 537 $1,194
</Table>
(a) Includes a 5.75% sales charge.
(b) Includes the applicable CDSC.
(c) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
If you owned or will own any class of shares other than Class B or Class C you
would pay the same costs shown in the tables above if you did not redeem your
shares at the end of the periods indicated. If you owned or will own Class B or
Class C
14
shares, you would pay the following costs if you did not redeem your shares at
the end of the periods indicated, which may be different than the costs shown in
the tables above.
<Table>
<Caption>
RIVERSOURCE PARTNERS SELECT VALUE FUND (ACTUAL) (SELLING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $218 $750 $1,308 $2,645(a)
Class C $217 $749 $1,307 $2,832
<Caption>
RIVERSOURCE MID CAP VALUE FUND (ACTUAL) (BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $199 $616 $1,058 $2,090(a)
Class C $198 $613 $1,053 $2,280
<Caption>
RIVERSOURCE MID CAP VALUE FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $201 $622 $1,068 $2,109(a)
Class C $199 $616 $1,058 $2,290
</Table>
(a) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
Portfolio Turnover. The Fund pays transaction costs, such as commissions, when
it buys and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the example, affect the Fund's
performance. During the most recent fiscal year, the Fund's portfolio turnover
rate was the following percentage of the average value of the Fund's portfolio:
<Table>
<Caption>
FUND PERCENTAGE OF THE AVERAGE VALUE OF THE FUND'S PORTFOLIO
RiverSource Partners Select Value Fund 118%
RiverSource Mid Cap Value Fund 42%
</Table>
15
PROPOSAL 3. REORGANIZATION OF RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND INTO
SELIGMAN SMALLER-CAP VALUE FUND
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the Selling Fund or shares of the Buying Fund. The tables
also show pro forma fees and expenses of the Buying Fund assuming the proposed
Reorganization relating to the Buying Fund had been in effect at the beginning
of the most recent fiscal year. You may qualify for sales charge discounts on
Class A shares of a Fund if you and members of your household invest, or agree
to invest in the future, at least $50,000 in the RiverSource Family of Funds.
More information about these and other discounts is available from your
financial professional and under "Sales Charges" in Exhibit C of this proxy
statement/prospectus and under "Class A -- Calculation of the Sales Charge" in
the Fund's Statement of Additional Information (SAI).
Annual fund operating expenses are based on expenses incurred during the Fund's
most recently completed fiscal year, and are expressed as a percentage (expense
ratio) of the Fund's average net assets during the period. The tables have been
adjusted to reflect current fee schedules but have not been adjusted to reflect
the Fund's assets as of a different period or point in time, as asset levels
will fluctuate. As of the date of this proxy statement/prospectus, a Fund's net
assets may be lower or higher than the Fund's average net assets during the most
recently completed fiscal year. In general, a fund's annual operating expenses
will increase as the fund's assets decrease. Accordingly, the Fund's annual
operating expenses, if adjusted based on assets as of the date of this proxy
statement/prospectus, could be higher or lower than are expressed in the fee and
expense table below. The commitment by the investment manager and its affiliates
to waive fees and/or cap (reimburse) expenses limits the impact that any
decrease in the Fund's assets will have on its total annual (net) operating
expenses in the current fiscal year.
The fees and expenses below exclude the costs of this Reorganization, because
these will be paid for by the investment manager and its affiliates.
ACTUAL AND PRO FORMA FUND EXPENSES FOR THE MOST RECENT FISCAL YEAR
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND(ACTUAL) (SELLING
FUND) CLASS A CLASS B CLASS C CLASS I, R4
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
SELIGMAN SMALLER-CAP VALUE FUND (ACTUAL) (BUYING FUND)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
SELIGMAN SMALLER-CAP VALUE FUND (PRO FORMA COMBINED)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
</Table>
(a) A 1% contingent deferred sales charge ("CDSC") may be assessed on Class A
shares purchased without an initial sales charge and sold within 18 months
after purchase. See Exhibit C "Sales Charges."
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND
(ACTUAL) (SELLING FUND) CLASS A CLASS B CLASS C CLASS I CLASS R4
Management fees(a) 0.92% 0.92% 0.92% 0.92% 0.92%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.00%
Other expenses(b) 0.59% 0.61% 0.60% 0.25% 0.55%
Total annual fund operating expenses 1.76% 2.53% 2.52% 1.17% 1.47%
Fee waiver/expense reimbursement 0.48% 0.48% 0.48% 0.34% 0.34%
Total annual (net) fund operating expenses(c) 1.28% 2.05% 2.04% 0.83% 1.13%
Acquired fund fees and expenses(d) 0.02% 0.02% 0.02% 0.02% 0.02%
Total fund and acquired fund fees and expenses(d) 1.30% 2.07% 2.06% 0.85% 1.15%
</Table>
16
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT) (CONTINUED)
<Table>
<Caption>
SELIGMAN SMALLER-CAP VALUE FUND (ACTUAL) (BUYING
FUND) CLASS A CLASS B CLASS C CLASS I CLASS R4
Management fees 0.94% 0.94% 0.94% 0.94% 0.94%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.00%
Other expenses(e) 0.61% 0.64% 0.62% 0.21% 0.51%
Total annual fund operating expenses 1.80% 2.58% 2.56% 1.15% 1.45%
Fee waiver/expense reimbursement 0.47% 0.48% 0.47% 0.27% 0.27%
Total annual (net) fund operating expenses(f) 1.33% 2.10% 2.09% 0.88% 1.18%
<Caption>
SELIGMAN SMALLER-CAP VALUE FUND (PRO FORMA
COMBINED) CLASS A CLASS B CLASS C CLASS I CLASS R4
Management fees 0.94% 0.94% 0.94% 0.94% 0.94%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.00%
Other expenses(e) 0.59% 0.62% 0.63% 0.21% 0.51%
Total annual fund operating expenses 1.78% 2.56% 2.57% 1.15% 1.45%
Fee waiver/expense reimbursement 0.45% 0.46% 0.48% 0.27% 0.27%
Total annual (net) fund operating expenses(f)(g) 1.33% 2.10% 2.09% 0.88% 1.18%
</Table>
(a) Includes the impact of a performance incentive adjustment fee that decreased
the management fee by 0.05% for the most recent fiscal year. The index
against which RiverSource Partners Small Cap Equity Fund's performance is
measured for purposes of determining the performance incentive adjustment is
the Lipper Small-Cap Core Funds Index. In certain circumstances, the Fund's
Board may approve a change in the index. The maximum adjustment (increase or
decrease) is 0.12% of the average net assets on an annual basis. The
adjustment is determined monthly by measuring the percentage difference over
a rolling 12-month period between the performance of the Fund and the change
in the designated Lipper index. Additional information on the calculation
methodology is set forth in the Fund's Merger SAI.
(b) Other expenses include an administrative services fee, a transfer agency fee
(for all classes except Class I), a custody fee, other non-advisory expenses
and a plan administration services fee (for Class R4).
(c) The investment manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until July 31, 2010, unless
sooner terminated at the discretion of RiverSource Partners Small Cap Equity
Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under
this agreement, net fund expenses (excluding fees and expenses of acquired
funds), before giving effect to any performance incentive adjustment, will
not exceed 1.33% for Class A, 2.10% for Class B, 2.09% for Class C, 0.88%
for Class I and 1.18% for Class R4.
(d) In addition to the Fund's total annual operating expenses that the Fund
bears directly, the Fund's shareholders indirectly bear the expenses of the
acquired funds (affiliated and unaffiliated funds) in which the Fund
invests. The Fund's "Acquired fund fees and expenses," based on its
investment in the acquired funds, is as shown.
(e) Other expenses include an administrative services fee, a transfer agency fee
(for all classes except Class I), a custody fee, other nonadvisory expenses,
and a plan administration services fee (for Class R4). Other expenses may
also include fees and expenses of affiliated and unaffiliated funds
(acquired funds) which the Fund indirectly bears when it invests in the
acquired funds. The impact of these acquired funds' fees and expenses for
the most recent fiscal period was less than 0.01%. Because acquired funds
will have varied expense and fee levels and the Fund may own different
proportions of acquired funds at different times, the amount of fees and
expenses incurred by the Fund with respect to such investments will vary.
(f) The investment manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Sept. 11, 2010, unless
sooner terminated at the discretion of Seligman Smaller-Cap Value Fund's
Board. Any amounts waived will not be reimbursed by the Fund. Under this
agreement, net fund expenses (excluding fees and expenses of acquired funds)
will not exceed 1.33% for Class A, 2.10% for Class B, 2.09% for Class C,
0.88% for Class I and 1.18% for Class R4. Pending approval by shareholders
of the proposed Reorganization, this agreement will be replaced by the
agreement discussed in footnote (g) below.
(g) Pending approval by shareholders of the proposed Reorganization, the
investment manager and its affiliates have agreed to waive certain fees and
expenses for one year following the effective date of the merger based on
the least of (i) the Buying Fund's expense ratio (before giving effect to
any performance incentive adjustment) as of its fiscal year-end on December
31, 2009; (ii) the Buying Fund's expense cap based on application of the
Buying Fund's Board's pricing philosophy, including the assets of both the
Buying Fund and the Selling Fund (see "Reasons for the Proposed
Reorganizations and Board Deliberations" for more information); or (iii) the
Selling Fund's current expense cap commitment pursuant to which net fund
expenses (excluding fees and expenses of acquired funds) before giving
effect to any performance incentive adjustment, will not exceed 1.33% for
Class A, 2.10% for Class B, 2.09% for Class C, 0.88% for Class I, and 1.18%
for Class R4.
EXPENSE EXAMPLES: These examples are intended to help you compare the cost of
investing in the Funds with the cost of investing in other mutual funds. These
examples assume that you invest $10,000 in the applicable Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods, both under the current arrangements and, for the Buying Fund, assuming
the proposed Reorganization had been in effect. These examples also assume that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same, except for any contractual fee waiver/expense reimbursement
that is reflected in these examples for only the first year. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<Table>
<Caption>
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (ACTUAL) (SELLING
FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $700 $1,059 $1,443 $2,517
Class B $710(b) $1,048(b)$1,513(b)$2,664(c)
Class C $309(b) $ 745 $1,308 $2,844
Class I $ 87 $ 344 $ 623 $1,418
Class R4 $117 $ 438 $ 782 $1,756
</Table>
17
<Table>
<Caption>
SELIGMAN SMALLER-CAP VALUE FUND (ACTUAL) (BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $703 $1,066 $1,454 $2,538
Class B $713(b) $1,057(b)$1,528(b)$2,692(c)
Class C $312(b) $ 752 $1,319 $2,864
Class I $ 90 $ 339 $ 608 $1,378
Class R4 $120 $ 432 $ 768 $1,717
<Caption>
SELIGMAN SMALLER-CAP VALUE FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $703 $1,062 $1,445 $2,519
Class B $713(b) $1,053(b)$1,520(b)$2,673(c)
Class C $312(b) $ 754 $1,323 $2,874
Class I $ 90 $ 339 $ 608 $1,378
Class R4 $120 $ 432 $ 768 $1,717
</Table>
(a) Includes a 5.75% sales charge.
(b) Includes the applicable CDSC.
(c) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
If you owned or will own any class of shares other than Class B or Class C you
would pay the same costs shown in the tables above if you did not redeem your
shares at the end of the periods indicated. If you owned or will own Class B or
Class C shares, you would pay the following costs if you did not redeem your
shares at the end of the periods indicated, which may be different than the
costs shown in the tables above.
<Table>
<Caption>
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (ACTUAL) (SELLING
FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $210 $748 $1,313 $2,664(a)
Class C $209 $745 $1,308 $2,844
<Caption>
SELIGMAN SMALLER-CAP VALUE FUND (ACTUAL) (BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $213 $757 $1,328 $2,692(a)
Class C $212 $752 $1,319 $2,864
<Caption>
SELIGMAN SMALLER-CAP VALUE FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $213 $753 $1,320 $2,673(a)
Class C $212 $754 $1,323 $2,874
</Table>
(a) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
Portfolio Turnover. The Fund pays transaction costs, such as commissions, when
it buys and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the example, affect the Fund's
performance. During the most recent fiscal year, the Fund's portfolio turnover
rate was the following percentage of the average value of the Fund's portfolio:
<Table>
<Caption>
FUND PERCENTAGE OF THE AVERAGE VALUE OF THE FUND'S PORTFOLIO
RiverSource Partners Small Cap Equity Fund 67%
Seligman Smaller-Cap Value Fund 16%
</Table>
18
PROPOSAL 4. REORGANIZATION OF RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND INTO
SELIGMAN FRONTIER FUND
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the Selling Fund or shares of the Buying Fund. The tables
also show pro forma fees and expenses of the Buying Fund assuming the proposed
Reorganization relating to the Buying Fund had been in effect at the beginning
of the most recent fiscal year. You may qualify for sales charge discounts on
Class A shares of a Fund if you and members of your household invest, or agree
to invest in the future, at least $50,000 in the RiverSource Family of Funds.
More information about these and other discounts is available from your
financial professional and under "Sales Charges" in Exhibit C of this proxy
statement/prospectus and under "Class A -- Calculation of the Sales Charge" in
the Fund's Statement of Additional Information (SAI).
Annual fund operating expenses are based on expenses incurred during the Fund's
most recently completed fiscal year, and are expressed as a percentage (expense
ratio) of the Fund's average net assets during the period. The tables have been
adjusted to reflect current fee schedules but have not been adjusted to reflect
the Fund's assets as of a different period or point in time, as asset levels
will fluctuate. As of the date of this proxy statement/prospectus, a Fund's net
assets may be lower or higher than the Fund's average net assets during the most
recently completed fiscal year. In general, a fund's annual operating expenses
will increase as the fund's assets decrease. Accordingly, the Fund's annual
operating expenses, if adjusted based on assets as of the date of this proxy
statement/prospectus, could be higher or lower than are expressed in the fee and
expense table below. The commitment by the investment manager and its affiliates
to waive fees and/or cap (reimburse) expenses limits the impact that any
decrease in the Fund's assets will have on its total annual (net) operating
expenses in the current fiscal year.
The fees and expenses below exclude the costs of this Reorganization, because
these will be paid for by the investment manager and its affiliates.
ACTUAL AND PRO FORMA FUND EXPENSES FOR THE MOST RECENT FISCAL YEAR
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (ACTUAL) (SELLING CLASS I, R2,
FUND) CLASS A CLASS B CLASS C R3, R4, R5
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
SELIGMAN FRONTIER FUND (ACTUAL) (BUYING FUND)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
SELIGMAN FRONTIER FUND (PRO FORMA COMBINED)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
</Table>
(a) A 1% contingent deferred sales charge ("CDSC") may be assessed on Class A
shares purchased without an initial sales charge and sold within 18 months
after purchase. See Exhibit C "Sales Charges."
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND
(ACTUAL) (SELLING FUND) CLASS A CLASS B CLASS C CLASS I CLASS R2 CLASS R3 CLASS R4 CLASS R5
Management fees(a) 0.94% 0.94% 0.94% 0.94% 0.94% 0.94% 0.94% 0.94%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.50% 0.25% 0.00% 0.00%
Other expenses(b) 0.82% 0.83% 0.83% 0.40% 0.70% 0.72% 0.70% 0.46%
Total annual fund operating expenses 2.01% 2.77% 2.77% 1.34% 2.14% 1.91% 1.64% 1.40%
Fee waiver/expense reimbursement 0.48% 0.46% 0.47% 0.26% 0.26% 0.28% 0.26% 0.27%
Total annual (net) fund operating expenses(c) 1.53% 2.31% 2.30% 1.08% 1.88% 1.63% 1.38% 1.13%
</Table>
19
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT) (CONTINUED)
<Table>
<Caption>
SELIGMAN FRONTIER FUND (ACTUAL) (BUYING FUND) CLASS A CLASS B CLASS C CLASS I CLASS R2 CLASS R3 CLASS R4 CLASS R5
Management fees 0.89% 0.89% 0.89% 0.89% 0.89% 0.89% 0.89% 0.89%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.50% 0.25% 0.00% 0.00%
Other expenses(b) 0.89% 0.93% 0.90% 0.46% 0.76% 0.76% 0.76% 0.51%
Total annual fund operating expenses 2.03% 2.82% 2.79% 1.35% 2.15% 1.90% 1.65% 1.40%
Fee waiver/expense reimbursement 0.52% 0.53% 0.51% 0.29% 0.29% 0.29% 0.29% 0.29%
Total annual (net) fund operating expenses(d) 1.51% 2.29% 2.28% 1.06% 1.86% 1.61% 1.36% 1.11%
<Caption>
SELIGMAN FRONTIER FUND (PRO FORMA COMBINED) CLASS A CLASS B CLASS C CLASS I CLASS R2 CLASS R3 CLASS R4 CLASS R5
Management fees 0.89% 0.89% 0.89% 0.89% 0.89% 0.89% 0.89% 0.89%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.00% 0.50% 0.25% 0.00% 0.00%
Other expenses(b) 0.91% 0.93% 0.92% 0.46% 0.76% 0.76% 0.76% 0.51%
Total annual fund operating expenses 2.05% 2.82% 2.81% 1.35% 2.15% 1.90% 1.65% 1.40%
Fee waiver/expense reimbursement 0.54% 0.53% 0.53% 0.29% 0.29% 0.29% 0.29% 0.29%
Total annual (net) fund operating expenses(d) 1.51% 2.29% 2.28% 1.06% 1.86% 1.61% 1.36% 1.11%
</Table>
(a) Includes the impact of a performance incentive adjustment fee that increased
the management fee by 0.02% for the most recent fiscal year. The index
against which RiverSource Partners Small Cap Growth Fund's performance is
measured for purposes of determining the performance incentive adjustment is
the Lipper Small-Cap Growth Funds Index. In certain circumstances, the
Fund's Board may approve a change in the index. The maximum adjustment
(increase or decrease) is 0.12% of the average net assets on an annual
basis. The adjustment is determined monthly by measuring the percentage
difference over a rolling 12-month period between the performance of the
Fund and the change in the designated Lipper index. Additional information
on the calculation methodology is set forth in the Fund's Merger SAI.
(b) Other expenses include an administrative services fee, a transfer agency fee
(for all classes except Class I), a custody fee, other nonadvisory expenses,
and a plan administration services fee (for Class R2, Class R3 and Class
R4). Other expenses may also include fees and expenses of affiliated and
unaffiliated funds (acquired funds) which the Fund indirectly bears when it
invests in the acquired funds. The impact of these acquired funds' fees and
expenses for the most recent fiscal period was less than 0.01%. Because
acquired funds will have varied expense and fee levels and the Fund may own
different proportions of acquired funds at different times, the amount of
fees and expenses incurred by the Fund with respect to such investments will
vary.
(c) The investment manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until May 31, 2010, unless
sooner terminated at the discretion of RiverSource Partners Small Cap Growth
Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under
this agreement, net fund expenses (excluding fees and expenses of acquired
funds), before giving effect to any performance incentive adjustment, will
not exceed 1.51% for Class A, 2.29% for Class B, 2.28% for Class C, 1.06%
for Class I, 1.86% for Class R2, 1.61% for Class R3, 1.36% for Class R4 and
1.11% for Class R5.
(d) The investment manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Dec. 31, 2010, unless
sooner terminated at the discretion of Seligman Frontier Fund's Board. Any
amounts waived will not be reimbursed by the Fund. Under this agreement, net
fund expenses (excluding fees and expenses of acquired funds) will not
exceed 1.51% for Class A, 2.29% for Class B, 2.28% for Class C, 1.06% for
Class I, 1.86% for Class R2, 1.61% for Class R3, 1.36% for Class R4 and
1.11% for Class R5.
EXPENSE EXAMPLES: These examples are intended to help you compare the cost of
investing in the Funds with the cost of investing in other mutual funds. These
examples assume that you invest $10,000 in the applicable Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods, both under the current arrangements and, for the Buying Fund, assuming
the proposed Reorganization had been in effect. These examples also assume that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same, except for any contractual fee waiver/expense reimbursement
that is reflected in these examples for only the first year. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<Table>
<Caption>
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (ACTUAL) (SELLING
FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $722 $1,126 $1,555 $2,747
Class B $734(b) $1,116(b)$1,625(b)$2,887(c)
Class C $333(b) $ 815 $1,424 $3,069
Class I $110 $ 399 $ 710 $1,595
Class R2 $191 $ 645 $1,126 $2,457
Class R3 $166 $ 573 $1,007 $2,215
Class R4 $140 $ 492 $ 868 $1,927
Class R5 $115 $ 417 $ 741 $1,662
</Table>
20
<Table>
<Caption>
SELIGMAN FRONTIER FUND (ACTUAL) (BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $720 $1,128 $1,561 $2,764
Class B $732(b) $1,124(b)$1,643(b)$2,924(c)
Class C $331(b) $ 817 $1,430 $3,086
Class I $108 $ 399 $ 713 $1,604
Class R2 $189 $ 645 $1,129 $2,465
Class R3 $164 $ 569 $1,001 $2,204
Class R4 $138 $ 492 $ 871 $1,935
Class R5 $113 $ 415 $ 739 $1,660
<Caption>
SELIGMAN FRONTIER FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $720 $1,132 $1,569 $2,782
Class B $732(b) $1,124(b)$1,643(b)$2,928(b)
Class C $331(b) $ 821 $1,438 $3,103
Class I $108 $ 399 $ 713 $1,604
Class R2 $189 $ 645 $1,129 $2,465
Class R3 $164 $ 569 $1,001 $2,204
Class R4 $138 $ 492 $ 871 $1,935
Class R5 $113 $ 415 $ 739 $1,660
</Table>
(a) Includes a 5.75% sales charge.
(b) Includes the applicable CDSC.
(c) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
If you owned or will own any class of shares other than Class B or Class C you
would pay the same costs shown in the tables above if you did not redeem your
shares at the end of the periods indicated. If you owned or will own Class B or
Class C shares, you would pay the following costs if you did not redeem your
shares at the end of the periods indicated, which may be different than the
costs shown in the tables above.
<Table>
<Caption>
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (ACTUAL) (SELLING
FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $234 $816 $1,425 $2,887(a)
Class C $233 $815 $1,424 $3,069
<Caption>
SELIGMAN FRONTIER FUND (ACTUAL) (BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $232 $824 $1,443 $2,924(a)
Class C $231 $817 $1,430 $3,086
<Caption>
SELIGMAN FRONTIER FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $232 $824 $1,443 $2,928(a)
Class C $231 $821 $1,438 $3,103
</Table>
(a) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
Portfolio Turnover. The Fund pays transaction costs, such as commissions, when
it buys and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the example, affect the Fund's
performance. During the most recent fiscal year, the Fund's portfolio turnover
rate was the following percentage of the average value of the Fund's portfolio:
<Table>
<Caption>
FUND PERCENTAGE OF THE AVERAGE VALUE OF THE FUND'S PORTFOLIO
RiverSource Partners Small Cap Growth Fund 133%
Seligman Frontier Fund 156%
</Table>
21
PROPOSAL 5. REORGANIZATION OF SELIGMAN GLOBAL SMALLER COMPANIES FUND INTO
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the Selling Fund or shares of the Buying Fund. The tables
also show pro forma fees and expenses of the Buying Fund assuming the proposed
Reorganization relating to the Buying Fund had been in effect at the beginning
of the most recent fiscal year. You may qualify for sales charge discounts on
Class A shares of a Fund if you and members of your household invest, or agree
to invest in the future, at least $50,000 in the RiverSource Family of Funds.
More information about these and other discounts is available from your
financial professional and under "Sales Charges" in Exhibit C of this proxy
statement/prospectus and under "Class A -- Calculation of the Sales Charge" in
the Fund's Statement of Additional Information (SAI).
Annual fund operating expenses are based on expenses incurred during the Fund's
most recently completed fiscal year, and are expressed as a percentage (expense
ratio) of the Fund's average net assets during the period. The tables have been
adjusted to reflect current fee schedules but have not been adjusted to reflect
the Fund's assets as of a different period or point in time, as asset levels
will fluctuate. As of the date of this proxy statement/prospectus, a Fund's net
assets may be lower or higher than the Fund's average net assets during the most
recently completed fiscal year. In general, a fund's annual operating expenses
will increase as the fund's assets decrease. Accordingly, the Fund's annual
operating expenses, if adjusted based on assets as of the date of this proxy
statement/prospectus, could be higher or lower than are expressed in the fee and
expense table below. The commitment by the investment manager and its affiliates
to waive fees and/or cap (reimburse) expenses limits the impact that any
decrease in the Fund's assets will have on its total annual (net) operating
expenses in the current fiscal year.
The fees and expenses below exclude the costs of this Reorganization, because
these will be paid for by the investment manager and its affiliates.
ACTUAL AND PRO FORMA FUND EXPENSES FOR THE MOST RECENT FISCAL YEAR
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<Table>
<Caption>
SELIGMAN GLOBAL SMALLER COMPANIES FUND (ACTUAL) (SELLING
FUND) CLASS A CLASS B CLASS C CLASS R2, R5
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (ACTUAL)
(BUYING FUND)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND(PRO FORMA
COMBINED)
Maximum sales charge (load) imposed on purchases
(as a percentage of offering price) 5.75% None None None
Maximum deferred sales charge (load) imposed on sales
(as a percentage of offering price at time of purchase) None(a) 5% 1% None
</Table>
(a) A 1% contingent deferred sales charge ("CDSC") may be assessed on Class A
shares purchased without an initial sales charge and sold within 18 months
after purchase. See Exhibit C "Sales Charges."
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT)
<Table>
<Caption>
SELIGMAN GLOBAL SMALLER COMPANIES FUND (ACTUAL)
(SELLING FUND) CLASS A CLASS B CLASS C CLASS R2 CLASS R5
Management fees 0.90% 0.90% 0.90% 0.90% 0.90%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.50% 0.00%
Other expenses(a) 0.73% 0.76% 0.74% 0.66% 0.41%
Total annual fund operating expenses 1.88% 2.66% 2.64% 2.06% 1.31%
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
(ACTUAL) (BUYING FUND) CLASS A CLASS B CLASS C CLASS R2 CLASS R5
Management fees(b) 1.07% 1.07% 1.07% 1.07% 1.07%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.50% 0.00%
Other expenses(a) 0.65% 0.66% 0.66% 0.68% 0.43%
Total annual fund operating expenses 1.97% 2.73% 2.73% 2.25% 1.50%
Fee waiver/expense reimbursement 0.26% 0.25% 0.26% 0.19% 0.19%
Total annual (net) fund operating expenses(c) 1.71% 2.48% 2.47% 2.06% 1.31%
</Table>
22
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT) (CONTINUED)
<Table>
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
(PRO FORMA COMBINED) CLASS A CLASS B CLASS C CLASS R2 CLASS R5
Management fees(b) 1.07% 1.07% 1.07% 1.07% 1.07%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.50% 0.00%
Other expenses(a) 0.71% 0.70% 0.76% 0.66% 0.41%
Total annual fund operating expenses 2.03% 2.77% 2.83% 2.23% 1.48%
Fee waiver/expense reimbursement 0.32% 0.29% 0.36% 0.17% 0.17%
Total annual (net) fund operating expenses(c) 1.71% 2.48% 2.47% 2.06% 1.31%
</Table>
(a) Other expenses include an administrative services fee, a transfer agency
fee, a custody fee, other nonadvisory expenses, and a plan administration
services fee (for Class R2). Other expenses may also include fees and
expenses of affiliated and unaffiliated funds (acquired funds) which the
Fund indirectly bears when it invests in the acquired funds. The impact of
these acquired funds' fees and expenses for the most recent fiscal period
was less than 0.01%. Because acquired funds will have varied expense and fee
levels and the Fund may own different proportions of acquired funds at
different times, the amount of fees and expenses incurred by the Fund with
respect to such investments will vary.
(b) Includes the impact of a performance incentive adjustment fee that decreased
the management fee by 0.05% for the most recent fiscal year. The index
against which RiverSource Partners International Small Cap Fund's
performance is measured for purposes of determining the performance
incentive adjustment is the Lipper International Small-Cap Funds Index. In
certain circumstances, the Fund's Board may approve a change in the index.
The maximum adjustment (increase or decrease) is 0.12% of the average net
assets on an annual basis. The adjustment is determined monthly by measuring
the percentage difference over a rolling 12-month period between the
performance of the Fund and the change in the designated Lipper index.
Additional information on the calculation methodology is set forth in the
Fund's Merger SAI.
(c) The investment manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until Oct. 31, 2009, unless
sooner terminated at the discretion of RiverSource Partners International
Small Cap Fund's Board. Any amounts waived will not be reimbursed by the
Fund. Under this agreement, net fund expenses (excluding fees and expenses
of acquired funds), before giving effect to any performance incentive
adjustment, will not exceed 1.76% for Class A, 2.53% for Class B, 2.52% for
Class C, 2.11% for Class R2 and 1.36% for Class R5.
EXPENSE EXAMPLES: These examples are intended to help you compare the cost of
investing in the Funds with the cost of investing in other mutual funds. These
examples assume that you invest $10,000 in the applicable Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods, both under the current arrangements and, for the Buying Fund, assuming
the proposed Reorganization had been in effect. These examples also assume that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same, except for any contractual fee waiver/expense reimbursement
that is reflected in these examples for only the first year. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<Table>
<Caption>
SELIGMAN GLOBAL SMALLER COMPANIES FUND (ACTUAL) (SELLING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $755 $1,132 $1,534 $2,654
Class B $769(b) $1,127(b)$1,611(b)$2,808(c)
Class C $367(b) $ 821 $1,401 $2,977
Class R2 $209 $ 646 $1,109 $2,394
Class R5 $133 $ 415 $ 719 $1,584
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (ACTUAL)
(BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $739 $1,134 $1,555 $2,724
Class B $751(b) $1,124(b)$1,623(b)$2,863(c)
Class C $350(b) $ 823 $1,422 $3,046
Class R2 $209 $ 685 $1,189 $2,575
Class R5 $133 $ 456 $ 802 $1,779
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (PRO FORMA
COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $739 $1,146 $1,578 $2,779
Class B $751(b) $1,132(b)$1,640(b)$2,904(c)
Class C $350(b) $ 843 $1,463 $3,135
Class R2 $209 $ 681 $1,180 $2,556
Class R5 $133 $ 452 $ 793 $1,759
</Table>
(a) Includes a 5.75% sales charge.
(b) Includes the applicable CDSC.
(c) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
23
If you owned or will own any class of shares other than Class B or Class C you
would pay the same costs shown in the tables above if you did not redeem your
shares at the end of the periods indicated. If you owned or will own Class B or
Class C shares, you would pay the following costs if you did not redeem your
shares at the end of the periods indicated, which may be different than the
costs shown in the tables above.
<Table>
<Caption>
SELIGMAN GLOBAL SMALLER COMPANIES FUND (ACTUAL) (SELLING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $269 $827 $1,411 $2,808(a)
Class C $267 $821 $1,401 $2,977
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (ACTUAL)
(BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $251 $824 $1,423 $2,863(a)
Class C $250 $823 $1,422 $3,046
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (PRO FORMA
COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $251 $832 $1,440 $2,904(a)
Class C $250 $843 $1,463 $3,135
</Table>
(a) Based on conversion of Class B shares to Class A shares one month after the
completion of the eighth year of ownership.
Portfolio Turnover. The Fund pays transaction costs, such as commissions, when
it buys and sells securities (or "turns over" its portfolio). A higher portfolio
turnover rate may indicate higher transaction costs and may result in higher
taxes when Fund shares are held in a taxable account. These costs, which are not
reflected in annual fund operating expenses or in the example, affect the Fund's
performance. During the most recent fiscal year, the Fund's portfolio turnover
rate was the following percentage of the average value of the Fund's portfolio:
<Table>
<Caption>
FUND PERCENTAGE OF THE AVERAGE VALUE OF THE FUND'S PORTFOLIO
Seligman Global Smaller Companies Fund 84%
RiverSource Partners International Small Cap Fund 87%
</Table>
24
PROPOSAL 6. REORGANIZATION OF RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND INTO
RIVERSOURCE GOVERNMENT MONEY MARKET FUND
The following tables describe the fees and expenses that you may pay if you buy
and hold shares of the Selling Fund or shares of the Buying Fund. The tables
also show pro forma fees and expenses of the Buying Fund assuming the proposed
Reorganization relating to the Buying Fund had been in effect at the beginning
of the most recent fiscal year. For purposes of comparison, the single class of
shares of RiverSource Tax-Exempt Money Market Fund is referred to as Class A
shares.
Annual fund operating expenses are based on expenses incurred during the Fund's
most recently completed fiscal year, and are expressed as a percentage (expense
ratio) of the Fund's average net assets during the period. The tables have been
adjusted to reflect current fee schedules but have not been adjusted to reflect
the Fund's assets as of a different period or point in time, as asset levels
will fluctuate. As of the date of this proxy statement/prospectus, a Fund's net
assets may be lower or higher than the Fund's average net assets during the most
recently completed fiscal year. In general, a fund's annual operating expenses
will increase as the fund's assets decrease. Accordingly, the Fund's annual
operating expenses, if adjusted based on assets as of the date of this proxy
statement/prospectus, could be higher or lower than are expressed in the fee and
expense table below. The commitment by the investment manager and its affiliates
to waive fees and/or cap (reimburse) expenses limits the impact that any
decrease in the Fund's assets will have on its total annual (net) operating
expenses in the current fiscal year.
The fees and expenses below exclude the costs of this Reorganization, because
these will be paid for by the investment manager and its affiliates.
ACTUAL AND PRO FORMA FUND EXPENSES FOR THE MOST RECENT FISCAL YEAR
SHAREHOLDER FEES (FEES PAID DIRECTLY FROM YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND (ACTUAL) (SELLING FUND) CLASS A
Maximum sales charge (load) imposed on purchases (as a percentage of offering
price) None
Maximum deferred sales charge (load) imposed on sales (as a percentage of
offering price at time of purchase) None
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (ACTUAL) (BUYING FUND) CLASS A
Maximum sales charge (load) imposed on purchases (as a percentage of offering
price) None
Maximum deferred sales charge (load) imposed on sales (as a percentage of
offering price at time of purchase) None
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (PRO FORMA COMBINED) CLASS A
Maximum sales charge (load) imposed on purchases (as a percentage of offering
price) None
Maximum deferred sales charge (load) imposed on sales (as a percentage of
offering price at time of purchase) None
</Table>
ANNUAL FUND OPERATING EXPENSES (EXPENSES THAT YOU PAY EACH YEAR AS A PERCENTAGE
OF THE VALUE OF YOUR INVESTMENT)
<Table>
<Caption>
RIVERSOURCE RIVERSOURCE RIVERSOURCE
TAX-EXEMPT MONEY GOVERNMENT MONEY GOVERNMENT MONEY
MARKET FUND - CLASS A MARKET FUND - CLASS A MARKET FUND - CLASS A
(ACTUAL) (SELLING FUND) (ACTUAL) (BUYING FUND) (PRO FORMA COMBINED)
Management fees 0.33% 0.33% 0.33%
Distribution and/or service (12b-1) fees 0.10% 0.25%(a) 0.25%(a)
Other expenses(b) 0.25% 0.38% 0.33%
Total annual fund operating expenses 0.68% 0.96% 0.91%
Fee waiver/expense reimbursement N/A 0.30%(a) 0.25%(a)
Total annual (net) fund operating expenses N/A 0.66% 0.66%(c)
</Table>
(a) The distributor has currently agreed not to be reimbursed by RiverSource
Government Money Market Fund for distribution (12b-1) fees equal to 0.15% of
the stated amount for Class A. This waiver is reflected under "Fee
waiver/expense reimbursement" in the table. Any amount of the distribution
(12b-1) fees not paid as reimbursement to or collected by the distributor
will not be paid or reimbursed by RiverSource Government Money Market Fund.
(b) Other expenses include an administrative services fee, a transfer agency
fee, a custody fee and other nonadvisory expenses.
(c) The investment manager and its affiliates have contractually agreed to waive
certain fees and to absorb certain expenses until April 30, 2010, unless
sooner terminated at the discretion of RiverSource Government Money Market
Fund's Board. Any amounts waived will not be reimbursed by the Fund. Under
this agreement, net fund expenses will not exceed 0.66% for Class A.
From time to time, the investment manager and its affiliates may waive or absorb
expenses of the Fund for the purpose of allowing the Fund to avoid a negative
net yield or to increase the Fund's positive net yield. The Fund's yield would
be negative if Fund expenses exceed Fund income. Any such expense limitation is
voluntary and may be revised or terminated at any time without notice.
25
EXPENSE EXAMPLES: These examples are intended to help you compare the cost of
investing in the Funds with the cost of investing in other mutual funds. These
examples assume that you invest $10,000 in the applicable Fund for the time
periods indicated and then redeem all of your shares at the end of those
periods, both under the current arrangements and, for the Buying Fund, assuming
the proposed Reorganization had been in effect. These examples also assume that
your investment has a 5% return each year and that the Fund's operating expenses
remain the same, except for any contractual fee waiver/expense reimbursement
that is reflected in these examples for only the first year. Although your
actual costs may be higher or lower, based on these assumptions your costs would
be:
<Table>
<Caption>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND (ACTUAL) (SELLING
FUND) CLASS A $69 $218 $379 $ 850
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (ACTUAL) (BUYING
FUND) CLASS A $67 $276 $503 $1,155
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (PRO FORMA
COMBINED) CLASS A $67 $265 $480 $1,101
</Table>
You would pay the same costs shown in the tables above if you did not redeem
your shares at the end of the periods indicated.
26
PROPOSAL 1. REORGANIZATION OF RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND INTO
RIVERSOURCE MID CAP GROWTH FUND
COMPARISON OF THE SELLING FUND AND THE BUYING FUND
Both the Selling Fund and the Buying Fund:
- Have RiverSource Investments as an investment manager.
- Have the same policies for buying and selling shares and the same exchange
rights.
- Have the same distribution policies.
- Offer the same classes of shares: A, B, C, I, R2, R3, R4 and R5.
- Are structured as a series of capital stock of an open-end management
investment company organized as a Minnesota corporation.
COMPARISON OF INVESTMENT OBJECTIVES
Both Funds seek growth of capital. Both Funds are intended for long-term
investors and are not intended as short-term trading vehicle. Because any
investment involves risk, there is no assurance, the Fund's objective can be
achieved. Only shareholders can change the Fund's objective.
The investment objectives for the Funds are as follows:
SELLING FUND: RiverSource Partners Aggressive Growth Fund seeks to
provide shareholders with long-term capital growth.
BUYING FUND: RiverSource Mid Cap Growth Fund seeks to provide
shareholders with growth of capital.
COMPARISON OF PRINCIPAL INVESTMENT STRATEGIES
The Selling Fund and the Buying Fund have similar principal investment
strategies. Both Funds primarily invest in equity securities of medium sized
companies whose market capitalization at the time of purchase falls within the
range of the Russell Midcap(R) Growth Index. The Buying Fund has a policy of
investing at least 80% of its net assets at the time of purchase in equity
securities of medium sized companies, while the Selling Fund does not have this
restriction. The Buying Fund will provide shareholders with at least 60 days'
notice of any change to the 80% policy. In addition to medium sized companies
both Funds may invest in companies of any size or capitalization, but the Buying
Fund limits these investments to 20% of the Fund's net assets.
Although RiverSource Investments serves as investment manager of both Funds, the
Selling Fund was, until Nov. 6, 2009, subadvised by American Century Investment
Management, Inc. (American Century) and Turner Investment Partners, Inc.
(Turner). The Selling Fund's Board of Directors terminated the subadvisory
contracts of American Century and Turner for managing the Selling Fund's
portfolio. Since Nov. 6, 2009, RiverSource Investments has solely managed the
Selling Fund.
Detailed strategies for the Selling Fund and the Buying Fund are set forth
below:
<Table>
<Caption>
--------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND
(SELLING FUND) RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
--------------------------------------------------------------------------------------------
Under normal market conditions, the Fund's Under normal market conditions, the Fund will
net assets, including the amount of any invest at least 80% of its net assets at the
borrowings for investment purposes, are time of purchase in the common stocks of mid-
invested primarily in equity securities of capitalization companies. The Fund will
medium-sized U.S. companies. Medium-sized provide shareholders with at least 60 days'
companies are those whose market notice of any change in the 80% policy. The
capitalization at the time of purchase falls investment manager defines mid-cap companies
within the range of the Russell Midcap(R) as those whose market capitalization (number
Growth Index. Although it invests primarily of shares outstanding multiplied by the share
in medium-sized companies, the Fund may also price) falls within the range of the
invest in companies of any size or companies that comprise the Russell Midcap(R)
capitalization. Up to 25% of the Fund's net Growth Index (the Index). Over time, the
assets may be invested in foreign investments capitalizations of the companies in the Index
will change. As they do, the size of the
companies in which the Fund invests may
change. As long as an investment continues to
meet the Fund's other investment criteria,
the Fund may choose to continue to hold a
stock even if the company's market
capitalization grows beyond the largest
market capitalization of a company within the
Index or falls below the market
capitalization of the smallest company within
the Index. The Fund can invest in any
economic sector and, at times, it may
emphasize one or more particular sectors.
--------------------------------------------------------------------------------------------
</Table>
27
In addition to the principal investment strategies set forth above, each Fund
also has the following principal investment strategies:
In pursuit of the Fund's objective, the investment manager chooses equity
investments by, among other things:
- Analyzing a company's:
- management's track record;
- financial strength;
- growth potential (on average, a company's expected ability to generate
future earnings growth of at least 15% per year); and
- competitive market position.
- Identifying sectors with growth potential and weighting purchases in those
sectors more heavily.
- Considering market trends and identifying opportunities within multiple
industries that offer a desirable risk/reward trade-off for shareholders.
In evaluating whether to sell a security, the investment manager considers,
among other factors, whether:
- The security is overvalued relative to alternative investments.
- The company has met the investment manager's earnings and/or growth
expectations.
- Political, economic, or other events could affect the company's performance.
- The company or the security continues to meet the other standards described
above.
COMPARISON OF FUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
fundamental investment policies of the Buying Fund. RiverSource Investments does
not believe that the differences between the fundamental investment policies of
the Funds result in any material difference in the way the Funds have been
managed or in the way the combined Fund will be managed.
For purposes of this discussion, a "fundamental" investment policy is one that
may not be changed without a shareholder vote. The Selling Fund and the Buying
Fund have identical fundamental investment policies. Neither of the Funds will:
- Act as an underwriter (sell securities for others). However, under the
securities laws, the Fund may be deemed to be an underwriter when it purchases
securities directly from the issuer and later resells them.
- Lend securities or participate in an interfund lending program if the total of
all such loans would exceed 33 1/3% of the Fund's total assets except this
fundamental investment policy shall not prohibit the Fund from purchasing
money market securities, loans, loan participation or other debt securities,
or from entering into repurchase agreements.
- Borrow money, except for temporary purposes (not for leveraging or investment)
in an amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings) immediately after the
borrowings.
- Issue senior securities, except as permitted under the 1940 Act, the rules and
regulations thereunder and any applicable exemptive relief.
- Buy or sell real estate, unless acquired as a result of ownership of
securities or other instruments, except this shall not prevent the Fund from
investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business or real estate
investment trusts. For purposes of this policy, real estate includes real
estate limited partnerships.
- Buy or sell physical commodities unless acquired as a result of ownership of
securities or other instruments, except this shall not prevent the Fund from
buying or selling options and futures contracts or from investing in
securities or other instruments backed by, or whose value is derived from,
physical commodities.
- Purchase more than 10% of the outstanding voting securities of an issuer,
except that up to 25% of the Fund's assets may be invested without regard to
this 10% limitation.
- Invest more than 5% of its total assets in securities of any company,
government, or political subdivision thereof, except the limitation will not
apply to investments in securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities, or other investment companies,
and except that up to 25% of the Fund's total assets may be invested without
regard to this 5% limitation.
- Concentrate in any one industry. According to the present interpretation by
the SEC, this means that up to 25% of the Fund's total assets, based on
current market value at time of purchase, can be invested in any one industry.
28
COMPARISON OF NONFUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
nonfundamental investment policies (policies that may be changed without a
shareholder vote) of the Buying Fund. Both Funds are also subject to the
following nonfundamental policies:
- No more than 15% of the Fund's net assets will be held in securities and other
instruments that are illiquid.
- Up to 25% of the Fund's net assets may be invested in foreign investments.
COMPARISON OF PRINCIPAL RISK FACTORS
The principal investment risks associated with the Selling Fund and the Buying
Fund are substantially similar because the Funds have similar investment
objectives, principal investment strategies and investment policies. With
respect to investment policies, although the Buying Fund is required to invest
80% of its net assets in equity securities of medium-sized companies and the
Selling Fund does not have this investment requirement, which may present the
increased risk of investing in mid-sized companies for the Buying Fund,
currently both Funds have approximately the same exposure to investments in mid-
sized companies. The actual risks of investing in each Fund depend on the
securities held in each Fund's portfolio and on market conditions, both of which
change over time. The Funds are subject to the principal investment risks
described below.
ACTIVE MANAGEMENT RISK. The Fund is actively managed and its performance
therefore will reflect in part the ability of the portfolio managers to select
securities and to make investment decisions that are suited to achieving the
Fund's investment objective. Due to its active management, the Fund could
underperform other mutual funds with similar investment objectives.
ISSUER RISK. An issuer may perform poorly, and therefore, the value of its
stocks and bonds may decline. Poor performance may be caused by poor management
decisions, competitive pressures, breakthroughs in technology, reliance on
suppliers, labor problems or shortages, corporate restructurings, fraudulent
disclosures or other factors.
MARKET RISK. The market value of securities may fall or fail to rise. Market
risk may affect a single issuer, sector of the economy, industry, or the market
as a whole. The market value of securities may fluctuate, sometimes rapidly and
unpredictably. This risk is generally greater for small and mid-sized companies,
which tend to be more vulnerable to adverse developments. In addition, focus on
a particular style, for example, investment in growth or value securities, may
cause the Fund to underperform other mutual funds if that style falls out of
favor with the market.
MID-SIZED COMPANY RISK. Investments in mid-sized companies often involve greater
risks than investments in larger, more established companies because mid-sized
companies may lack the management experience, financial resources, product
diversification and competitive strengths of larger companies. In addition, in
some instances the securities of mid-sized companies are traded only over-the-
counter or on regional securities exchanges and the frequency and volume of
their trading is substantially less than is typical of larger companies.
SECTOR RISK. If a fund emphasizes one or more economic sectors, it may be more
susceptible to the financial, market or economic events affecting the particular
issuers and industries in which it invests than funds that do not emphasize
particular sectors. The more a fund diversifies across sectors, the more it
spreads risk and potentially reduces the risks of loss and volatility.
PERFORMANCE
The following bar charts and tables provide some illustration of the risks of
investing in the Funds by showing, respectively:
- how each Fund's performance has varied for each full calendar year shown in
the bar chart; and
- how each Fund's average annual total returns compare to recognized measures of
market performance shown in the table.
Both the bar chart and the table assume that all distributions have been
reinvested. The performance of different classes varies because of differences
in sales charges and other fees and expenses. How a Fund has performed in the
past (before and after taxes) does not indicate how the Fund will perform in the
future. Performance reflects any fee waivers/expense caps in effect for the
periods reported. In the absence of such fee waivers/expense caps, performance
would have been lower.
Bar Charts. Class A share information is shown in the bar charts; the sales
charge for Class A shares is not reflected in the bar charts.
Tables. The first table shows total returns from hypothetical investments in
Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5
shares of RiverSource Partners Aggressive Growth Fund. The second table shows
total returns from hypothetical investments in Class A, Class B, Class C, Class
I and Class R4 shares of RiverSource Mid Cap Growth Fund. Inception date for
Class R2, Class R3 and Class R5 is expected to be in the first quarter of 2010
and therefore
29
performance information for these classes is not shown. These returns are
compared to the indexes shown for the same periods. For purposes of the
performance calculation in the table we assumed:
- the maximum sales charge of 5.75% for Class A shares;
- sales at the end of the period and deduction of the applicable contingent
deferred sales charge ("CDSC") for Class B and Class C;
- no sales charge for Class I, Class R2, Class R3, Class R4 and Class R5 shares;
and
- with the exception of Class A shares, no adjustments for taxes paid by an
investor on the reinvested income and capital gains.
AFTER-TAX RETURNS
After-tax returns are shown only for Class A shares. After-tax returns for the
other classes will vary. After-tax returns are calculated using the highest
historical individual federal marginal income tax rate and do not reflect the
impact of state and local taxes. Actual after-tax returns will depend on your
tax situation and most likely will differ from the returns shown in the table.
If you hold your shares in a tax-deferred account, such as a 401(k) plan or an
IRA, the after-tax returns do not apply to you since you will not incur taxes
until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the
return before taxes for the same period if there were no distributions or if the
distributions were small. The return after taxes on distributions and sale of
Fund shares for a period may be greater than the return before taxes for the
same period if there was a tax loss realized on sale of Fund shares. The benefit
of the tax loss (since it can be used to offset other gains) may result in a
higher return.
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND
(SELLING FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+12.56% +9.42% +7.61% +31.38% -48.63%
2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +13.58% (quarter ended Dec. 31, 2004) and the lowest return for a
calendar quarter was -27.21% (quarter ended Dec. 31, 2008).
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart; if reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +26.90%.
30
RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+33.32% -5.66% -12.65% -13.78% +22.99% +9.47% +9.88% -0.23% +14.04% -44.67%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +31.35% (quarter ended Dec. 31, 1999) and the lowest return for a
calendar quarter was -28.29% (quarter ended Dec. 31, 2008).
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart; if reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +63.60%.
31
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2008)
<Table>
<Caption>
SINCE SINCE
INCEPTION SINCE INCEPTION
(CLASSES A, INCEPTION (CLASSES R2,
B, C & R4) (CLASS I) R3 & R5)
1 YEAR 5 YEARS (4/24/03) (3/4/04) (12/11/06)
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND:
Class A
Return before taxes -51.58% -3.36% +2.56% N/A N/A
Return after taxes on distributions -51.59% -3.64% +2.06% N/A N/A
Return after taxes on distributions and sale of
fund shares -33.52% -2.89% +2.00% N/A N/A
Class B
Return before taxes -51.55% -3.32% +2.68% N/A N/A
Class C
Return before taxes -49.52% -2.95% +2.84% N/A N/A
Class I
Return before taxes -48.38% N/A N/A -3.18% N/A
Class R2
Return before taxes --48.73% N/A N/A N/A -18.30%
Class R3
Return before taxes -48.51% N/A N/A N/A -18.02%
Class R4
Return before taxes -48.33% -1.92% +3.90% N/A N/A
Class R5
Return before taxes -48.42% N/A N/A N/A -17.81%
Russell Midcap Growth Index (reflects no deduction
for fees, expenses or taxes) -44.32% -2.33% +3.29% -3.71% -21.31%
Lipper Mid-Cap Growth Funds Index -44.04% -1.18% +3.66%() -2.36% -17.64%
<Caption>
SINCE SINCE
INCEPTION INCEPTION
(CLASS C) (CLASS I)
1 YEAR 5 YEARS 10 YEARS (6/26/00) (3/4/04)
RIVERSOURCE MID CAP GROWTH FUND:
Class A
Return before taxes -47.84% -6.52% -1.75% N/A N/A
Return after taxes on distributions -47.84% -7.86% -3.09% N/A N/A
Return after taxes on distributions and sale of
fund shares -31.09% -4.90% -1.23% N/A N/A
Class B
Return before taxes -47.90% -6.38% -2.02% N/A N/A
Class C
Return before taxes -45.59% -6.12% N/A -5.52% N/A
Class I
Return before taxes -44.46% N/A N/A N/A -5.93%
Class R4
Return before taxes -44.55% -5.25% -1.09% N/A N/A
Russell Midcap Growth Index (reflects no deduction
for fees, expenses or taxes) -44.32% -2.33% -0.19% -6.28% -3.71%
Lipper Mid-Cap Growth Funds Index -44.04% -1.18% +0.49% -6.03% -2.36%
</Table>
The Russell Midcap Growth Index, an unmanaged index, measures the performance of
those stocks in the Russell Midcap Index with higher price-to-book ratios and
higher forecasted growth values. The stocks in the index are also members of the
Russell 1000(R) Growth Index. The index reflects reinvestment of all
distributions and changes in market prices.
The Lipper Mid-Cap Growth Funds Index includes the 30 largest mid-cap growth
funds tracked by Lipper Inc. The index's returns include net reinvested
dividends. The Fund's performance is currently measured against this index for
purposes of determining the performance incentive adjustment.
Investors cannot invest directly in an index.
32
PROPOSAL 2. REORGANIZATION OF RIVERSOURCE PARTNERS SELECT VALUE FUND INTO
RIVERSOURCE MID CAP VALUE FUND
COMPARISON OF THE SELLING FUND AND THE BUYING FUND
Both the Selling Fund and the Buying Fund:
- Have RiverSource Investments as an investment manager.
- Have the same policies for buying and selling shares and the same exchange
rights.
- Have the same distribution policies.
- Offer classes A, B, C, I and R4 (the Buying Fund also offers classes R2, R3,
R5 and W).
- Are structured as a series of capital stock of an open-end management
investment company organized as a Minnesota corporation.
COMPARISON OF INVESTMENT OBJECTIVES
Both Funds seek to provide shareholders with long-term growth of capital. Both
Funds are intended for long-term investors and are not intended as short-term
trading vehicle. Because any investment involves risk, there is no assurance,
the Fund's objective can be achieved. Only shareholders can change the Fund's
objective.
The investment objectives for the Funds are as follows:
SELLING FUND: RiverSource Partners Select Value Fund seeks to provide
shareholders with long-term growth of capital.
BUYING FUND: RiverSource Mid Cap Value Fund seeks to provide
shareholders with long-term growth of capital.
COMPARISON OF PRINCIPAL INVESTMENT STRATEGIES
The Selling Fund and the Buying Fund have similar principal investment
strategies. Both Funds invest primarily in equity securities of medium sized
companies whose market capitalization at the time of purchase falls within the
range of the Russell Midcap(R) Value Index. The Selling Fund also defines medium
sized companies as those with a market capitalization of up to $10 billion. The
Buying Fund has a policy of investing at least 80% of its net assets (including
the amount of any borrowings for investment purposes) in equity securities of
medium sized companies, while the Selling Fund does not have this requirement.
The Buying Fund will provide shareholders with at least 60 days' notice of any
change to the 80% policy. In addition to medium sized companies both Funds can
invest in companies with larger and smaller market capitalization, but the
Buying Fund limits these investments and investments in preferreds, convertibles
and other debt securities to 20% of the Fund's net assets.
Although RiverSource Investments serves as investment manager of both Funds, the
Selling Fund was, until Nov. 6, 2009, subadvised by Systematic Financial
Management, L.P. (Systematic) and WEDGE Capital Management, L.L.P. (WEDGE). The
Selling Fund's Board of Directors terminated the subadvisory contracts of
Systematic and WEDGE for managing the Selling Fund's portfolio. Since Nov. 6,
2009, RiverSource Investments has solely managed the Selling Fund.
Detailed strategies for the Selling Fund and the Buying Fund are set forth
below:
<Table>
<Caption>
--------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SELECT VALUE FUND
(SELLING FUND) RIVERSOURCE MID CAP VALUE FUND (BUYING FUND)
--------------------------------------------------------------------------------------------
The Fund's assets are primarily invested in Under normal circumstances, the Fund invests
equity securities of mid-cap companies as at least 80% of its net assets (including the
well as companies with larger and smaller amount of any borrowings for investment
market capitalizations. For these purposes, purposes) in equity securities of medium-
the Fund considers mid-cap companies to be sized companies. Medium-sized companies are
either those with a market capitalization of those whose market capitalizations at the
up to $10 billion or those whose market time of purchase fall within the range of the
capitalization falls within the range of the Russell Midcap(R) Value Index (the Index).
Russell Midcap(R) Value Index (the Index). The market capitalization range of the
The market capitalization range and the companies in the Index is subject to change.
composition of the Russell Midcap Value Index Up to 20% of the Fund may be invested in
are subject to change stocks of smaller or larger companies,
preferreds, convertibles, or other debt
securities. The Fund may invest up to 25% of
its net assets in foreign investments. The
Fund can invest in any economic sector and,
at times, it may emphasize one or more
particular sectors. The Fund will provide
shareholders with at least 60 days' notice of
any change in the 80% policy.
--------------------------------------------------------------------------------------------
</Table>
33
In addition to the principal investment strategies set forth above, each Fund
also has the following principal investment strategies:
In pursuit of the Fund's objectives, RiverSource Investments chooses equity
investments by seeking to:
- Select companies that are undervalued based on a variety of measures,
including but not limited to price-to-earnings ratios, price-to-book ratios,
price-to-free cash flow, current and projected dividends, sum-of-the parts or
breakup value and historic relative price valuations.
- Identify companies with growth potential based on:
- effective management, as demonstrated by overall performance;
- financial strength; and
- underappreciated potential for improvement in industry and thematic trends.
In evaluating whether to sell a security, the investment manager considers,
among other factors, whether:
- The security is overvalued relative to alternative investments.
- The security has reached the investment manager's price objective.
- The company has met the investment manager's earnings and/or growth
expectations.
- The security exhibits unacceptable correlation characteristics with other
portfolio holdings.
- The company or the security continues to meet the other standards described
above.
COMPARISON OF FUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
fundamental investment policies of the Buying Fund. For purposes of this
discussion, a "fundamental" investment policy is one that may not be changed
without a shareholder vote. The Selling Fund and the Buying Fund have the
following identical fundamental investment policies. Neither of the Funds will:
- Act as an underwriter (sell securities for others). However, under the
securities laws, the Fund may be deemed to be an underwriter when it purchases
securities directly from the issuer and later resells them.
- Lend securities or participate in an interfund lending program if the total of
all such loans would exceed 33 1/3% of the Fund's total assets except this
fundamental investment policy shall not prohibit the Fund from purchasing
money market securities, loans, loan participation or other debt securities,
or from entering into repurchase agreements.
- Borrow money, except for temporary purposes (not for leveraging or investment)
in an amount not exceeding 33 1/3% of its total assets (including the amount
borrowed) less liabilities (other than borrowings) immediately after the
borrowings.
- Issue senior securities, except as permitted under the 1940 Act, the rules and
regulations thereunder and any applicable exemptive relief.
- Buy or sell real estate, unless acquired as a result of ownership of
securities or other instruments, except this shall not prevent the Fund from
investing in securities or other instruments backed by real estate or
securities of companies engaged in the real estate business or real estate
investment trusts. For purposes of this policy, real estate includes real
estate limited partnerships.
- Purchase more than 10% of the outstanding voting securities of an issuer,
except that up to 25% of the Fund's assets may be invested without regard to
this 10% limitation.
- Invest more than 5% of its total assets in securities of any company,
government, or political subdivision thereof, except the limitation will not
apply to investments in securities issued or guaranteed by the U.S.
government, its agencies, or instrumentalities, or other investment companies,
and except that up to 25% of the Fund's total assets may be invested without
regard to this 5% limitation.
- Concentrate in any one industry. According to the present interpretation by
the SEC, this means that up to 25% of the Fund's total assets, based on
current market value at time of purchase, can be invested in any one industry.
In addition, although the fundamental policy related to buying and selling
physical commodities is stated differently for the Selling Fund and the Buying
Fund, RiverSource Investments does not believe this difference is material.
- RiverSource Mid Cap Value Fund will not buy or sell physical commodities
unless acquired as a result of ownership of securities or other instruments,
except this shall not prevent the Fund from buying or selling options and
futures contracts or from investing in securities or other instruments backed
by, or whose value is derived from, physical commodities.
34
- RiverSource Partners Select Value Fund will not buy or sell physical
commodities unless acquired as a result of ownership of securities or other
instruments, except this shall not prevent the fund from buying or selling
options, futures contracts and foreign currency or from investing in
securities or other instruments backed by, or whose value is derived from,
physical commodities.
COMPARISON OF NONFUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
nonfundamental investment policies (policies that may be changed without a
shareholder vote) of the Buying Fund. Both Funds are also subject to the
following nonfundamental policies:
- No more than 15% of the Fund's net assets will be held in securities and other
instruments that are illiquid.
- Up to 25% of the Fund's net assets may be invested in foreign investments.
COMPARISON OF PRINCIPAL RISK FACTORS
The principal investment risks associated with the Selling Fund and the Buying
Fund are substantially similar because the Funds have similar investment
objectives, principal investment strategies and investment policies. Although
both of the Funds have similar limitation with respect to foreign investing, the
Buying Fund currently has higher exposure to these types of investments and
therefore presents increased exposure to the risks of foreign investing. With
regards to investment policies, although the Buying Fund is required to invest
80% of its net assets in equity securities of medium-sized companies and the
Selling Fund does not have this investment requirement, which may present the
increased risk of investing in mid-sized companies for the Buying Fund,
currently both Funds have approximately the same exposure to investments in mid-
sized companies. In addition, the Selling Fund has the ability to buy and sell
foreign currency, which may present the increased risk of foreign investing, but
currently the Selling Fund does not hold any foreign currencies. The actual
risks of investing in each Fund depend on the securities held in each Fund's
portfolio and on market conditions, both of which change over time. The Funds
are subject to the principal investment risks described below.
RISKS OF FOREIGN INVESTING. Foreign securities are securities of issuers based
outside the United States. An issuer is deemed to be based outside the United
States if it is organized under the laws of another country. Foreign securities
are primarily denominated in foreign currencies. In addition to the risks
normally associated with domestic securities of the same type, foreign
securities are subject to the following foreign risks:
Country risk includes the political, economic, and other conditions of the
country. These conditions include lack of publicly available information, less
government oversight (including lack of accounting, auditing, and financial
reporting standards), the possibility of government-imposed restrictions, and
even the nationalization of assets. The liquidity of foreign investments may be
more limited than for most U.S. investments, which means that, at times it may
be difficult to sell foreign securities at desirable prices.
Currency risk results from the constantly changing exchange rate between local
currency and the U.S. dollar. Whenever the Fund holds securities valued in a
foreign currency or holds the currency, changes in the exchange rate add to or
subtract from the value of the investment.
Custody risk refers to the process of clearing and settling trades. It also
covers holding securities with local agents and depositories. Low trading
volumes and volatile prices in less developed markets make trades harder to
complete and settle. Local agents are held only to the standard of care of the
local market. Governments or trade groups may compel local agents to hold
securities in designated depositories that are not subject to independent
evaluation. The less developed a country's securities market is, the greater the
likelihood of problems occurring.
ISSUER RISK. An issuer may perform poorly, and therefore, the value of its
stocks and bonds may decline. Poor performance may be caused by poor management
decisions, competitive pressures, breakthroughs in technology, reliance on
suppliers, labor problems or shortages, corporate restructurings, fraudulent
disclosures or other factors.
MARKET RISK. The market value of securities may fall or fail to rise. Market
risk may affect a single issuer, sector of the economy, industry, or the market
as a whole. The market value of securities may fluctuate, sometimes rapidly and
unpredictably. This risk is generally greater for small and mid-sized companies,
which tend to be more vulnerable to adverse developments. In addition, focus on
a particular style, for example, investment in growth or value securities, may
cause the Fund to underperform other mutual funds if that style falls out of
favor with the market.
MID-SIZED COMPANY RISK. Investments in mid-sized companies often involve greater
risks than investments in larger, more established companies because mid-sized
companies may lack the management experience, financial resources, product
diversification and competitive strengths of larger companies. In addition, in
some instances the securities of mid-sized companies are traded only over-the-
counter or on regional securities exchanges and the frequency and volume of
their trading is substantially less than is typical of larger companies.
35
SECTOR RISK. If a fund emphasizes one or more economic sectors, it may be more
susceptible to the financial, market or economic events affecting the particular
issuers and industries in which it invests than funds that do not emphasize
particular sectors. The more a fund diversifies across sectors, the more it
spreads risk and potentially reduces the risks of loss and volatility.
PERFORMANCE
The following bar charts and tables provide some illustration of the risks of
investing in the Funds by showing, respectively:
- how each Fund's performance has varied for each full calendar year shown in
the bar chart; and
- how each Fund's average annual total returns compare to recognized measures of
market performance shown in the table.
Both the bar chart and the table assume that all distributions have been
reinvested. The performance of different classes varies because of differences
in sales charges and other fees and expenses. How a Fund has performed in the
past (before and after taxes) does not indicate how the Fund will perform in the
future. Performance reflects any fee waivers/expense caps in effect for the
periods reported. In the absence of such fee waivers/expense caps, performance
would have been lower.
Bar Charts. Class A share information is shown in the bar charts; the sales
charge for Class A shares is not reflected in the bar charts.
Tables. The first table shows total returns from hypothetical investments in
Class A, Class B, Class C, Class I and Class R4 shares of RiverSource Partners
Select Value Fund. The second table shows total returns from hypothetical
investments in Class A, Class B, Class C, Class I and Class R4 shares of
RiverSource Mid Cap Value Fund. These returns are compared to the indexes shown
for the same periods. For purposes of the performance calculation in the table
we assumed:
- the maximum sales charge of 5.75% for Class A shares;
- sales at the end of the period and deduction of the applicable contingent
deferred sales charge ("CDSC") for Class B and Class C;
- no sales charge for Class I and Class R4 shares; and
- with the exception of Class A shares, no adjustments for taxes paid by an
investor on the reinvested income and capital gains.
AFTER-TAX RETURNS
After-tax returns are shown only for Class A shares. After-tax returns for the
other classes will vary. After-tax returns are calculated using the highest
historical individual federal marginal income tax rate and do not reflect the
impact of state and local taxes. Actual after-tax returns will depend on your
tax situation and most likely will differ from the returns shown in the table.
If you hold your shares in a tax-deferred account, such as a 401(k) plan or an
IRA, the after-tax returns do not apply to you since you will not incur taxes
until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the
return before taxes for the same period if there were no distributions or if the
distributions were small. The return after taxes on distributions and sale of
Fund shares for a period may be greater than the return before taxes for the
same period if there was a tax loss realized on sale of Fund shares. The benefit
of the tax loss (since it can be used to offset other gains) may result in a
higher return.
36
RIVERSOURCE PARTNERS SELECT VALUE FUND (SELLING
FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+29.62% +13.51% +1.76% +18.32% +5.83% -36.76%
2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +17.38% (quarter ended June 30, 2003) and the lowest return for a
calendar quarter was -26.00% (quarter ended Dec. 31, 2008).
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart; if reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +26.16%.
RIVERSOURCE MID CAP VALUE FUND (BUYING FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+47.69% +23.80% +16.67% +17.00% +10.26% -44.30%
2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +27.27% (quarter ended June 30, 2003) and the lowest return for a
calendar quarter was -27.69% (quarter ended Dec. 31, 2008).
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart; if reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +31.41%.
37
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2008)
<Table>
<Caption>
SINCE
INCEPTION SINCE
(CLASSES A, INCEPTION
B, C & R4) (CLASS I)
1 YEAR 5 YEARS (3/8/02) (3/4/04)
RIVERSOURCE PARTNERS SELECT VALUE FUND:
Class A
Return before taxes -40.43% -2.93% +0.25% N/A
Return after taxes on distributions -40.87% -5.01% -1.34% N/A
Return after taxes on distributions and sale of fund
shares -26.28% -2.43% +0.24% N/A
Class B
Return before taxes -40.55% -2.79% +0.31% N/A
Class C
Return before taxes -37.29% -2.51% +0.36% N/A
Class I
Return before taxes -36.71% N/A N/A -2.40%
Class R4
Return before taxes -36.60% -1.54% +1.34% N/A
Russell Midcap Value Index (reflects no deduction for fees,
expense or taxes) -38.44% +0.33% +2.53% -0.99%
Lipper Mid-Cap Value Funds Index -39.71% -1.24% +0.84% -2.69%
<Caption>
SINCE
INCEPTION SINCE
(CLASSES A, INCEPTION
B, C & R4) (CLASS I)
1 YEAR 5 YEARS (2/14/02) (3/4/04)
RIVERSOURCE MID CAP VALUE FUND:
Class A
Return before taxes -47.51% -0.44% +2.71% N/A
Return after taxes on distributions -48.30% -1.60% +1.80%() N/A
Return after taxes on distributions and sale of fund
shares -29.98% -0.31% +2.35% N/A
Class B
Return before taxes -47.23% -0.33% +2.80% N/A
Class C
Return before taxes -45.23% -0.03% +2.80%() N/A
Class I
Return before taxes -44.06% N/A N/A -0.29%
Class R4
Return before taxes -44.28% +0.87% +3.76% N/A
Russell Midcap Value Index (reflects no deduction for fees,
expenses or taxes) -38.44% +0.33% +3.34% -0.99%
Lipper Mid-Cap Value Funds Index -39.71% -1.24% +1.79% -2.69%
</Table>
The Russell Midcap Value Index, an unmanaged index, measures the performance of
the mid-cap value segment of the U.S. equity universe. It includes those Russell
Midcap Index companies with lower to price-to-book ratios and lower forecasted
growth values. The index reflects reinvestment of all distributions and changes
in market prices.
The Lipper Mid-Cap Value Funds Index includes the 30 largest mid-cap value funds
tracked by Lipper Inc. The index's returns include net reinvested dividends. The
Fund's performance is currently measured against this index for purposes of
determining the performance incentive adjustment.
Investors cannot invest directly in an index.
38
PROPOSAL 3. REORGANIZATION OF RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND INTO
SELIGMAN SMALLER-CAP VALUE FUND
COMPARISON OF THE SELLING FUND AND THE BUYING FUND
Both the Selling Fund and the Buying Fund:
- Have RiverSource Investments as an investment manager.
- Have the same polices for buying and selling shares and the same exchange
rights.
- Have the same distribution policies.
- Offer classes A, B, C, I and R4 (the Buying Fund also offers classes R2, R3
and R5).
- Are structured as a series of capital stock of an open-end management
investment company. The Selling Fund is organized as a series of a Minnesota
corporation and the Buying Fund is organized as a series of a Maryland
corporation. Please see Exhibit D to this proxy statement/prospectus for more
information regarding the differences between the rights of shareholders of
the Buying Fund and the shareholders of the Selling Fund.
COMPARISON OF INVESTMENT OBJECTIVES
Both Funds seek long-term capital appreciation. Both Funds are intended for
long-term investors and are not intended as short-term trading vehicle. Because
any investment involves risk, there is no assurance this objective can be
achieved. Only shareholders can change the Fund's objective.
The investment objectives for the Funds are as follows:
SELLING FUND: RiverSource Partners Small Cap Equity Fund seeks to
provide shareholders with long-term growth of capital.
BUYING FUND: Seligman Smaller-Cap Value Fund seeks long-term capital
appreciation.
COMPARISON OF PRINCIPAL INVESTMENT STRATEGIES
Each Fund invests primarily in securities of companies with small market
capitalizations. The Selling Fund invests at least 80% of its net assets in
equity securities of small market companies, which are defined as companies that
have a market capitalization not greater than that of the largest company in the
Russell 2000 Index or the Standard & Poor's ("S&P") SmallCap 600 Index at the
time of investment by the Selling Fund. The Buying Fund invests at least 80% of
its net assets in value companies with market capitalizations of $3 billion or
less at the time of purchase. Each Fund may invest up to 25% of its net assets
in foreign investments.
Although RiverSource Investments serves as investment manager of both Funds, the
Selling Fund was, until Aug. 10, 2009, subadvised by American Century Investment
Management, Inc. (American Century), Jennison Associates LLC (Jennison) and Lord
Abbett & Co. LLC (Lord Abbett). The Selling Fund's Board of Directors terminated
the contracts of American Century, Jennison and Lord Abbett for managing the
Selling Fund's portfolio. Since Aug. 10, 2009, RiverSource Investments has
solely managed the Selling Fund.
39
Detailed strategies for the Selling Fund and the Buying Fund are set forth
below:
<Table>
<Caption>
--------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND
(SELLING FUND) SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND)
--------------------------------------------------------------------------------------------
Under normal market conditions, at least 80% The Fund generally invests at least 80% of
of the Fund's net assets are invested at the its net assets in the common stock of "value"
time of purchase in equity securities issued companies with smaller market capitalization
by small companies. The Fund considers small ($3 billion or less) at the time of purchase
companies to be those that, at the time of by the Fund.
investment, have a market capitalization not
greater than that of the largest company in Although the Fund invests primarily in common
the Russell 2000(R) Index or the S&P SmallCap stocks of domestic issuers, it may also
600 Index. The market capitalization range invest in other equity-related securities of
and the composition of both the Russell 2000 domestic issuers, including preferred stock,
Index and the S&P SmallCap 600 Index are stock convertible into or exchangeable for
subject to change. The Fund will primarily such securities, and common stock purchase
invest in value stocks, but may invest in rights and warrants. The Fund may also
growth stocks based on available invest in American Depositary Receipts
opportunities. The Fund will provide ("ADRs"). ADRs are publicly traded
shareholders with at least 60 days' notice of instruments generally issued by domestic
any change in the 80% policy. banks or trust companies that represent a
security of a foreign issuer. ADRs are quoted
and settled in U.S. dollars. The Fund uses
the same criteria in evaluating these
securities as it does for common stocks.
The Fund may invest up to 15% of its net
assets in illiquid securities (i.e.,
securities that cannot be readily sold) and
may invest up to 25% of its net assets in
foreign investments. The Fund may also
purchase put options in an attempt to hedge
against a decline in the price of securities
it holds in its portfolio. A put option gives
the Fund the right to sell an underlying
security at a particular price during a fixed
period. The Fund generally does not invest a
significant amount of its assets, if any, in
illiquid securities, foreign securities, or
put options.
The Fund's Board of Directors may change the
parameters by which small market
capitalization is defined if it concludes
such a change is appropriate.
--------------------------------------------------------------------------------------------
</Table>
In addition to the principal investment strategies set forth above, each Fund
also has the following principal investment strategies:
The Fund uses a bottom-up stock selection approach. This means that the
investment manager concentrates on individual company fundamentals, rather than
on a particular industry. In selecting investments, the investment manager seeks
to identify value companies that it believes display certain characteristics,
including but not limited to, one or more of the following:
- a low price-to-earnings and/or low price-to book ratio;
- positive change in senior management;
- positive corporate restructuring;
- a temporary setback in price due to factors that no longer exist;
- a positive shift in the company's business cycle; and/or
- a catalyst for increase in the rate of the company's earnings growth.
The Fund generally holds a small number of securities because the investment
manager believes doing so allows it to adhere to its disciplined value
investment approach. The investment manager maintains close contact with the
management of each company in which the Fund invests or the third-party analysts
covering such companies, and continually monitors Fund holdings, remaining
sensitive to overvaluation and deteriorating fundamentals.
In deciding whether to sell a security, the investment manager considers
whether:
- it has become fully valued,
- its fundamentals have deteriorated, or
- ongoing evaluation reveals that there are more attractive investment
opportunities available.
40
COMPARISON OF FUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
fundamental investment policies of the Buying Fund. RiverSource Investments does
not believe that the differences between the fundamental investment policies of
the Funds result in any material difference in the way the Funds have been
managed or in the way the combined Fund will be managed. For purposes of this
discussion, a "fundamental" investment policy is one that may not be changed
without a shareholder vote. The Funds' fundamental investment policies are set
forth below:
----------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP EQUITY SELIGMAN SMALLER-CAP VALUE FUND (BUYING
POLICY FUND (SELLING FUND) FUND)
----------------------------------------------------------------------------------------------------
REPURCHASE No fundamental policy, see fundamental The Fund will not enter into repurchase
AGREEMENTS policy with respect to lending, below. agreements of more than one week's
duration if more than 10% of its net
assets would be so invested.
----------------------------------------------------------------------------------------------------
COMMODITIES The Fund will not buy or sell physical The Fund may not purchase or sell
commodities unless acquired as a result commodities or commodity contracts,
of ownership of securities or other except to the extent permissible under
instruments, except this shall not applicable law and interpretations, as
prevent the Fund from buying or selling they may be amended from time to time.
options, futures contracts and foreign
currency or from investing in securities
or other instruments backed by, or whose
value is derived from, physical
commodities.
----------------------------------------------------------------------------------------------------
MARGIN No fundamental policy. The Fund may not purchase securities on
margin except as permitted by the 1940
Act, as amended or any rule thereunder,
any SEC or SEC staff interpretations
thereof or any exemptions therefrom
which may be granted by the SEC.
----------------------------------------------------------------------------------------------------
ISSUING SENIOR The Fund will not issue senior The Fund may not issue senior
SECURITIES securities, except as permitted under securities, except as permitted by the
the 1940 Act, the rules and regulations 1940 Act or any rule thereunder, any SEC
thereunder and any applicable exemptive or SEC staff interpretations thereof or
relief. any exemptions therefrom which may be
granted by the SEC.
----------------------------------------------------------------------------------------------------
BORROWING MONEY The Fund will not borrow money, except The Fund may not borrow money, except as
for temporary purposes (not for permitted by the 1940 Act or any rule
leveraging or investment) in an amount thereunder, any SEC or SEC staff
not exceeding 33 1/3% of its total interpretations thereof or any
assets (including the amount borrowed) exemptions therefrom which may be
less liabilities (other than borrowings) granted by the SEC.
immediately after the borrowings.
----------------------------------------------------------------------------------------------------
LENDING The Fund will not lend securities or The Fund may not make loans, except as
participate in an interfund lending permitted by the 1940 Act or any rule
program if the total of all such loans thereunder, any SEC or SEC staff
would exceed 33 1/33% of the Fund's interpretations thereof or any
total assets except this fundamental exemptions therefrom which may be
investment policy shall not prohibit the granted by the SEC.
Fund from purchasing money market
securities, loans, loan participation or
other debt securities, or from entering
into repurchase agreements.
----------------------------------------------------------------------------------------------------
UNDERWRITING The Fund will not act as an underwriter The Fund may not underwrite the
(sell securities for others). However, securities of other issuers, except
under the securities laws, the Fund may insofar as a Fund may be deemed an
be deemed to be an underwriter when it underwriter under the Securities Act of
purchases securities directly from the 1933, as amended ("1933 Act"), in
issuer and later resells them. disposing of a portfolio security or in
connection with investments in other
investment companies.
----------------------------------------------------------------------------------------------------
REAL ESTATE The Fund will not buy or sell real The Fund may not purchase or hold any
estate, unless acquired as a result of real estate, except the Fund may invest
ownership of securities or other in securities secured by real estate or
instruments, except this shall not interests therein or issued by persons
prevent the Fund from investing in (including real estate investment
securities or other instruments backed trusts) which deal in real estate or
by real estate or securities of interests therein.
companies engaged in the real estate
business or real estate investment
trusts. For purposes of this policy,
real estate includes real estate limited
partnerships.
----------------------------------------------------------------------------------------------------
</Table>
41
----------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP EQUITY SELIGMAN SMALLER-CAP VALUE FUND (BUYING
POLICY FUND (SELLING FUND) FUND)
----------------------------------------------------------------------------------------------------
DIVERSIFICATION The Fund will not purchase more than 10% The Fund may not make any investment
of the outstanding voting securities of inconsistent with the Fund's
an issuer, except that up to 25% of the classification as a diversified company
Fund's assets may be invested without under the 1940 Act.
regard to this 10% limitation.
The Fund will not invest more than 5% of
its total assets in securities of any
company, government, or political
subdivision thereof, except the
limitation will not apply to investments
in securities issued or guaranteed by
the U.S. government, its agencies, or
instrumentalities, or other investment
companies, and except that up to 25% of
the Fund's total assets may be invested
without regard to this 5% limitation.
----------------------------------------------------------------------------------------------------
INDUSTRY The Fund will not concentrate in any one The Fund may not invest 25% or more of
CONCENTRATION industry. According to the present its total assets, at market value, in
interpretation by the SEC, this means the securities of issuers in any
that up to 25% of the Fund's total particular industry, provided that this
assets, based on current market value at limitation shall exclude securities
time of purchase, can be invested in any issued or guaranteed by the U.S.
one industry. government or any of its agencies or
instrumentalities.
----------------------------------------------------------------------------------------------------
DEALINGS WITH Not applicable. The Fund may not purchase or hold the
DIRECTORS AND securities of any issuer (other than the
OFFICERS shares of the Fund), if to its
knowledge, directors or officers of the
Series (of which the Fund is a series
thereof) individually owning
beneficially more than 0.5% of the
securities of that issuer own in the
aggregate more than 5% of such
securities.
----------------------------------------------------------------------------------------------------
COMPARISON OF NONFUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
nonfundamental investment policies (policies that may be changed without a
shareholder vote) of the Buying Fund. Both Funds are also subject to the
following nonfundamental policies:
- No more than 15% of the Fund's net assets will be held in securities and other
instruments that are illiquid.
- Up to 25% of the Fund's net assets may be invested in foreign investments.
COMPARISON OF PRINCIPAL RISK FACTORS
Although the Funds describe them differently, the principal investment risks
associated with the Buying Fund and the Selling Fund are similar because the
Funds have similar investment objectives, principal investment strategies and
investment policies. The actual risks of investing in each Fund depend on the
securities held in each Fund's portfolio and on market conditions, both of which
change over time. Both Funds are subject to the principal investment risks
described below.
Each Fund is actively managed and its performance therefore will reflect in
part the ability of the portfolio manager to select securities and to make
investment decisions that are suited to achieving the Fund's investment
objective. Due to its active management, the Fund could underperform other
mutual funds with similar investment objectives.
Investments in smaller companies typically involve greater risks than
investments in larger companies. Small company stocks, as a whole, may
experience larger price fluctuations than large company stocks or other
types of investments. Small companies tend to have shorter operating
histories and may have less experienced management and limited product
lines, markets and financial or managerial resources.
Each Fund's performance may be affected by the broad investment environment
in the United States or international securities markets, which is
influenced by, among other things, interest rates, inflation, politics,
fiscal policy, and current events.
Each Fund may not invest 25% or more of its total assets in securities of
companies in any one industry. However, each Fund may invest a substantial
percentage of its assets in certain industries or economic sectors believed
to offer good investment opportunities. If an industry or economic sector
in which the Fund is invested falls out of favor, the Fund's performance
may be negatively affected. This effect may be heightened if the Fund holds
a smaller number of securities.
Each Fund has historically held a small number of securities. Consequently,
if one or more of the securities held in a Fund's portfolio declines in
value or underperforms relative to the market, it may have a greater impact
on the Fund's
42
performance than if the Fund held a larger number of securities. The Funds
may experience more volatility, especially over the short term, than a fund
with a greater number of holdings.
Foreign securities in the Fund's portfolios involve higher risk and may
subject the Fund to higher price volatility. Investing in securities of
foreign issuers involves risks not associated with U.S. investments,
including currency fluctuations, local withholding and other taxes,
different financial reporting practices and regulatory standards, high
costs of trading, changes in political conditions, expropriation,
investment and repatriation restrictions, and settlement and custody risks.
In addition to the risks described above, the Buying Fund is subject to the
additional principal investment risks set forth below. While these
additional risks may also be risks of the Selling Fund, they are not stated
as principal investment risks of the Selling Fund. For more information
regarding the Selling Fund's principal investment risks, see "Principal
Risks" in the Selling Fund's prospectus.
Value stocks involve the risk that they may never reach what the investment
manager believes is their full market value either because the market fails
to recognize the stock's intrinsic worth or the investment manager
misgauged that worth. They also may decline in price, even though in theory
they are already undervalued. Because different types of stocks tend to
shift in and out of favor depending on market and economic conditions, the
Fund's performance may sometimes be lower or higher than that of other
types of funds (such as those emphasizing growth stocks).
Illiquid securities or derivatives (including options, rights, and
warrants) in the Fund's portfolio involve higher risk and may subject the
Fund to higher price volatility.
Option transactions can involve a high degree of risk, including the
possibility of a total loss of the amount invested or more. When options
are purchased in the over-the-counter markets, there are additional risks,
such as counterparty and liquidity risks.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject
to, among other things, deferral of distribution payments, involuntary
redemptions, subordination to bonds and other debt instruments of the
issuer, a lack of liquidity relative to other securities such as common
stocks, and limited voting rights. The market value of securities
convertible into common stocks tends to decline as interest rates increase
and, conversely, tends to increase as interest rates decline. In addition,
because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the
underlying common stock.
The Fund may invest a portion of its net assets in debt securities, which
may be subject to changes in interest rates, the creditworthiness of the
issuers, unanticipated prepayment, and the decline of the bond market in
general.
PERFORMANCE
The following bar charts and tables provide some illustration of the risks of
investing in the Funds by showing, respectively:
- how each Fund's performance has varied for each full calendar year shown in
the bar chart; and
- how each Fund's average annual total returns compare to recognized measures of
market performance shown in the table.
Both the bar chart and the table assume that all distributions have been
reinvested. The performance of different classes varies because of differences
in sales charges and other fees and expenses. How a Fund has performed in the
past (before and after taxes) does not indicate how the Fund will perform in the
future. Performance reflects any fee waivers/expense caps in effect for the
periods reported. In the absence of such fee waivers/expense caps, performance
would have been lower.
Bar Charts. Class A share information is shown in the bar charts; the sales
charge for Class A shares is not reflected in the bar charts.
Tables. The first table shows total returns from hypothetical investments in
Class A, Class B, Class C, Class I and Class R4 shares of RiverSource Partners
Small Cap Equity Fund. The second table shows total returns from hypothetical
investments in Class A, Class B and Class C shares of Seligman Smaller-Cap Value
Fund. Inception date for Class I and Class R4 shares for Seligman Smaller-Cap
Value Fund is Aug. 3, 2009 and they have not been in existence for a full
calendar year, therefore performance information is not shown. These returns are
compared to the indexes shown for the same periods. For purposes of the
performance calculation in the table we assumed:
- the maximum sales charge of 5.75% for Class A shares;
- sales at the end of the period and deduction of the applicable contingent
deferred sales charge ("CDSC") for Class B and Class C;
- no sales charge for RiverSource Partners Small Cap Equity Fund Class I; and
- with the exception of Class A shares, no adjustments for taxes paid by an
investor on the reinvested income and capital gains.
43
AFTER-TAX RETURNS
After-tax returns are shown only for Class A shares. After-tax returns for the
other classes will vary. After-tax returns are calculated using the highest
historical individual federal marginal income tax rate and do not reflect the
impact of state and local taxes. Actual after-tax returns will depend on your
tax situation and most likely will differ from the returns shown in the table.
If you hold your shares in a tax-deferred account, such as a 401(k) plan or an
IRA, the after-tax returns do not apply to you since you will not incur taxes
until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the
return before taxes for the same period if there were no distributions or if the
distributions were small. The return after taxes on distributions and sale of
Fund shares for a period may be greater than the return before taxes for the
same period if there was a tax loss realized on sale of Fund shares. The benefit
of the tax loss (since it can be used to offset other gains) may result in a
higher return.
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (SELLING
FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
<Table>
+46.34% +18.48% +8.75% +9.87% +0.63% -36.59%
2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +20.65% (quarter ended June 30, 2003) and the lowest return for a
calendar quarter was -26.52% (quarter ended Dec. 31, 2008).
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart; if reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +20.41%.
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
<Table>
+1.00% +26.55% +16.18% -17.45% +48.96% +20.58% -3.08% +21.38% +6.26% -41.19%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +25.14% (quarter ended June 30, 2003) and the lowest return for a
calendar quarter was -21.71% (quarter ended Dec. 31, 2008).
The Class A annual total returns presented in the bar chart above do not reflect
the effect of any sales charges, if reflected, returns would be lower than those
shown. The performance of other classes may vary from that shown because of
differences in expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +28.93%.
44
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2008)
<Table>
<Caption>
SINCE
INCEPTION SINCE
(CLASSES A, INCEPTION
B, C & R4) (CLASS I)
1 YEAR 5 YEARS (3/8/02) (3/4/04)
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND:
Class A
Return before taxes -40.28% -3.17% -1.23% N/A
Return after taxes on distributions -40.28% -4.72% -2.42% N/A
Return after taxes on distributions and sale of fund
shares -26.18% -2.74% -1.10% N/A
Class B
Return before taxes -40.20% -3.04% -1.12% N/A
Class C
Return before taxes -37.68% -2.74% -1.11% N/A
Class I
Return before taxes -36.25% N/A N/A -3.43%
Class R4
Return before taxes -36.41% -1.82% -0.16% N/A
Russell 2000(R) Index (reflects no deduction for fees,
expenses or taxes) -33.79% -0.93% +1.27% -2.45%
Lipper Small-Cap Core Funds Index -35.59% -1.01% +0.84% -2.45%
</Table>
The Russell 2000 Index, an unmanaged index, measures the performance of the
2,000 smallest companies in the Russell 3000(R) Index. The index reflects
reinvestment of all distributions and changes in market prices.
The Lipper Small-Cap Core Funds Index includes the 30 largest small-cap core
funds tracked by Lipper Inc. The index's returns include net reinvested
dividends. The Fund's performance is currently measured against this index for
purposes of determining the performance incentive adjustment.
Investors cannot invest directly in an index.
45
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2008) (CONTINUED)
<Table>
<Caption>
SINCE
INCEPTION
(CLASS C)
1 YEAR 5 YEARS 10 YEARS (5/27/99)
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND):
Class A*
Return before taxes -44.56% -3.53% +4.31% N/A
Return after taxes on distributions -44.77% -4.52% +3.77% N/A
Return after taxes on distributions and sale of Fund
shares -28.81% -2.63% +3.95% N/A
Class B
Return before taxes -44.55% -3.41% +4.15% N/A
Class C**
Return before taxes -42.19% -3.11% N/A +3.90%
Russell 2000(R) Value Index
(reflects no deductions for fees, sales charges,
expenses or taxes) -28.92% +0.27% +6.11% +6.30%
Lipper Small-Cap Core Funds Index -35.59% -1.01% +4.06% +4.36%
Lipper Small-Cap Value Funds Index -32.82% -0.53% +5.87% +6.08%
Lipper Small-Cap Core Funds Average -35.80% -1.07% +4.52% +4.58%
Lipper Small-Cap Value Funds Average -33.59% -0.85% +5.69% +5.74%
</Table>
* Effective Jan. 7, 2008, the maximum initial sales charge on investments in
Class A shares of less than $50,000 is 5.75%. Although for all periods
presented in the table the Fund's Class A total returns reflect a 5.75%
initial sales charge, the actual returns for periods prior to Jan. 7, 2008
would have been higher if a 4.75% maximum initial sales charge then in
effect was incurred.
** Effective June 4, 2007, there is no initial sales change on purchases of
Class C shares. Although for all periods presented in the table the Fund's
Class C share returns do not reflect an initial sales charge, the actual
returns for periods prior to June 4, 2007 would have been lower if a 1.00%
maximum initial sales charge then in effect was incurred.
The Russell 2000 Value Index is an unmanaged benchmark that assumes the
reinvestment of all distributions, if any and excludes the effect of expenses,
fees, sales charges and taxes. The Russell 2000 Value Index measures the
performance of those Russell 2000 companies (small-cap value segment of the U.S.
equity universe) with lower price-to-book ratios and lower forecasted growth
values, as determined by the Frank Russell Company.
The Lipper Small-Cap Core Funds Index (the Lipper Index) includes the 30 largest
small-cap core funds tracked by Lipper Inc. The index's returns include net
reinvested dividends.
The Lipper Small-Cap Value Funds Index (the Lipper Index) includes the 30
largest small-cap value funds tracked by Lipper Inc. The index's returns include
net reinvested dividends.
The Lipper Small-Cap Value Funds Average (the Lipper Average) is an unmanaged
benchmark that assumes the reinvestment of all distributions, if any and
excludes the effect of fees, sales charges and taxes. The Lipper Small-Cap Value
Funds Average measures the performance of funds that, by portfolio practice,
invest at least 75% of their equity assets in companies with market
capitalizations (on a three-year weighted basis) below Lipper's USDE small-cap
ceiling. Small-cap value funds typically have a below-average price-to-earnings
ratio, price-to-book ratio and three-year sales-per-share growth value compared
to the S&P Small Cap 600 Index.
The Lipper Small-Cap Core Funds Average (the Lipper Average) is an unmanaged
benchmarks that assume the reinvestment of all distributions, if any and
excludes the effect of fees, sales charges and taxes. The Lipper Small-Cap Core
Funds Average measure the performance of funds that, by portfolio practice,
invest at least 75% of their equity assets in companies with market
capitalizations (on a three-year weighted basis) below Lipper's USDE small-cap
ceiling. Small-cap core funds typically have an average price-to-earnings ratio,
price to-book ratio and three-year sales-per-share growth value, compared to the
S&P SmallCap 600 Index.
As of the date of this proxy statement/prospectus, Lipper classifies the Fund as
a Small-Cap Core Fund. Investors cannot invest directly in an average or an
index.
For Seligman Smaller-Cap Value Fund, on [date], the Lipper Index replaced the
Lipper Average as the Fund's secondary benchmark. The Lipper Average includes
all funds categorized by Lipper within the broad universe of funds in the Lipper
Average, whereas the Lipper Index includes only a select peer group from the
Lipper Average, as described above. This change was made to bring the selection
of the Seligman Fund secondary benchmarks in line with the practice of the
RiverSource Family of Funds, which would permit a common shareholder experience
and provide a more focused peer group for performance comparison purposes.
Information on both the Lipper Index and the Lipper Average will be included for
a one-year transition period. Thereafter, only the Lipper Index will be
included.
46
PROPOSAL 4. REORGANIZATION OF RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND INTO
SELIGMAN FRONTIER FUND
COMPARISON OF THE SELLING FUND AND THE BUYING FUND
Both the Selling Fund and the Buying Fund:
- Have RiverSource Investments as an investment manager.
- Have the same polices for buying and selling shares and the same exchange
rights.
- Have the same distribution policies.
- Offer the same classes of shares: A, B, C, I, R2, R3, R4 and R5.
- Are structured as a series of capital stock of an open-end management
investment company. The Selling Fund is organized as a series of a Minnesota
corporation and the Buying Fund is organized as a Maryland corporation. Please
see Exhibit D to this proxy statement/prospectus for more information
regarding the differences between the rights of shareholders of the Buying
Fund and the shareholders of the Selling Fund.
COMPARISON OF INVESTMENT OBJECTIVES
Both Funds seek growth of capital. Both Funds are intended for long-term
investors and are not intended as a short-term trading vehicle. Because any
investment involves risk, there is no assurance this objective can be achieved.
Only shareholders can change the Fund's objective.
The investment objectives for the Funds are as follows:
SELLING FUND: RiverSource Partners Small Cap Growth Fund seeks to
provide shareholders with long-term capital growth.
BUYING FUND: Seligman Frontier Fund seeks to provide shareholders with
growth of capital. Income may be considered but is
incidental to the Fund's investment objective.
COMPARISON OF PRINCIPAL INVESTMENT STRATEGIES
Each Fund invests primarily in equity securities of small U.S. companies with
market capitalizations of up to $2 billion or less at the time of purchase by
the Fund. The Selling Fund, with respect to its 80% policy, may also invest in
companies that have market capitalizations that fall within the range of those
included in the Russell 2000 Growth Index. While the Selling Fund invests at
least 80% of its net assets in small cap companies, the Buying Fund invests at
least 65% of its net assets in small cap companies.
Although RiverSource Investments serves as investment manager of both Funds, the
Selling Fund was, until Aug. 10, 2009, subadvised by Essex Investment Management
(Essex) and UBS Global Asset Management (UBS). The Selling Fund's Board of
Directors terminated the subadvisory contracts of Essex and UBS for managing the
Selling Fund's portfolio. Since Aug. 10, 2009, RiverSource Investments has
solely managed the Selling Fund.
47
Detailed strategies for the Selling Fund and the Buying Fund are set forth
below:
<Table>
<Caption>
--------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND
(SELLING FUND) SELIGMAN FRONTIER FUND (BUYING FUND)
--------------------------------------------------------------------------------------------
The Fund's assets primarily are invested in Although the Fund may invest in the
equity securities. Under normal market securities of any company, the Fund invests
conditions, at least 80% of the Fund's net at least 65% of its net assets (including any
assets are invested in securities of amounts borrowed for investment purposes),
companies with market capitalizations, at the determined at the time of investment, in
time of investment, of up to $2 billion, or equity securities of small U.S. companies
that fall within the range of the Russell (companies with market capitalization, at the
2000 Growth Index. The Fund will provide time of purchase by the Fund, of $2 billion
shareholders with at least 60 days' notice of or less).
any change in the 80% policy.
The Fund invests primarily in common stocks;
however, it may also invest in preferred
stocks, securities convertible into common
stocks, and stock purchase warrants if the
investment manager believes these investments
offer capital growth opportunities. The Fund
may also invest in American Depositary
Receipts ("ADRs"), which are publicly-traded
instruments generally issued by domestic
banks or trust companies that represent a
security of a foreign issuer. ADRs are quoted
and settled in U.S. dollars. The Fund uses
the same criteria in evaluating these
securities as it does for common stocks.
The Fund may invest up to 15% of its net
assets in illiquid securities (i.e.,
securities that cannot be readily sold) and
may invest up to 25% of its total assets
directly in foreign securities. The Fund may
also purchase put options in an attempt to
hedge against a decline in the price of
securities that it holds. A put option gives
the Fund the right to sell an underlying
security at a particular price during a fixed
period of time. The Fund generally does not
invest a significant amount of its assets, if
any, in illiquid securities, foreign
securities or put options.
The Fund intends to comply with Rule 4.5 of
the Commodity Futures Trading Commission
(CFTC), under which a mutual fund is exempt
from the definition of a "commodity pool
operator." The Fund, therefore, is not
subject to registration or regulation as a
pool operator, meaning that the Fund may
invest in futures contracts without
registering with the CFTC.
The Fund's investment objective may be
changed only with shareholder approval. The
principal investment strategies may be
changed without shareholder approval. Any
changes to these strategies, however, must be
approved by the Fund's Board of Directors.
The Fund's Board of Directors may change the
parameters by which "small companies" are
defined if it concludes that such a change is
appropriate.
--------------------------------------------------------------------------------------------
</Table>
In addition to the principal investment strategies set forth above, each Fund
also has the following principal investment strategies:
The Fund uses a bottom-up stock selection approach. This means that the
investment manager concentrates on individual company fundamentals, rather than
on a particular market sector. The investment manager may select investments for
either their short-, medium or long-term prospects. In selecting investments for
the Fund, the investment manager maintains a disciplined investment process that
focuses on downside risks as well as upside potential and seeks to identify
companies that it believes display attractive growth, profitability or valuation
characteristics, including one or more of the following:
- Positive earnings and/or earnings growth rate
- Positive revenue growth
- Positive operating cash flows
- Quality management
- Unique competitive advantages
In deciding whether to sell a security, the investment manager considers
whether:
- its target price is reached,
- its valuation becomes excessive,
- its earnings or revenue growth are disappointing,
- its underlying fundamentals have deteriorated, or
- more attractive investment opportunities are believed to be available.
48
COMPARISON OF FUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
fundamental investment policies of the Buying Fund. RiverSource Investments does
not believe that the differences between the fundamental investment policies of
the Funds result in any material difference in the way the Funds have been
managed or in the way the combined Fund will be managed. For purposes of this
discussion, a "fundamental" investment policy is one that may not be changed
without a shareholder vote. The Funds' fundamental investment policies are set
forth below:
----------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP GROWTH
POLICY FUND (SELLING FUND) SELIGMAN FRONTIER FUND (BUYING FUND)
----------------------------------------------------------------------------------------------------
REPURCHASE No fundamental policy, see fundamental The Fund will not enter into repurchase
AGREEMENTS policy with respect to lending, below. agreements of more than one week's
duration if more than 10% of its net
assets would be so invested.
----------------------------------------------------------------------------------------------------
COMMODITIES The Fund will not buy or sell physical The Fund may not purchase or sell
commodities unless acquired as a result commodities or commodity contracts,
of ownership of securities or other except to the extent permissible under
instruments, except this shall not applicable law and interpretations, as
prevent the Fund from buying or selling they may be amended from time to time.
options and futures contracts or from
investing in securities or other
instruments backed by, or whose value is
derived from, physical commodities.
----------------------------------------------------------------------------------------------------
MARGIN No fundamental policy. The Fund may not purchase securities on
margin except as permitted by the 1940
Act or any rule thereunder, any SEC or
SEC staff interpretations thereof or any
exemptions therefrom which may be
granted by the SEC.
----------------------------------------------------------------------------------------------------
ISSUING SENIOR The Fund will not issue senior The Fund may not issue senior
SECURITIES securities, except as permitted under securities, except as permitted by the
the 1940 Act, the rules and regulations 1940 Act or any rule thereunder, any SEC
thereunder and any applicable exemptive or SEC staff interpretations thereof or
relief. any exemptions therefrom which may be
granted by the SEC.
----------------------------------------------------------------------------------------------------
BORROWING MONEY The Fund will not borrow money, except The Fund may not borrow money, except as
for temporary purposes (not for permitted by the 1940 Act or any rule
leveraging or investment) in an amount thereunder, any SEC or SEC staff
not exceeding 33 1/3% of its total interpretations thereof or any
assets (including the amount borrowed) exemptions therefrom which may be
less liabilities (other than borrowings) granted by the SEC.
immediately after the borrowings.
----------------------------------------------------------------------------------------------------
LENDING The Fund will not lend securities or The Fund may not make loans, except as
participate in an interfund lending permitted by the 1940 Act or any rule
program if the total of all such loans thereunder, any SEC or SEC staff
would exceed 33 1/3% of the Fund's total interpretations thereof or any
assets except this fundamental exemptions therefrom which may be
investment policy shall not prohibit the granted by the SEC.
Fund from purchasing money market
securities, loans, loan participation or
other debt securities, or from entering
into repurchase agreements.
----------------------------------------------------------------------------------------------------
UNDERWRITING The Fund will not act as an underwriter The Fund may not underwrite the
(sell securities for others). However, securities of other issuers, except
under the securities laws, the Fund may insofar as the Fund may be deemed an
be deemed to be an underwriter when it underwriter under the 1933 Act in
purchases securities directly from the disposing of a portfolio security or in
issuer and later resells them. connection with investments in other
investment companies.
----------------------------------------------------------------------------------------------------
REAL ESTATE The Fund will not buy or sell real The Fund may not purchase or hold any
estate, unless acquired as a result of real estate, except the Fund may invest
ownership of securities or other in securities secured by real estate or
instruments, except this shall not interests therein or issued by persons
prevent the Fund from investing in (including real estate investment
securities or other instruments backed trusts) which deal in real estate or
by real estate or securities of interests therein.
companies engaged in the real estate
business or real estate investment
trusts. For purposes of this policy,
real estate includes real estate limited
partnerships.
----------------------------------------------------------------------------------------------------
</Table>
49
----------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP GROWTH
POLICY FUND (SELLING FUND) SELIGMAN FRONTIER FUND (BUYING FUND)
----------------------------------------------------------------------------------------------------
DIVERSIFICATION The Fund will not purchase more than 10% The Fund may not make any investment
of the outstanding voting securities of inconsistent with the Fund's
an issuer, except that up to 25% of the classification as a diversified company
Fund's assets may be invested without under the 1940 Act.
regard to this 10% limitation.
The Fund will not invest more than 5% of
its total assets in securities of any
company, government, or political
subdivision thereof, except the
limitation will not apply to investments
in securities issued or guaranteed by
the U.S. government, its agencies, or
instrumentalities, or other investment
companies, and except that up to 25% of
the Fund's total assets may be invested
without regard to this 5% limitation.
----------------------------------------------------------------------------------------------------
INDUSTRY The Fund will not concentrate in any one The Fund may not invest 25% or more of
CONCENTRATION industry. According to the present its total assets, at market value, in
interpretation by the SEC, this means the securities of issuers in any
that up to 25% of the Fund's total particular industry, provided that this
assets, based on current market value at limitation shall exclude securities
time of purchase, can be invested in any issued or guaranteed by the U.S.
one industry. government or any of its agencies or
instrumentalities.
----------------------------------------------------------------------------------------------------
DEALINGS WITH No fundamental policy. The Fund may not purchase or hold the
DIRECTORS AND securities of any issuer (other than the
OFFICERS shares of the Fund), if to its
knowledge, directors or officers of the
Fund individually owning beneficially
more than 0.5% of the securities of that
issuer own in the aggregate more than 5%
of such securities.
----------------------------------------------------------------------------------------------------
COMPARISON OF NONFUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
nonfundamental investment policies (policies that may be changed without a
shareholder vote) of the Buying Fund. Both Funds are also subject to the
following nonfundamental policies:
- No more than 15% of the Fund's net assets will be held in securities and other
instruments that are illiquid.
- Up to 25% of the Fund's net assets may be invested in foreign investments.
COMPARISON OF PRINCIPAL RISK FACTORS
Although the Funds describe them differently, the principal investment risks
associated with the Buying Fund and the Selling Fund are similar because the
Funds have similar investment objectives and principal investment strategies.
However, the Selling Fund may expose shareholders to a greater risk of investing
in small capitalization companies than the Buying Fund due to the Selling Fund's
investment strategy of investing at least 80% of its net assets in securities of
small capitalization companies, while the Buying Fund's investment strategy is
to invest at least 65% of its net assets in securities of small capitalization
companies. The actual risks of investing in each Fund depend on the securities
held in each Fund's portfolio and on market conditions, both of which change
over time. Both Funds are subject to the principal investment risks described
below.
Stock prices fluctuate. Therefore, as with any fund that invest in stocks,
the Fund's net asset value will fluctuate, especially in the short term.
You may experience a decline in the value of your investment and you could
lose money if you sell your shares at a price lower than you paid for them.
The Fund's performance may be affected by the broad investment environment
in the United States or international securities markets, which is
influenced by, among other things, interest rates, inflation, politics,
fiscal policy, and current events.
Foreign securities in the Fund's portfolio involve higher risk and may
subject the Fund to higher price volatility. Investing in securities of
foreign issuers involves risks not associated with U.S. investments,
including currency fluctuations, local withholding and other taxes,
different financial reporting practices and regulatory standards, high
costs of trading, changes in political conditions, expropriation,
investment and repatriation restrictions, and settlement and custody risks.
The Fund is actively managed and its performance therefore will reflect in
part the ability of the portfolio manager to select securities and to make
investment decisions that are suited to achieving the Fund's investment
objectives. Due to their active management, the Fund could underperform
other mutual funds with similar investment objectives.
50
The Fund may actively and frequently trade securities in its portfolio to
carry out its principal strategies. A high portfolio turnover rate
increases transaction costs, which may increases the Fund's expenses.
Frequent and active trading may also cause adverse tax consequences for
investors in the Fund due to increase in short-term capital gains.
Small-company stocks, as a whole, may experience larger price fluctuations
than large-company stocks or other types of investments. Small companies
tend to have shorter operating histories and may have less experienced
management and limited product lines, markets and financial and managerial
resources. During periods of investor uncertainty, investor sentiment may
favor large, well-known companies over small, lesser-known companies.
In addition to the risks described above, the Buying Fund is subject to the
additional principal investment risks set forth below. While these
additional risks may also be risks of the Selling Fund, they are not stated
as principal investment risks of the Selling Fund. For more information
regarding the Selling Fund's principal investment risks, see "Principal
Risks" in the Selling Fund's prospectus.
Derivatives (including rights and warrants) and illiquid securities in the
Fund's portfolio involve higher risk and may subject the Fund to higher
price volatility.
The Fund may not invest 25% or more of its total assets in securities of
companies in any one industry. The Fund may, however, invest a substantial
percentage of its assets in certain industries or economic sectors believed
by the investment manager to offer good investment opportunities. If an
industry or economic sector in which the Fund is invested falls out of
favor, the Fund's performance may be negatively affected.
There are special risks associated with investing in preferred stocks and
securities convertible into common stocks. Preferred stocks may be subject
to, among other things, deferral of distribution payments, involuntary
redemptions, subordination to bonds and other debt instruments of the
issuer, a lack of liquidity relative to other securities such as common
stocks, and limited voting rights. The market value of securities
convertible into common stocks tends to decline as interest rates increase
and, conversely, tends to increase as interest rates decline. In addition,
because of the conversion feature, the market value of convertible
securities tends to vary with fluctuations in the market value of the
underlying common stock.
PERFORMANCE
The following bar charts and tables provide some illustration of the risks of
investing in the Funds by showing, respectively:
- how each Fund's performance has varied for each full calendar year shown in
the bar chart; and
- how each Fund's average annual total returns compare to recognized measures of
market performance shown in the table.
Both the bar chart and the table assume that all distributions have been
reinvested. The performance of different classes varies because of differences
in sales charges and other fees and expenses. How a Fund has performed in the
past (before and after taxes) does not indicate how the Fund will perform in the
future. Performance reflects any fee waivers/expense caps in effect for the
periods reported. In the absence of such fee waivers/expense caps, performance
would have been lower.
Bar Charts. Class A share information is shown in the bar charts; the sales
charge for Class A shares is not reflected in the bar charts.
Tables. The first table shows total returns from hypothetical investments in
Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5
shares of RiverSource Partners Small Cap Growth Fund. The second table shows
total returns from hypothetical investments in Class A, Class B, Class C, Class
R2 (formerly Class R) and Class R5 (formerly Class I) shares of Seligman
Frontier Fund. Inception date for Class I, Class R3 and Class R4 shares of
Seligman Frontier Fund is Aug. 3, 2009 and they have not been in existence for a
full calendar year, therefore performance information is not shown. These
returns are compared to the indexes shown for the same periods. For purposes of
the performance calculation in the table we assumed:
- the maximum sales charge of 5.75% for Class A shares;
- sales at the end of the period and deduction of the applicable contingent
deferred sales charge ("CDSC") for Class B and Class C;
- no sales charge for RiverSource Partners Small Cap Growth Fund Class I, Class
R2, Class R3, Class R4 and Class R5 shares and for Seligman Frontier Fund
Class R2 and Class R5 shares; and
- with the exception of Class A shares, no adjustments for taxes paid by an
investor on the reinvested income and capital gains.
51
AFTER-TAX RETURNS
After-tax returns are shown only for Class A shares. After-tax returns for the
other classes will vary. After-tax returns are calculated using the highest
historical individual federal marginal income tax rate and do not reflect the
impact of state and local taxes. Actual after-tax returns will depend on your
tax situation and most likely will differ from the returns shown in the table.
If you hold your shares in a tax-deferred account, such as a 401(k) plan or an
IRA, the after-tax returns do not apply to you since you will not incur taxes
until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the
return before taxes for the same period if there were no distributions or if the
distributions were small. The return after taxes on distributions and sale of
Fund shares for a period may be greater than the return before taxes for the
same period if there was a tax loss realized on sale of Fund shares. The benefit
of the tax loss (since it can be used to offset other gains) may result in a
higher return.
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (SELLING
FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
-36.31% +44.33% +4.39% +4.99% +9.02% +13.30% -43.43%
2002 2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +23.57% (quarter ended June 30, 2003) and the lowest return for a
calendar quarter was -28.05% (quarter ended Dec. 31, 2008).
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart; if reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +21.26%.
SELIGMAN FRONTIER FUND (BUYING FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+13.28% -14.19% -8.72% -27.07% +37.01% +13.09% -3.91% +20.42% +6.20% -42.31%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +26.98% (quarter ended Dec. 31, 1999) and the lowest return for a
calendar quarter was -26.72% (quarter ended Dec. 31, 2008).
The Class A annual total returns presented in the bar chart above do not reflect
the effect of any sales charges, if reflected, returns would be lower than those
shown. The performance of other classes may vary from that shown because of
differences in expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +28.99%.
52
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2008)
<Table>
<Caption>
SINCE SINCE
INCEPTION SINCE INCEPTION
(CLASSES A, INCEPTION (CLASSES R2,
B, C & R4) (CLASS I) R3 & R5)
1 YEAR 5 YEARS (1/24/01) (3/4/04) (12/11/06)
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND:
Class A
Return before taxes -46.64% -6.29% -5.96% N/A N/A
Return after taxes on distributions -46.64% -7.22% -6.54% N/A N/A
Return after taxes on distributions and sale of
fund shares -30.32% -5.15% -4.83% N/A N/A
Class B
Return before taxes -46.72% -6.25% -5.99% N/A N/A
Class C
Return before taxes -44.48% -5.97% -6.00% N/A N/A
Class I
Return before taxes -43.07% N/A N/A -5.66% N/A
Class R2
Return before taxes -43.49% N/A N/A N/A -20.12%
Class R3
Return before taxes -43.17% N/A N/A N/A -19.83%
Class R4
Return before taxes -43.30% -5.04% -5.10% N/A N/A
Class R5
Return before taxes -43.20% N/A N/A N/A -19.70%
Russell 2000(R) Growth Index (reflects no deduction
for fees, expenses or taxes) -38.54% -2.35% -3.08% -3.90% -18.95%
Lipper Small-Cap Growth Funds Index -42.62% -4.06% -3.94% -5.44% -20.62%
</Table>
The Russell 2000 Growth Index, an unmanaged index, measures the performance of
those Russell 2000 Index companies with higher price-to-book ratios and higher
forecasted growth values. The index reflects reinvestment of all distributions
and changes in market prices.
The Lipper Small-Cap Growth Funds Index includes the 30 largest small-cap growth
funds tracked by Lipper Inc. The index's returns include net reinvested
dividends. The Fund's performance is currently measured against this index for
purposes of determining the performance incentive adjustment.
Investors cannot invest directly in an index.
53
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2008) (CONTINUED)
<Table>
<Caption>
SINCE SINCE SINCE
INCEPTION INCEPTION INCEPTION
(CLASS C) (CLASS R2) (CLASS R5)
1 YEAR 5 YEARS 10 YEARS (5/27/99) (4/30/03) (11/30/01)
SELIGMAN FRONTIER FUND
Class A*
Return before taxes -45.62% -5.46% -3.92% N/A N/A N/A
Return after taxes on distributions -45.62% -6.66% -4.72% N/A N/A N/A
Return after taxes on distributions and
sale of Fund shares -29.65% -4.39% -3.16% N/A N/A N/A
Class B
Return before taxes -45.56% -5.28% -4.08% N/A N/A N/A
Class C**
Return before taxes -43.12% -4.96% N/A -2.90% N/A N/A
Class R2
Return before taxes -42.43% -4.52% N/A N/A +0.60% N/A
Class R5
Return before taxes -41.94% -3.68% N/A N/A N/A -1.77%
Russell 2000 Growth Index -38.54% -2.35% -0.76% -1.33% -27.45% -0.33%
Lipper Small-Cap Growth Funds Index -42.62% -4.06% +0.92% +0.99% +2.16% -1.43%
Lipper Small-Cap Growth Funds Average -41.99% -3.67% +1.18% +0.91% +2.54% -1.40%
</Table>
* Effective Jan. 7, 2008, the maximum initial sales charge on investments in
Class A shares of less than $50,000 is 5.75%. Although for all periods
presented in the table the Fund's Class A total returns reflect a 5.75%
initial sales charge, the actual returns for periods prior to Jan. 7, 2008
would have been higher if a 4.75% maximum initial sales charge then in
effect was incurred.
** Effective June 4, 2007, there is no initial sales change on purchases of
Class C shares. Although for all periods presented in the table the Fund's
Class C share returns do not reflect an initial sales charge, the actual
returns for periods prior to June 4, 2007 would have been lower if a 1.00%
maximum initial sales charge then in effect was incurred.
The Russell 2000 Growth Index ("Russell Index") is an unmanaged benchmark that
assumes the reinvestment of all distributions, if any and excludes the effect of
expenses, fees, sales charges and taxes. The Russell Index measures the
performance of small-company growth stocks, as determined by the Frank Russell
Company.
The Lipper Small-Cap Growth Funds Index (Lipper Index) includes the 30 largest
small-cap growth funds tracked by Lipper Inc. The index's returns include net
reinvested dividends.
The Lipper Small-Cap Growth Funds Average (Lipper Average) is an unmanaged
benchmark that assumes the reinvestment of all distributions, if any and
excludes the effect of fees, sales charges and taxes. The Lipper Small-Cap
Growth Funds Average is an average of all funds that invest at least 75% of
their equity assets in companies with market capitalizations (on a three-year
weighted basis) below Lipper's U.S. Diversified Equity Small-Cap ceiling ($3.8
billion as of [December 31, 2008]). Small-cap growth funds typically have an
above-average price-to-earnings ratio, price-to-book ratio, and three-year
sales-per-share growth value compared to the S&P SmallCap 600 Index.
Investors cannot invest directly in an average or an index.
For Seligman Frontier Fund, on Nov. 1, 2009, the Lipper Index replaced the
Lipper Average as the Fund's secondary benchmark. The Lipper Average includes
all funds categorized by Lipper within the broad universe of funds in the Lipper
Average, whereas the Lipper Index includes only a select peer group from the
Lipper Average, as described above. This change was made to bring the selection
of the Seligman Fund secondary benchmarks in line with the practice of the
RiverSource Family of Funds, which would permit a common shareholder experience
and provide a more focused peer group for performance comparison purposes.
Information on both the Lipper Index and the Lipper Average will be included for
a one-year transition period. Thereafter, only the Lipper Index will be
included.
54
PROPOSAL 5. REORGANIZATION OF SELIGMAN GLOBAL SMALLER COMPANIES FUND INTO
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
COMPARISON OF THE SELLING FUND AND THE BUYING FUND
Both the Selling Fund and the Buying Fund:
- Have RiverSource Investments as an investment manager; however, the Selling
Fund is subadvised by Wellington Management Company, LLP and the Buying Fund
is subadvised by Batterymarch Financial Management, Inc. and Columbia Wanger
Asset Management, L.P.
- Have the same policies for buying and selling shares and the same exchange
rights.
- Have the same distribution policies.
- Offer classes A, B, C, R2 and R5 (the Buying Fund also offers classes I and
R4).
- Are structured as a series of an open-end management investment company. The
Buying Fund is a series of a Minnesota corporation, whereas the Selling Fund
is a series of a Maryland corporation. Please see Exhibit D to this proxy
statement/prospectus for more information regarding the differences between
the rights of shareholders of the Buying Fund and the shareholders of the
Selling Fund.
COMPARISON OF INVESTMENT OBJECTIVES
Both Funds seek growth of capital. Both Funds are intended for long-term
investors and are not intended as short-term trading vehicle. Because any
investment involves risk, there is no assurance the Fund's objective can be
achieved. Only shareholders can change the Fund's objective.
The investment objectives for the Funds are as follows:
SELLING FUND: Seligman Global Smaller Companies Fund seeks long-term
capital appreciation.
BUYING FUND: RiverSource Partners International Small Cap Fund seeks
to provide shareholders with long-term growth of capital.
COMPARISON OF PRINCIPAL INVESTMENT STRATEGIES
Both Funds invest in equity securities of smaller non-U.S. companies. However,
the Selling Fund invests 80% in smaller U.S. and non-U.S. companies and may
invest in companies domiciled in any country, although it typically invests in
developed countries, whereas the Buying Fund invests 80% in small companies
whose market capitalization falls within the range of capitalization of
companies in the S&P Global ex-U.S. Small Cap Index and may invest in mature
markets and in emerging markets. The Selling Fund generally will invest at least
40% of its net assets in companies that maintain their principal place of
business or conduct their principal business activities outside the U.S., have
their securities traded on non-U.S. exchanges or have been formed under the laws
of non-U.S. countries, while the Buying Fund invests primarily in equity
securities of non-U.S. companies.
RiverSource Investments serves as the investment manager for both Funds and is
responsible for the oversight of the Fund's subadviser(s) which provide day-to-
day management of the Fund. The Selling Fund is subadvised by Wellington
Management Company, LLP and the Buying Fund is subadvised by Batterymarch
Financial Management, Inc. ("Batterymarch") and Columbia Wanger Asset
Management, L.P. ("Columbia WAM") (collectively, the "Subadvisers").
Detailed investment strategies for the Selling Fund and the Buying Fund are set
forth below:
SELIGMAN GLOBAL SMALLER COMPANIES FUND (SELLING FUND)
The Fund generally invests at least 80% of its assets in equity securities of
smaller U.S. and non-U.S. companies. The Fund may invest in companies domiciled
in any country, although it typically invests in developed countries. Relative
to its benchmark, the Fund is generally neutrally weighted across the major
geographic regions. Shareholders will be provided with at least 60 days prior
written notice of any change to the 80% investment policy.
Under normal market conditions, the Fund generally will invest at least 40% of
its net assets in companies that maintain their principal place of business or
conduct their principal business activities outside the U.S., have their
securities traded on non-U.S. exchanges or have been formed under the laws of
non-U.S. countries. The portfolio manager may reduce this 40% minimum investment
amount to 30% if it believes that market conditions for these types of companies
or specific foreign markets are unfavorable. The Fund considers a company to
conduct its principal business activities outside the U.S. if it derives at
least 50% of its revenue from business outside the U.S. or has at least 50% of
its assets outside the U.S.
The Fund uses an investment approach that is bottom-up focused, looking for both
extended growth opportunities and special situations (including value stocks)
within each region.
55
In selecting individual securities, the portfolio managers look for companies
that they believe display the following characteristics:
- Extended growth opportunities or special situations where there is a potential
for improvement in overall operations
- A well articulated and believable business model
- Quality management
- Sustainable competitive advantage
- Strong financial characteristics
The Fund generally sells a stock if the portfolio managers believe its target
price has been reached, its earnings are disappointing, its revenue or earnings
growth has slowed, its underlying fundamentals have deteriorated, or the
portfolio managers are finding better opportunities elsewhere. The Fund may also
sell a stock if the portfolio managers believe that negative country or regional
factors may affect a company's outlook, to manage risk in the Fund, or to meet
cash requirements.
The Fund may invest in all types of securities, many of which will be
denominated in currencies other than the U.S. dollar. The Fund normally
concentrates its investments in common stocks; however, it may invest in other
types of equity securities, including securities convertible into or
exchangeable for common stock, depositary receipts, and rights and warrants to
purchase common stock. The Fund also may invest up to 20% of its assets in
preferred stock and investment-grade or comparable quality debt securities.
The Fund may invest up to 15% of its net assets in illiquid securities (i.e.,
securities that cannot be readily sold), and may from time to time enter into
forward foreign currency exchange contracts in an attempt to manage the risk of
adverse changes in currencies. The Fund may also purchase put options in an
attempt to hedge against a decline in the price of securities it holds in its
portfolio. A put option gives the Fund the right to sell an underlying security
at a particular price during a fixed period of time. Forward foreign currency
exchange contracts and put options on securities may not be available to the
Fund on reasonable terms in many situations and the Fund may frequently choose
not to enter into such contracts or purchase such options even when they are
available.
The Fund may invest in futures contracts. The Fund intends to comply with Rule
4.5 of the Commodity Futures Trading Commission (CFTC), under which a mutual
fund is exempt from the definition of a "commodity pool operator." The Fund,
therefore, is not subject to registration or regulation as a pool operator,
meaning that the Fund may invest in futures contracts without registering with
the CFTC.
The Fund may also invest up to 10% of its assets in exchange-traded funds
(ETFs). ETFs are traded, like individual stocks, on an exchange, but they
represent baskets of securities that seek to track the performance of certain
indices. The indices include not only broad-market indices but more specific
indices as well, including those relating to particular sectors, countries and
regions. The Fund may invest in ETFs for short-term cash management purposes or
as part of its overall investment strategy.
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies (e.g., investing less than 30% of its
assets in companies outside the U.S.) in seeking to minimize extreme volatility
caused by adverse market, economic, political, or other conditions. This could
prevent the Fund from achieving its objective.
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (BUYING FUND)
The Fund invests primarily in equity securities of non-U.S. companies. Under
normal market conditions, the Fund will invest at least 80% of its net assets
(including any borrowings for investment purposes) in the stocks of small
companies. The Fund considers small companies to be those whose market
capitalization falls within the range of companies in the S&P Global ex-U.S.
Small Cap Index. The market capitalization within the Index will vary. Over
time, the capitalizations of the companies in the Index will change. As they do,
the size of the companies in which the Fund invests may change. As long as an
investment continues to meet the Fund's other investment criteria, the Fund may
choose to continue to hold a stock even if the company's market capitalization
grows beyond the market capitalization of the largest company held within the
Index or falls below the market capitalization of the smallest company held
within the Index. The Fund may invest in mature markets (such as the United
Kingdom, Canada, and Japan) and in emerging markets (such as Korea, Mexico, and
Russia). The Fund will hold both growth and value stocks and at times may favor
one more than the other based on available opportunities. The Fund will provide
shareholders with at least 60 days' notice of any change in the 80% policy.
RiverSource Investments serves as the investment manager to the Fund and is
responsible for the oversight of the Fund's subadvisers, Batterymarch and
Columbia WAM, which provide day-to-day management for the Fund. RiverSource
Investments, subject to the oversight of the Fund's Board, decides the
proportion of the Fund assets to be managed by each subadviser, and may change
these proportions at any time. The two Subadvisers act independently of each
other and use their
56
own methodology for selecting investments. The two Subadvisers employ an active
investment strategy that focuses on companies that the asset manager believes
will increase in value over time.
BATTERYMARCH
Batterymarch uses disciplined, systematic techniques to analyze a very broad
universe of approximately 2,500 liquid stocks. All 2,500 liquid stocks are
ranked on a daily basis across five fundamental dimensions: cash flow, earnings
growth, expectations, value and technicals. Decisions to buy or sell particular
stocks are based on their daily rankings; the best-ranked stocks are bought,
while those that rank poorly are sold. Batterymarch determines region/sector
allocations using proprietary models that incorporate both bottom-up stock data
and the opinions of the investment team. Region/sector exposures are controlled
for purposes of risk management.
Batterymarch may use foreign currency futures contracts or foreign currency
forward contracts, with terms of up to six months in an effort to hedge existing
positions or currency fluctuations. Batterymarch also may purchase foreign
currency for immediate settlement in order to purchase foreign securities.
COLUMBIA WAM
Columbia WAM invests primarily in stocks of small- and medium-sized companies
based both outside and in the U.S. with capitalizations of less than $5 billion
at the time of purchase. Columbia WAM may choose to hold the stock even if it
grows beyond that capitalization limit. Columbia WAM believes that companies
with market capitalizations of less than $5 billion, which are not as well known
by financial analysts as larger companies, may offer higher return potential
than stocks of larger companies. Columbia WAM invests in the stocks of foreign
companies in developed markets (for example, Japan, Canada and the United
Kingdom) and in emerging markets (for example, China, India and Brazil).
In making investments for the Fund, Columbia WAM typically looks for companies
with:
- A strong business franchise that offers growth potential.
- Products and services that give a company a competitive advantage.
- A stock price that Columbia WAM believes is reasonable relative to the assets
and earning power of the company.
Columbia WAM may sell a portfolio holding if the security reaches Columbia WAM's
price target, if the company has a deterioration of fundamentals, such as
failing to meet key operating benchmarks or if Columbia WAM believes other
securities are more attractive. Columbia WAM also may sell a portfolio holding
to fund redemptions.
Columbia WAM may use foreign currency futures contracts or foreign currency
forward contracts, with terms of up to one year in an effort to hedge existing
positions, interest rate fluctuations or currency fluctuations. Columbia WAM
also may purchase foreign currency for intermediate settlement in order to
purchase foreign securities.
COMPARISON OF FUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
fundamental investment policies of the Buying Fund. RiverSource Investments does
not believe that the differences between the fundamental investment policies of
the Funds result in any material differences in the way the Funds have been
managed or in the way the combined Fund will be managed. For purposes of this
discussion, a "fundamental" investment policy is one that may not be changed
without a shareholder vote. The Funds' fundamental investment policies are set
forth below:
---------------------------------------------------------------------------------------------------
SELIGMAN GLOBAL SMALLER COMPANIES FUND RIVERSOURCE PARTNERS INTERNATIONAL SMALL
POLICY (SELLING FUND) CAP FUND (BUYING FUND)
---------------------------------------------------------------------------------------------------
REPURCHASE The Fund will not enter into No fundamental policy, see fundamental
AGREEMENTS repurchase agreements of more than one policy with respect to lending, below.
week's duration if more than 10% of
its net assets would be invested in
such agreements and other illiquid
securities.
---------------------------------------------------------------------------------------------------
COMMODITIES The Fund may not purchase or sell The Fund will not buy or sell physical
commodities or commodity contracts, commodities unless acquired as a result
except to the extent permissible under of ownership of securities or other
applicable law and interpretations, as instruments, except this shall not
they may be amended from time to time. prevent the Fund from buying or selling
options, futures contracts and foreign
currency or from investing in securities
or other instruments backed by, or whose
value is derived from, physical
commodities.
---------------------------------------------------------------------------------------------------
MARGIN The Fund may not purchase securities No fundamental policy.
on margin except as permitted by the
1940 Act or any rule thereunder, any
SEC or SEC staff interpretations
thereof or any exemptions therefrom
which may be granted by the SEC.
---------------------------------------------------------------------------------------------------
</Table>
57
---------------------------------------------------------------------------------------------------
SELIGMAN GLOBAL SMALLER COMPANIES FUND RIVERSOURCE PARTNERS INTERNATIONAL SMALL
POLICY (SELLING FUND) CAP FUND (BUYING FUND)
---------------------------------------------------------------------------------------------------
ISSUING SENIOR The Fund may not issue senior The Fund will not issue senior
SECURITIES securities, except as permitted by the securities, except as permitted under the
1940 Act or any rule thereunder, any 1940 Act, the rules and regulations
SEC or SEC staff interpretations thereunder and any applicable exemptive
thereof or any exemptions therefrom relief.
which may be granted by the SEC.
---------------------------------------------------------------------------------------------------
BORROWING MONEY The Fund may not borrow money, except The Fund will not borrow money, except
as permitted by the 1940 Act or any for temporary purposes (not for
rule thereunder, any SEC or SEC staff leveraging or investment) in an amount
interpretations thereof or any not exceeding 33 1/3% of its total assets
exemptions therefrom which may be (including the amount borrowed) less
granted by the SEC. liabilities (other than borrowings)
immediately after the borrowings.
---------------------------------------------------------------------------------------------------
LENDING The Fund may not make loans, except as The Fund will not lend securities or
permitted by the 1940 Act or any rule participate in an interfund lending
thereunder, any SEC or SEC staff program if the total of all such loans
interpretations thereof or any would exceed 33 1/3% of the Fund's total
exemptions therefrom which may be assets except this fundamental investment
granted by the SEC. policy shall not prohibit the Fund from
purchasing money market securities,
loans, loan participation or other debt
securities, or from entering into
repurchase agreements.
---------------------------------------------------------------------------------------------------
UNDERWRITING The Fund may not underwrite the The Fund will not act as an underwriter
securities of other issuers, except (sell securities for others). However,
insofar as a Fund may be deemed an under the securities laws, the Fund may
underwriter under the 1933 Act, as be deemed to be an underwriter when it
amended, in disposing of a portfolio purchases securities directly from the
security or in connection with issuer and later resells them.
investments in other investment
companies.
---------------------------------------------------------------------------------------------------
REAL ESTATE The Fund may not purchase or hold any The Fund will not buy or sell real
real estate, except the Fund may estate, unless acquired as a result of
invest in securities secured by real ownership of securities or other
estate or interests therein or issued instruments, except this shall not
by persons (including real estate prevent the Fund from investing in
investment trusts ("REITs")) which securities or other instruments backed by
deal in real estate or interests real estate or securities of companies
therein. engaged in the real estate business or
REITs. For purposes of this policy, real
estate includes real estate limited
partnerships.
---------------------------------------------------------------------------------------------------
DIVERSIFICATION The Fund may not make an investment The Fund will not purchase more than 10%
inconsistent with the Fund's of the outstanding voting securities of
classification as a diversified an issuer, except that up to 25% of the
company under the 1940 Act. Fund's assets may be invested without
regard to this 10% limitation.
The Fund will not invest more than 5% of
its total assets in securities of any
company, government, or political
subdivision thereof, except the
limitation will not apply to investments
in securities issued or guaranteed by the
U.S. government, its agencies, or
instrumentalities, or other investment
companies, and except that up to 25% of
the fund's total assets may be invested
without regard to this 5% limitation.
---------------------------------------------------------------------------------------------------
INDUSTRY The Fund may not invest 25% or more of The Fund will not concentrate in any one
CONCENTRATION its total assets, at market value, in industry. According to the present
the securities of issuers in any interpretation by the SEC, this means
particular industry, provided that that up to 25% of the Fund's total
this limitation shall exclude assets, based on current market value at
securities issued or guaranteed by the time of purchase, can be invested in any
US Government or any of its agencies one industry.
or instrumentalities.
---------------------------------------------------------------------------------------------------
DEALINGS WITH The Fund may not purchase or retain No fundamental policy.
DIRECTORS AND the securities of any issuer (other
OFFICERS than the shares of a Fund), if to the
Fund's knowledge, those directors and
officers of the Series and the
directors and officers of the
investment manager or subadviser, who
individually own beneficially more
than 1/2 of 1% of the outstanding
securities of such, together own
beneficially more than 5% of such
outstanding securities.
---------------------------------------------------------------------------------------------------
COMPARISON OF NONFUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
nonfundamental investment policies (policies that may be changed without
shareholder vote) of the Buying Fund. RiverSource Investments does not believe
that the differences
58
between the nonfundamental policies of the Funds result in any material
differences in the way the Funds have been managed or in the way the combined
Fund will be managed. The following highlights the differences in the Funds'
nonfundamental investment policies.
---------------------------------------------------------------------------------------------------
SELIGMAN GLOBAL SMALLER COMPANIES FUND RIVERSOURCE PARTNERS INTERNATIONAL SMALL
POLICY (SELLING FUND) CAP FUND (BUYING FUND)
---------------------------------------------------------------------------------------------------
FUND BORROWING The Fund may not borrow more than 15% Not applicable, see the fundamental
RESTRICTIONS of the value of its assets. investment policy above.
---------------------------------------------------------------------------------------------------
SECURITIES OF The Fund may not acquire any Not applicable.
OPEN-END securities of a registered open-end
INVESTMENT investment company or a registered
COMPANIES unit investment trust in reliance on
subparagraph (F) or subparagraph (G)
of Section 12(d)(1) of the 1940 Act.
---------------------------------------------------------------------------------------------------
INVESTMENTS TO The Fund may not invest for the Not applicable, other than as otherwise
CONTROL OR purpose of controlling or managing any permitted by the 1940 Act.
MANAGE company.
---------------------------------------------------------------------------------------------------
EXCHANGE TRADED The Fund may invest up to 10% of its Investing in exchange-traded funds (ETFs)
FUNDS assets in ETFs. is an allowable investment strategy for
the Fund, however, the Fund does not have
a stated policy limiting these types of
investments, other than as otherwise
permitted by the 1940 Act.
---------------------------------------------------------------------------------------------------
WARRANTS No more than 2% of net assets of the Investing in warrants is an allowable
Fund may be invested in warrants not investment strategy for the Fund.
listed on the New York or American
Stock Exchanges.
---------------------------------------------------------------------------------------------------
SHORT SALES The Fund may sell securities short The Fund is not prohibited from engaging
"against-the-box." A short sale in short sales as an investment strategy,
"against-the-box" is a short sale in however, the Fund will seek Board
which the Fund owns an equal amount of approval prior to utilizing short sales
the securities sold short (or as an active part of its investment
securities convertible into or strategy.
exchangeable for the securities sold
short) without payment of further
consideration for securities of the
same issuer as, and equal in amount
to, the securities sold short.
---------------------------------------------------------------------------------------------------
PREFERRED STOCK The Fund may invest up to 20% of its The Fund may invest in preferred stock
AND DEBT net assets in preferred stock and debt and debt securities to the extent
SECURITIES securities. The Fund will invest only permitted by its investment strategy.
in "investment grade" debt securities
or, in the case of unrated securities,
debt securities that are deemed to be
of equivalent quality to "investment-
grade" securities. "Investment-grade"
debt securities are rated within the
four highest rating categories as
determined by Moody's or S&P.
---------------------------------------------------------------------------------------------------
ACCESS TRADES The Fund may participate in access See derivatives above.
trades, but its exposure is limited to
5% of total assets of the Fund at the
time of purchase and dealing with
counterparties believed to be
reputable.
---------------------------------------------------------------------------------------------------
COMPARISON OF PRINCIPAL RISK FACTORS
Although the Funds describe them differently, the principal investment risks
associated with the Buying Fund and the Selling Fund are similar because both
Funds have similar investment objectives, principal investment strategies and
investment policies. With regard to investment strategies, the Buying Fund may
expose shareholders to greater foreign risk due to the Buying Fund's greater
ability to invest predominantly in equity securities of non-U.S. companies. Also
the Selling Fund currently has greater exposure to emerging market and illiquid
securities and therefore may expose shareholders to greater emerging market and
liquidity risks. The actual risks of investing in each Fund depend on the
securities held in each Fund's portfolio and on market conditions, both of which
change over time. Both Funds are subject to the principal investment risks
described below:
- ACTIVE MANAGEMENT RISK. The Fund is actively managed and its performance
therefore will reflect in part the ability of the portfolio managers to select
securities and to make investment decisions that are suited to achieving the
Fund's investment objective. Due to its active management, the Fund could
underperform other mutual funds with similar investment objectives.
59
- DERIVATIVES RISK. Derivatives are financial instruments that have a value
which depends upon, or is derived from, the value of something else, such as
one or more underlying securities, pools of securities, options, futures,
indexes or currencies. Losses involving derivative instruments may be
substantial, because a relatively small price movement in the underlying
security(ies), instrument, currency or index may result in a substantial loss
for the Fund. In addition to the potential for increased losses, the use of
derivative instruments may lead to increased volatility within the Fund.
Derivative instruments in which the Fund invests will typically increase the
Fund's exposure to Principal Risks to which it is otherwise exposed, and may
expose the Fund to additional risks, including correlation risk, counterparty
credit risk, hedging risk, leverage risk and liquidity risk.
Correlation risk is related to hedging risk and is the risk that there may be
an incomplete correlation between the hedge and the opposite position, which
may result in increased or unanticipated losses.
Counterparty credit risk is the risk that a counterparty to the derivative
instrument becomes bankrupt or otherwise fails to perform its obligations due
to financial difficulties, and the Fund may obtain no recovery of its
investment or may only obtain a limited recovery, and any recovery may be
delayed.
Hedging risk is the risk that derivative instruments used to hedge against an
opposite position may offset losses, but they may also offset gains. There is
no guarantee that a hedging strategy will eliminate the risk which the hedging
strategy is intended to offset, which may lead to losses within the Fund.
Leverage risk is the risk that losses from the derivative instrument may be
greater than the amount invested in the derivative instrument.
Liquidity risk, as described as a Principal Risk below, may be increased for
derivative instruments which are not traded on an exchange, including, but not
limited to, forward contracts, swaps and over-the-counter options.
Certain derivatives have the potential for unlimited losses, regardless of the
size of the initial investment.
- RISKS OF FOREIGN INVESTING. Foreign securities are securities of issuers based
outside the United States. An issuer is deemed to be based outside the United
States if it is organized under the laws of another country. Foreign
securities are primarily denominated in foreign currencies. In addition to the
risks normally associated with domestic securities of the same type, foreign
securities are subject to the following foreign risks:
Country risk includes the political, economic, and other conditions of the
country. These conditions include lack of publicly available information, less
government oversight (including lack of accounting, auditing, and financial
reporting standards), the possibility of government-imposed restrictions, and
even the nationalization of assets. The liquidity of foreign investments may be
more limited than for most U.S. investments, which means that, at times it may
be difficult to sell foreign securities at desirable prices.
Currency risk results from the constantly changing exchange rate between local
currency and the U.S. dollar. Whenever the Fund holds securities valued in a
foreign currency or holds the currency, changes in the exchange rate add to or
subtract from the value of the investment.
Custody risk refers to the process of clearing and settling trades. It also
covers holding securities with local agents and depositories. Low trading
volumes and volatile prices in less developed markets make trades harder to
complete and settle. Local agents are held only to the standard of care of the
local market. Governments or trade groups may compel local agents to hold
securities in designated depositories that are not subject to independent
evaluation. The less developed a country's securities market is, the greater
the likelihood of problems occurring.
Emerging markets risk includes the dramatic pace of change (economic, social
and political) in these countries as well as the other considerations listed
above. These markets are in early stages of development and are extremely
volatile. They can be marked by extreme inflation, devaluation of currencies,
dependence on trade partners, and hostile relations with neighboring countries.
- ISSUER RISK. An issuer may perform poorly, and therefore, the value of its
stocks and bonds may decline. Poor performance may be caused by poor
management decisions, competitive pressures, breakthroughs in technology,
reliance on suppliers, labor problems or shortages, corporate restructurings,
fraudulent disclosures or other factors.
- LIQUIDITY RISK. Liquidity risk is the risk associated from a lack of
marketability of securities which may make it difficult or impossible to sell
at desirable prices in order to minimize loss. The Fund may have to lower the
selling price, sell other investments, or forego another, more appealing
investment opportunity.
- MARKET RISK. The market value of securities may fall or fail to rise. Market
risk may affect a single issuer, sector of the economy, industry, or the
market as a whole. The market value of securities may fluctuate, sometimes
rapidly and unpredictably. This risk is generally greater for small and mid-
sized companies, which tend to be more vulnerable to adverse
60
developments. In addition, focus on a particular style, for example,
investment in growth or value securities, may cause the Fund to underperform
other mutual funds if that style falls out of favor with the market.
- SMALL COMPANY RISK. Investments in small capitalization companies often
involve greater risks than investments in larger, more established companies
because small capitalization companies may lack the management experience,
financial resources, product diversification, experience and competitive
strengths of larger companies. In addition, in many instances the securities
of small capitalization companies are traded only over-the-counter or on
regional securities exchanges and the frequency and volume of their trading is
substantially less and may be more volatile than is typical of larger
companies.
- SECTOR RISK. Companies that operate in different but closely related
industries are sometimes described as being in the same broad economic sector.
The values of stocks of many different companies in a market sector may be
similarly affected by particular economic or market events. Although the
Fund's principal investment strategies do not involve focusing on any
particular sector, at times Columbia WAM's asset management strategy may cause
the Fund to invest a large portion of its assets in a particular sector.
PERFORMANCE
The following bar charts and tables provide some illustration of the risks of
investing in the Funds by showing, respectively:
- how each Fund's performance has varied for each full calendar year shown in
the bar chart; and
- how each Fund's average annual total returns compare to recognized measures of
market performance shown in the table.
Both the bar chart and the table assume that all distributions have been
reinvested. The performance of different classes varies because of differences
in sales charges and other fees and expenses. How a Fund has performed in the
past (before and after taxes) does not indicate how the Fund will perform in the
future. Performance reflects any fee waivers/expense caps in effect for the
periods reported. In the absence of such fee waivers/expense caps, performance
would have been lower.
Bar Charts. Class A share information is shown in the bar charts; the sales
charge for Class A shares is not reflected in the bar charts.
Tables. The first table shows total returns from hypothetical investments in
Class A, Class B, Class C, Class R2* and Class R5* shares of Seligman Global
Smaller Companies Fund. The second table shows total returns from hypothetical
investments in Class A, Class B and Class C shares of RiverSource Partners
International Small Cap Fund. Inception date for Class R2 and Class R5 is
expected to be in the first quarter of 2010 and therefore performance
information for these classes is not shown. These returns are compared to the
indexes shown for the same periods. For purposes of the performance calculation
in the table we assumed:
* Prior to June 13, 2009, Class R2 shares were known as Class R shares and
Class R5 shares were known as Class I shares.
- the maximum sales charge of 5.75% for Class A shares;
- sales at the end of the period and deduction of the applicable contingent
deferred sales charge ("CDSC") for Class B and Class C;
- no sales charge for Class R2 and Class R5 shares; and
- with the exception of Class A shares, no adjustments for taxes paid by an
investor on the reinvested income and capital gains.
61
AFTER-TAX RETURNS
After-tax returns are shown only for Class A shares. After-tax returns for the
other classes will vary. After-tax returns are calculated using the highest
historical individual federal marginal income tax rate and do not reflect the
impact of state and local taxes. Actual after-tax returns will depend on your
tax situation and most likely will differ from the returns shown in the table.
If you hold your shares in a tax-deferred account, such as a 401(k) plan or an
IRA, the after-tax returns do not apply to you since you will not incur taxes
until you begin to withdraw from your account.
The return after taxes on distributions for a period may be the same as the
return before taxes for the same period if there were no distributions or if the
distributions were small. The return after taxes on distributions and sale of
Fund shares for a period may be greater than the return before taxes for the
same period if there was a tax loss realized on sale of Fund shares. The benefit
of the tax loss (since it can be used to offset other gains) may result in a
higher return.
SELIGMAN GLOBAL SMALLER COMPANIES FUND (SELLING
FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+24.12% -16.29% -17.63% -25.23% +39.64% +21.69% +16.44% +17.39% +3.29% -47.60%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +18.72% (quarter ended Dec. 31, 1999) and the lowest return for a
calendar quarter was -26.64% (quarter ended Dec. 31, 2008).
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart; if reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +39.83%.
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
(BUYING FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+32.07% +16.26% +15.28% +23.02% +8.69% -50.06%
2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +23.79% (quarter ended June 30, 2003) and the lowest return for a
calendar quarter was -26.96% (quarter ended Sept. 30, 2008).
The 5.75% sales charge applicable to Class A shares of the Fund is not reflected
in the bar chart; if reflected, returns would be lower than those shown. The
performance of other classes may vary from that shown because of differences in
expenses.
The Fund's Class A year-to-date return at Sept. 30, 2009 was +31.89%.
62
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2008)
<Table>
<Caption>
SINCE SINCE SINCE
INCEPTION INCEPTION INCEPTION
(CLASS C) (CLASS R2) (CLASS R5)
1 YEAR 5 YEARS 10 YEARS (5/27/99) (4/30/03) (11/30/01)
SELIGMAN GLOBAL SMALLER COMPANIES FUND
Class A
Return before taxes -50.62% -3.24% -2.73% N/A N/A N/A
Return after taxes on distributions -50.75% -4.45% -3.51% N/A N/A N/A
Return after taxes on distributions and
sale of Fund shares -32.84% -2.52% -2.18% N/A N/A N/A
Class B
Return before taxes -50.63% -3.12% -2.91% N/A N/A N/A
Class C
Return before taxes -48.47% -2.80% N/A -2.42% N/A N/A
Class R2
Return before taxes -47.80% -2.32% N/A N/A +3.96% N/A
Class R5
Return before taxes -47.29% -1.50% N/A N/A N/A +0.13%
S&P/Citigroup Broad Market Less Than US $2
Billion Index (reflects no deduction for
fees, expenses or taxes) -43.02% +0.51% +4.83% +4.46% +7.26% +5.24%
Lipper Global Small/Mid-Cap Funds Index -44.68% N/A N/A N/A N/A N/A
Lipper Global Small/Mid-Cap Funds Average -45.05% -0.57% +3.77% +3.12% +5.90% +2.48%
</Table>
The Standard & Poor's/Citigroup Broad Market Less Than US $2 Billion Index (the
"S&P/Citigroup Index"), an unmanaged benchmark, represents the entire universe
of institutionally investable securities with total available market
capitalization of at least the local equivalent of US $100 million and not more
than US $2 billion.
The Lipper Global Small/Mid-Cap Funds Index (the Lipper Index) includes the 10
largest global small and mid-cap funds tracked by Lipper Inc. The index's
returns include net reinvested dividends.
The Lipper Global Small/Mid-Cap Funds Average (the Lipper Average) excludes the
effect of sales-related fees (but includes operating expenses), sales charges
and taxes. The Lipper Average measures the performance of mutual funds that, by
portfolio practice, invest at least 75% of their equity assets in companies both
inside and outside of the US with market capitalizations (on a three-year
weighted basis) below Lipper's global large-cap floor.
Prior to Jan. 1, 2003, Seligman (the predecessor investment manager) employed
subadvisers that were responsible for providing certain portfolio management
services with respect to the investments of the Fund. From Jan. 1, 2003 until
Sept. 15, 2003, the assets of the Fund were managed exclusively by Seligman.
Since September 15, 2003, Wellington Management Company, LLP has been employed
as subadviser to provide portfolio management services for the Fund. From June
2004 to April 2006, Wellington Management Company, LLP delegated a portion of
its portfolio management responsibilities in respect of the Fund to its
affiliate, Wellington Management International, Ltd.
Investors cannot invest directly in an average or an index.
For Seligman Global Smaller Companies Fund, on Nov. 1, 2009, the Lipper Index
replaced the Lipper Average as the Fund's secondary benchmark. The Lipper
Average includes all funds categorized by Lipper within the broad universe of
funds in the Lipper Average, whereas the Lipper Index includes only a select
peer group from the Lipper Average, as described above. This change was made to
bring the selection of the Seligman Fund secondary benchmarks in line with the
practice of the RiverSource Family of Funds, which would permit a common
shareholder experience and provide a more focused peer group for performance
comparison purposes. Information on both the Lipper Index and the Lipper Average
will be included for a one-year transition period. Thereafter, only the Lipper
Index will be included.
63
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2008) (CONTINUED)
<Table>
<Caption>
SINCE
INCEPTION
(CLASSES A,
B & C)
1 YEAR 5 YEARS (10/3/02)
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND:
Class A
Return before taxes -52.94% -3.23% +5.14%
Return after taxes on distributions -52.94% -5.41% +2.89%
Return after taxes on distributions and sale of fund shares -34.41% -2.70% +4.29%
Class B
Return before taxes -52.94% -3.09% +5.31%
Class C
Return before taxes -50.89% -2.82% +5.34%
S&P Global ex-U.S. SmallCap Index (reflects no deduction for
fees, expenses or taxes) -49.85% +3.06% +10.99%
S&P Global ex-U.S. Under USD2 Billion Index (reflects no
deduction for fees, expenses or taxes) -49.15% +3.19% +11.50%
Lipper International Small-Cap Funds Index -48.90% +2.88% +10.55%
</Table>
The S&P Global ex-U.S. SmallCap Index, an unmanaged benchmark, measures the
small stock component of the S&P Global ex-U.S. Broad Market. The benchmark
consists of the bottom 15% of float-adjusted market capitalization stocks within
developed and emerging markets globally (excluding the U.S.). The index reflects
reinvestment of all distributions and changes in market prices.
The S&P Global ex-U.S. Under USD2 Billion Index, an unmanaged market
capitalization weighted benchmark, measures the small stock component of the
Salomon Smith Barney Global Equity Index, which includes developed and emerging
market countries globally excluding the U.S. Within each country, those stocks
falling under a two billion dollar market cap of the available market capital in
each country form the universe. The index reflects reinvestment of all
distributions and changes in market prices.
The Lipper International Small-Cap Funds Index includes the 30 largest
international small-cap funds tracked by Lipper Inc. The index's returns include
net reinvested dividends. The Fund's performance is currently measured against
this index for purposes of determining the performance incentive adjustment.
On Aug. 10, 2009, the S&P Global ex-U.S. SmallCap Index replaced S&P Global ex-
U.S. Under USD2 Billion Index as the Fund's primary benchmark. The investment
manager made this recommendation to the Fund's Board because the new index more
closely aligns to the Fund's investment strategy. Information on both indexes
will be included for a one-year transition period. In the future, however, only
the S&P Global ex-U.S. SmallCap Index will be included.
Investors cannot invest directly in an index.
64
PROPOSAL 6. REORGANIZATION OF RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND INTO
RIVERSOURCE GOVERNMENT MONEY MARKET FUND
COMPARISON OF THE SELLING FUND AND THE BUYING FUND
Both the Selling Fund and the Buying Fund:
- Have RiverSource Investments as an investment manager.
- Have the same policies for buying and selling shares and the same exchange
rights.
- Have the same distribution policies.
- Offer shares of capital stock. The Buying Fund offers multiple classes of
shares, whereas the Selling Fund issues one class of shares. The Selling
Fund's shares are proposed to be merged into Class A shares of the Buying
Fund. The Buying Fund additionally offers Classes B, C, R2 and R5.
- Are structured as an open-end management investment company. The Buying Fund
is a Maryland corporation, whereas the Selling Fund is a series of a Minnesota
corporation. Please see Exhibit D to this proxy statement/prospectus for more
information regarding the differences between the rights of shareholders of
the Buying Fund and shareholders of the Selling Fund.
COMPARISON OF INVESTMENT OBJECTIVES
Both Funds are money market funds that seek to provide current income and
liquidity while seeking to maintain a stable net asset value of $1.00 per share.
The Selling Fund, however, differs from the Buying Fund in that the Selling Fund
seeks to provide current income exempt from federal income tax. Because any
investment involves risk, there is no assurance these objectives can be
achieved. Only shareholders can change the Fund's objective.
The investment objectives for the Funds are as follows:
SELLING FUND: RiverSource Tax-Exempt Money Market Fund seeks to
provide shareholders with as high a level of current
income exempt from federal income tax as is consistent
with liquidity and stability of principal.
BUYING FUND: RiverSource Government Money Market Fund seeks to
preserve capital and to maximize liquidity and current
income.
COMPARISON OF PRINCIPAL INVESTMENT STRATEGIES
Each Fund invests primarily in U.S. dollar-denominated money market instruments
meeting certain maturity and quality standards. While the Selling Fund invests
primarily in instruments exempt from U.S. federal income tax and the alternative
minimum tax ("AMT"), the Buying Fund invests primarily in money market
securities that are issued or guaranteed by the U.S. government, its agencies or
instrumentalities. Both the Selling and the Buying Fund limit their investments
to securities that present minimal credit risk. The Buying Fund currently limits
its investments to U.S. government securities and securities that are rated in
the top category by Moody's and S&P 500. The Selling Fund may invest up to 25%
of its net assets in securities of issuers located in the same state or region
or in industrial revenue bonds, while the Buying Fund has no similar
restrictions (given its investment focus on U.S. government securities).
65
Detailed strategies for the Selling Fund and the Buying Fund are set forth
below:
<Table>
<Caption>
--------------------------------------------------------------------------------------------
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND RIVERSOURCE GOVERNMENT MONEY MARKET FUND
(SELLING FUND) (BUYING FUND)
--------------------------------------------------------------------------------------------
The Fund's assets primarily are invested in The Fund will normally invest at least 80% of
debt obligations. Under normal market its net assets in high-quality, short-term
conditions, at least 80% of the Fund's net money market securities that are issued or
assets are invested in short-term debt guaranteed by the U.S. government, its agencies
obligations whose interest is exempt from or instrumentalities. The Fund will provide
federal income taxes. This 80% threshold is shareholders with at least 60 days' notice of
a fundamental policy of the Fund. These any change in the 80% policy.
securities must be rated in one of the two
highest categories by national rating The Fund will invest only in U.S. dollar-
services. The Fund may invest up to 25% of denominated securities having a remaining
its net assets in securities of issuers maturity of 13 months (397 days) or less and
located in the same state or region or in will maintain a U.S. dollar-weighted average
industrial revenue bonds. portfolio maturity of 90 days or less.
Because the Fund seeks to maintain a In seeking to maintain a constant net asset
constant net asset value of $1.00 per value of $1.00, the Fund will limit its
share, capital appreciation is not expected investments to securities that, in accordance
to play a role in the Fund's return. An with guidelines approved by the Fund's Board of
investment in the Fund is not insured or Directors, present minimal credit risk.
guaranteed by the Federal Deposit Insurance Accordingly, the Fund will only purchase U.S.
Corporation or any other government agency. government securities, or securities rated in
one of the two highest rating categories
Some notes issued in the tax-free assigned to short-term debt securities by at
securities market are subject to the least two nationally recognized statistical
alternative minimum tax ("AMT"). To avoid rating organizations (such as Moody's Investors
any federal income tax liability for Service ("Moody's") or Standard & Poor's
investors who may be subject to the AMT, Ratings Services ("S&P")), or if not so rated,
the Fund does not intend to invest in such determined to be of comparable quality.
issues.
Determination of quality is made at the time of
In pursuit of the Fund's objective, the investment, in accordance with procedures
Fund's investment manager chooses debt approved by the Fund's Board of Directors. The
obligations by: investment manager continuously monitors the
- Considering opportunities and risks in quality of the Fund's investments. If the
short-term municipal obligations given quality of an investment declines, the Fund
current interest rates and anticipated may, in certain limited circumstances, continue
interest rates. to hold it.
- Identifying investments that:
- have interest not subject to the AMT; Currently, the Fund invests only in U.S.
and government securities and in securities that
- have short-term effective maturities. are rated in the top category by Moody's and
- Identifying obligations that contribute S&P. However, the Fund is permitted to invest
to portfolio diversification of the Fund. up to 5% of its assets in securities rated in
the second rating category by two rating
The Fund restricts its investments to organizations. The Fund may not invest more
instruments that meet certain effective than the greater of 1% of its total assets or
maturity and quality standards required for $1,000,000 in any one security in the second
tax-exempt money market funds. For example, rating category.
the Fund:
- Limits its average portfolio effective In pursuit of the Fund's objective, the
maturity to 90 days or less. investment manager chooses investments by:
- Buys obligations with remaining effective
maturities of 397 days or less. - Considering opportunities and risks given
- Buys only obligations that are current interest rates and anticipated
denominated in U.S. dollars and present interest rates.
minimal credit risk.
- Purchasing securities based on the timing of
If suitable tax-exempt securities are not cash flows in and out of the Fund.
available, the Fund may invest up to 20% of
its net assets in taxable investments,
including government securities, bank
obligations, commercial paper, and
repurchase agreements. The Fund also may
invest, from time to time, in securities
that are illiquid.
--------------------------------------------------------------------------------------------
</Table>
In addition to the principal investment strategies set forth above, both Funds
also have the following principal investment strategies:
In evaluating whether to sell a security, the investment manager considers,
among other factors, whether:
- The issuer's credit rating declines or the investment manager expects a
decline (the Fund, in certain cases, may continue to own securities that are
down-graded until the investment manager believes it is advantageous to sell).
- Political, economic, or other events could affect the issuer's performance.
- The investment manager identifies a more attractive opportunity.
- The issuer or the security continues to meet the other standards described
above.
66
COMPARISON OF FUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
fundamental investment policies of the Buying Fund. The Selling Fund and the
Buying Fund have similar fundamental policies with the exception of the 80%
policy of the Selling Fund in comparison to the industry concentration policy of
the Buying Fund. The Selling Fund will not, under normal market conditions,
invest less than 80% of its net assets in bonds and other debt securities issued
by or on behalf of state or local governmental units whose interest is exempt
from federal income tax. The Buying Fund reserves the right to concentrate
investments in money market instruments issued by the U.S. government or its
agencies or instrumentalities or banks or bank holding companies. This 80%
policy of the Buying Fund is non-fundamental. For purposes of this discussion, a
"fundamental" investment policy is one that may not be changed without a
shareholder vote. The Funds' fundamental investment policies are set forth
below:
---------------------------------------------------------------------------------------------------
RIVERSOURCE TAX-EXEMPT MONEY MARKET
FUND RIVERSOURCE GOVERNMENT MONEY MARKET FUND
POLICY (SELLING FUND) (BUYING FUND)
---------------------------------------------------------------------------------------------------
UNDERWRITING The Fund will not act as an The Fund may not underwrite the
underwriter (sell securities for securities of other issuers.
others). However, under the securities
laws, the Fund may be deemed to be an
underwriter when it purchases
securities directly from the issuer
and later resells them.
---------------------------------------------------------------------------------------------------
LENDING The Fund will not lend securities or The Fund may not make loans, except loans
participate in an interfund lending of portfolio securities and except to the
program if the total of all such loans extent that the purchase of notes, bonds
would exceed 33 1/3% of the Fund's or other evidences of indebtedness, the
total assets except this fundamental entry into repurchase agreements or
investment policy shall not prohibit deposits with banks, may be considered
the Fund from purchasing money market loans.
securities, loans, loan participation
or other debt securities, or from The Fund will not lend securities or
entering into repurchase agreements. participate in an interfund lending
program if the total of all such loans
would exceed 33 1/3% of the Fund's total
assets except this fundamental investment
policy shall not prohibit the Fund from
purchasing money market securities,
loans, loan participation or other debt
securities, or from entering into
repurchase agreements.
---------------------------------------------------------------------------------------------------
BORROWING MONEY The Fund will not borrow money, except The Fund may not borrow money, except
for temporary purposes (not for from banks for temporary purposes in an
leveraging or investment) in an amount amount not to exceed 5% of the value of
not exceeding 33 1/3% of its total the total assets of the Fund.
assets (including the amount borrowed)
less liabilities (other than
borrowings) immediately after the
borrowings.
---------------------------------------------------------------------------------------------------
ISSUING SENIOR The Fund will not issue senior The Fund may not issue senior securities.
SECURITIES securities, except as permitted under
the 1940 Act, the rules and
regulations thereunder and any
applicable exemptive relief.
---------------------------------------------------------------------------------------------------
MARGIN The Fund will not buy on margin. The Fund may not purchase securities on
margin.
---------------------------------------------------------------------------------------------------
SHORT SALES The Fund will not sell securities The Fund may not make "short" sales of
short. securities.
---------------------------------------------------------------------------------------------------
REAL ESTATE The Fund will not invest in real The Fund may not buy or hold any real
estate, but the Fund can invest in estate or securities of corporations or
municipal bonds and notes secured by trusts whose principal business is
real estate or interest therein. For investing in interests in real estate.
purposes of this policy, real estate
includes real estate limited
partnerships.
---------------------------------------------------------------------------------------------------
COMMODITIES The Fund will not invest in The Fund may not buy or hold any
commodities or commodity contracts. commodity or commodity contracts.
---------------------------------------------------------------------------------------------------
</Table>
67
---------------------------------------------------------------------------------------------------
RIVERSOURCE TAX-EXEMPT MONEY MARKET
FUND RIVERSOURCE GOVERNMENT MONEY MARKET FUND
POLICY (SELLING FUND) (BUYING FUND)
---------------------------------------------------------------------------------------------------
DIVERSIFICATION The Fund will not invest more than 5% The Fund may not invest more than 5% of
of its total assets in securities of its gross assets (taken at market) in the
any company, government, or political securities of any one issuer, other than
subdivision thereof, except the the U.S. government, its agencies or
limitation will not apply to instrumentalities, or buy more than 10%
investments in securities issued or of the voting securities of any one
guaranteed by the U.S. government, its issuer, other than U.S. government
agencies, or instrumentalities, or agencies or instrumentalities.
other investment companies, and except
that up to 25% of the Fund's total
assets may be invested without regard
to this 5% limitation. For purposes of
this policy, the terms of a municipal
security determine the issuer.
The Fund will not purchase more than
10% of the outstanding voting
securities of an issuer, except that
up to 25% of the Fund's assets may be
invested without regard to this 10%
limitation. For purposes of this
policy, the terms of a municipal
security determine the issuer.
---------------------------------------------------------------------------------------------------
INDUSTRY No fundamental policy. The Fund may not invest more than 25% of
CONCENTRATION the market value of its total assets in
securities of issuers in any one
industry, provided that the Fund reserves
the right to concentrate investments in
money market instruments issued by the
U.S. government or its agencies or
instrumentalities or banks or bank
holding companies.
---------------------------------------------------------------------------------------------------
DEALINGS WITH No fundamental policy. The Fund may not deal with its directors
DIRECTORS AND and officers, or firms they are
OFFICERS associated with, in the purchase or sale
of securities except as broker, or
purchase or hold the securities of any
issuer, if to its knowledge, directors or
officers of the Fund or of the Manager
individually owning beneficially more
than 0.5% of the securities of that other
company own in the aggregate more than 5%
of such securities.
---------------------------------------------------------------------------------------------------
OIL, GAS, No fundamental policy. The Fund may not buy or hold oil or gas
MINERALS interests.
---------------------------------------------------------------------------------------------------
OPTIONS No fundamental policy. The Fund may not write or purchase put or
call options.
---------------------------------------------------------------------------------------------------
CONTINUITY OF No fundamental policy. The Fund may not buy securities of any
OPERATIONS OF company which, with their predecessors,
COMPANIES have been in operation less than three
continuous years, provided however, that
securities guaranteed by a company that
(including predecessors) has been in
operation at least three continuous years
shall be excluded.
---------------------------------------------------------------------------------------------------
RESALE No fundamental policy. The Fund may not invest in securities
RESTRICTIONS with contractual or other restrictions on
resale, except in connection with
repurchase agreements.
---------------------------------------------------------------------------------------------------
MORTGAGES AND No fundamental policy. The Fund may not mortgage or pledge any
PLEDGES of its assets, except to the extent, up
to a maximum of 5% of its total assets,
necessary to secure those borrowings
which are permitted. (See "Borrowing
Money," above.)
---------------------------------------------------------------------------------------------------
INVESTMENTS FOR No fundamental policy. The Fund may not invest in the securities
PURPOSES OF of companies for purposes of exercising
MANAGEMENT OR control or management of such companies
CONTROL or in securities issued by other
investment companies, except in
connection with a merger, consolidation,
acquisition or reorganization or for the
purpose of hedging the Fund's obligations
under its deferred compensation plan for
directors.
---------------------------------------------------------------------------------------------------
68
COMPARISON OF NONFUNDAMENTAL POLICIES
If the Reorganization occurs, the combined Fund will be subject to the
nonfundamental investment policies (policies that may be changed without a
shareholder vote) of the Buying Fund. In addition to the nonfundamental policies
outlined in the Comparison of Principal Investment Strategies, both Funds are
also subject to the following additional nonfundamental policy:
- No more than 10% of the Fund's net assets will be held in securities and other
instruments that are illiquid.
COMPARISON OF PRINCIPAL RISK FACTORS
Although the Funds describe them differently, the principal investment risks
associated with the Buying Fund and the Selling Fund generally are similar
because both Funds are money market funds, although the Selling Fund invests
primarily in municipal obligations, whereas the Buying Fund invests primarily in
securities of the U.S. government, its agencies and instrumentalities. The
actual risks of investing in each Fund depend on the securities held in each
Fund's portfolio and on market conditions, both of which change over time. Both
Funds are subject to the principal investment risks described below.
An investment in the Fund is not a deposit in a bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1.00 per share, it is possible to lose money by investing in
the Fund.
The Fund is actively managed and its performance therefore will reflect in
part the ability of the portfolio manager to select securities and to make
investment decisions that are suited to achieving the Fund's investment
objective. Due to its active management, the Fund could underperform other
mutual funds with similar investment objectives.
Yield and total return of the Fund will fluctuate with fluctuations in the
yields of the securities held by the Fund. In periods of declining interest
rates, the yields of the securities held by the Fund will tend to be
somewhat higher than prevailing market rates, and in periods of rising
interest rates, the yields of securities held by the Fund will tend to be
lower than market rates. Additionally, when interest rates are falling, the
inflow of new money to the Fund from sales of its shares will likely be
invested in securities producing lower yields than the balance of the
Fund's assets, reducing the current yield of the Fund. In periods of rising
interest rates, the opposite may be true.
In addition to the risks described above, the Buying Fund is subject to the
additional principal investment risks set forth below. While these
additional risks may also be risks of the Selling Fund, they are not stated
as principal investment risks of the Selling Fund. For more information
regarding the Selling Fund's principal investment risks, see "Principal
Risks" in the Selling Fund's prospectus.
Repurchase agreements in which the Fund may invest could involve certain
risks in the event of default by the seller, including possible delays and
expenses in liquidating the securities underlying the agreement, decline in
the value of the underlying securities and loss of interest.
Investments in foreign banks and foreign branches of U.S. banks involve
certain risks not generally associated with investments in U.S. banks.
While U.S. banks and U.S. branches of foreign banks are required to
maintain certain reserves and are subject to other regulations, these
requirements and regulations may not apply to foreign banks or foreign
branches of U.S. banks. Investments in foreign banks and foreign branches
may also be subject to other risks, including political or economic
developments, the seizure or nationalization of foreign deposits and the
establishments of exchange controls or other restrictions.
In addition to the risks described above, the Selling Fund is subject to
the additional principal investment risks set forth below. While these
additional risks may also be risks of the Buying Fund, they are not stated
as principal investment risks of the Buying Fund. For more information
regarding the Buying Fund's principal investment risks, see "Principal
Risks" in the Buying Fund's prospectus.
CREDIT RISK. Credit risk is the risk that the issuer of a security, or the
counterparty to a contract, will default or otherwise become unable or unwilling
to honor a financial obligation, such as payments due on a bond or a note. If
the Fund purchases unrated securities, or if the rating of a security is reduced
after purchase, the Fund will depend on the investment manager's analysis of
credit risk more heavily than usual.
MUNICIPAL SECURITIES RISK. The value of a municipal security may be affected by
legislative or administrative actions as well as by the economies of the region
where the issuer of the municipal security is located. For example, a
significant restructuring of federal income tax rates could cause municipal
security prices to fall. Lower income tax rates could reduce the advantage of
owning municipal securities.
REINVESTMENT RISK. Reinvestment risk is the risk that the Fund will not be able
to reinvest income or principal at the same rate it currently is earning.
69
PERFORMANCE
The following bar charts and table provide some illustration of the risks of
investing in the Funds by showing the variability of performance.
Both the bar chart and the table assume that all distributions have been
reinvested. How a Fund has performed in the past does not indicate how the Fund
will perform in the future. Performance reflects any fee waivers/expense caps in
effect for the periods reported. In the absence of such fee waivers/expense
caps, performance would have been lower.
Bar Charts. The bar chart shows how a Fund's performance has varied for each
full calendar year. For purposes of comparison, the single class of shares of
RiverSource Tax-Exempt Money Market Fund is referred to as Class A shares.
Table. The first line of the table shows total returns from a hypothetical
investment in shares of RiverSource Tax-Exempt Money Market Fund. For purposes
of comparison, the single class of shares of RiverSource Tax-Exempt Money Market
Fund is referred to as Class A shares. The second line of the table shows total
returns from a hypothetical investment in Class A shares of RiverSource
Government Money Market Fund. For purposes of the performance calculation in the
table we assumed no adjustments for taxes paid by an investor on the reinvested
income and capital gains.
YIELD INFORMATION
For current 7-day yield information, call 1(800) 221-2450.
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND (SELLING
FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+2.68% +3.50% +2.21% +0.89% +0.37% +0.50% +1.71% +2.79% +3.09% +1.38%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +0.92% (quarter ended Dec. 31, 2000) and the lowest return for a
calendar quarter was +0.04% (quarter ended Sept. 30, 2003).
The Fund's year-to-date return at Sept. 30, 2009 was +0.01%.
70
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (BUYING
FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+4.30% +5.65% +3.21% +0.74% +0.19% +0.43% +2.20% +3.95% +4.09% +1.12%
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
During the periods shown in the bar chart, the highest return for a calendar
quarter was +1.48% (quarter ended Sept. 30, 2000) and the lowest return for a
calendar quarter was +0.0007% (quarter ended Dec. 31, 2008).
The Fund's Class A year-to-date return at Sept. 30, 2009 was +0.03%.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2008)
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
RiverSource Tax-Exempt Money Market Fund -- Class A +1.38% +1.89% +1.90%
RiverSource Government Money Market Fund -- Class A +1.12% +2.35% +2.57%
</Table>
71
ADDITIONAL INFORMATION ABOUT EACH REORGANIZATION
TERMS OF THE REORGANIZATIONS
The Board has approved the Agreement, the form of which is attached as Exhibit
A. The Agreement provides for Reorganizations on the following terms:
- Each Reorganization is expected to occur before the end of the second quarter
of 2010, pending shareholder approval, receipt of any necessary regulatory
approvals and satisfaction of any other conditions to closing. However,
following shareholder approval, each Reorganization may happen at any time
agreed to by the applicable Selling Fund and the corresponding Buying Fund.
- Each Selling Fund will transfer all of its assets to the corresponding Buying
Fund and, in exchange, the corresponding Buying Fund will assume all the
Selling Fund's liabilities and will issue to the Selling Fund, as applicable,
Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and/or Class
R5 shares with an aggregate net asset value on the business day immediately
preceding the closing of the Reorganization equal to the value of the assets
that it receives from the Selling Fund, less the liabilities assumed by the
corresponding Buying Fund in the transaction. The Reorganization Shares will
immediately be distributed to Selling Fund shareholders in proportion to their
holdings of shares of the Selling Fund. As a result, shareholders of the
Selling Fund will become, as applicable, Class A, Class B, Class C, Class I,
Class R2, Class R3, Class R4 and/or Class R5 shareholders of the corresponding
Buying Fund.
- No Selling Fund and no shareholders of any Selling Fund will pay any sales
charge in connection with its Reorganization.
- The net asset value of each Selling Fund and the corresponding Buying Fund
will be computed as of 3:00 p.m., Central time, on the business day
immediately preceding the closing date of the applicable Reorganization.
- After its Reorganization, each Selling Fund will be dissolved.
CONDITIONS TO CLOSING EACH REORGANIZATION
The completion of each Reorganization is subject to certain conditions described
in the Agreement, including:
- The Selling Fund will have declared and paid a dividend that will distribute
all of the Selling Fund's net investment income and net capital gains, if any,
to the shareholders of the Selling Fund for taxable years ending on or prior
to the closing date of the Reorganization.
- The Funds will have received any approvals, consents or exemptions from the
SEC or any other regulatory body necessary to carry out the Reorganization.
- A registration statement on Form N-14 relating to the Reorganization will have
been filed with the SEC and declared effective.
- The shareholders of the Selling Fund will have approved the Agreement by the
requisite vote necessary.
- The Selling Fund will have received an opinion of tax counsel to the effect
that, although, with respect to the Reorganizations of RiverSource Partners
Aggressive Growth Fund, RiverSource Partners Select Value Fund, RiverSource
Partners Small Cap Equity Fund, RiverSource Partners Small Cap Growth Fund and
Seligman Global Smaller Companies Fund, the matter is not free from doubt, the
shareholders of the Selling Fund will not recognize gain or loss for federal
income tax purposes upon the exchange of their Selling Fund shares for the
corresponding Buying Fund shares in connection with the Reorganization.
TERMINATION OF THE AGREEMENT
The Agreement and the transactions contemplated by it may be terminated and
abandoned with respect to any Reorganization by resolution of the Board at any
time prior to closing date thereof. In the event of a termination, RiverSource
Investments will bear all costs associated with the Reorganization.
TAX STATUS OF THE REORGANIZATIONS
Each Reorganization is intended to qualify for federal income tax purposes as a
tax-free reorganization under section 368(a) of the Internal Revenue Code of
1986, as amended (the "Code"). As a condition to the closing of each
Reorganization, each Selling Fund and each Buying Fund will receive an opinion
from Ropes & Gray LLP to the effect that, although, with respect to the
Reorganizations of RiverSource Partners Aggressive Growth Fund into RiverSource
Mid Cap Growth Fund, RiverSource Partners Select Value Fund into RiverSource Mid
Cap Value Fund, RiverSource Partners Small Cap Equity Fund into Seligman
Smaller-Cap Value Fund, RiverSource Partners Small Cap Growth Fund into Seligman
Frontier Fund and Seligman Global Smaller Companies Fund into RiverSource
Partners International Small Cap Fund, the matter is not free from doubt, on
72
the basis of existing provisions of the Code, U.S. Treasury regulations issued
thereunder, current administrative rules, pronouncements and court decisions,
for federal income tax purposes:
- The transfer of the Selling Fund's assets to the Buying Fund in exchange for
Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5
shares, as applicable, of the Buying Fund and the assumption by the Buying
Fund of the Selling Fund's liabilities, followed by the distribution of those
Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5
shares, as applicable, to the Selling Fund's shareholders and the termination
of the Selling Fund, will be a "reorganization" within the meaning of Section
368(a)(1) of the Code, and the Selling Fund and the Buying Fund will each be a
"party to the reorganization" within the meaning of Section 368(b) of the
Code.
- Under Section 361 of the Code, no gain or loss will be recognized by the
Selling Fund upon the transfer of all of its assets to the Buying Fund or on
the distribution by the Selling Fund of Class A, Class B, Class C, Class I,
Class R2, Class R3, Class R4 and Class R5 shares, as applicable, of the Buying
Fund to Selling Fund shareholders in liquidation.
- Under Section 354 of the Code, the shareholders of the Selling Fund will not
recognize gain or loss upon the exchange of their Class A, Class B, Class C,
Class I, Class R2, Class R3, Class R4 and Class R5 shares, as applicable, of
the Selling Fund solely for Class A, Class B, Class C, Class I, Class R2,
Class R3, Class R4 and Class R5 shares, as applicable, of the Buying Fund as
part of the Reorganization.
- Under Section 358 of the Code, the aggregate tax basis of the Class A, Class
B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5 shares, as
applicable, of the Buying Fund that a Selling Fund shareholder receives in the
Reorganization will be the same as the aggregate tax basis of the Class A,
Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5 shares,
as applicable, of the Selling Fund exchanged therefor.
- Under Section 1223(1) of the Code, the holding period for the Class A, Class
B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5 shares, as
applicable, of the Buying Fund that a Selling Fund shareholder receives in the
Reorganization will include the period for which he or she held the Class A,
Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5 shares,
as applicable, of the Selling Fund exchanged therefor, provided that on the
date of the exchange he or she held such Selling Fund shares as capital
assets.
- Under Section 1032 of the Code, no gain or loss will be recognized by the
Buying Fund upon the receipt of the Selling Fund's assets solely in exchange
for the issuance of the Buying Fund's Class A, Class B, Class C, Class I,
Class R2, Class R3, Class R4 and Class R5 shares, as applicable, to the
Selling Fund and the assumption of all of the Selling Fund's liabilities by
the Buying Fund.
- Under Section 362(b) of the Code, the Buying Fund's tax basis in the assets
received from the Selling Fund will be the same as the Selling Fund's tax
basis in those assets immediately prior to the transfer.
- Under Section 1223(2) of the Code, the Buying Fund's holding periods in the
assets received from the Selling Fund will include the Selling Fund's holding
periods in such assets.
- The Buying Fund will succeed to and take into account the items of the Selling
Fund described in Section 381(c) of the Code, subject to the conditions and
limitations specified in Sections 381, 382, 383 and 384 of the Code and the
regulations thereunder.
Ropes & Gray LLP will express no view with respect to the effect of a
Reorganization on any transferred asset as to which any unrealized gain or loss
is required to be recognized under federal income tax principles (i) at the end
of a taxable year or upon the termination thereof, or (ii) upon the transfer of
such asset regardless of whether such a transfer would otherwise be a non-
taxable transaction.
Each opinion will be based on certain factual certifications made by the
officers of the Selling Fund and the Buying Fund and will also be based on
customary assumptions. With respect to the Reorganizations listed above, each
opinion will note and distinguish certain published precedent. It is possible
that the Internal Revenue Service (the "IRS") could disagree with Ropes & Gray
LLP's opinion.
Opinions of counsel are not binding upon the IRS or the courts. If a
Reorganization were consummated but did not qualify as a tax-free reorganization
under the Code, a shareholder of the Selling Fund would recognize a taxable gain
or loss equal to the difference between his or her tax basis in his or her
Selling Fund shares and the fair market value of the shares of the Buying Fund
he or she received. Shareholders of a Selling Fund should consult their tax
advisors regarding the effect, if any, of the Reorganization in light of their
individual circumstances.
In the case of RiverSource Partners Small Cap Equity Fund, RiverSource Partners
Small Cap Growth Fund, RiverSource Partners Select Value Fund and RiverSource
Partners Aggressive Growth Fund, portfolio manager substitutions independent of
the Reorganizations have occurred and have resulted in substantial portfolio
turnover. An additional portion of or all of the portfolio assets of each
Selling Fund may also be sold in connection with its Reorganization. The actual
tax impact of such sales depends on the difference between the price at which
such portfolio assets are sold and the Selling Fund's tax basis in
73
such assets. Any net capital gains recognized in these sales will be distributed
to shareholders as capital gain dividends (to the extent of net realized long-
term capital gains over net realized short-term capital losses) and/or ordinary
dividends (to the extent of net realized short-term capital gains over net
realized long-term capital losses) during or with respect to the year of sale,
and such distributions will be taxable to shareholders. Each Reorganization will
end the tax year of the applicable Selling Fund, and will therefore accelerate
any distributions to shareholders from the Selling Fund for its short tax year
ending on the date of the Reorganization. Prior to the closing of each
Reorganization, the Selling Fund will, and the Buying Fund may, declare a
distribution to shareholders, which, together with all previous distributions,
will have the effect of distributing to shareholders all of its investment
company taxable income (computed without regard to the deduction for dividends
paid), net tax-exempt income, if any, and net realized capital gains, if any,
through the closing of the Reorganization, including any undistributed income or
gains from the immediately preceding year. These distributions will be taxable
to shareholders except to the extent of any exempt-interest dividends, and such
distributions by a Selling Fund will include any capital gains resulting from
portfolio turnover prior to the Reorganization. If a shareholder holds shares of
either Fund in a non-taxable account, distributions with respect to those shares
will not be taxable to the shareholder if the amount distributed remains in the
non-taxable account.
A Fund's ability to carry forward capital losses and to use them to offset
future gains may be limited as a result of the Reorganization. First, a Fund's
"pre-acquisition losses" (including capital loss carryforwards, net current-year
capital losses, and unrealized losses that exceed certain thresholds) may become
unavailable to offset gains of the combined Fund. Second, one Fund's pre-
acquisition losses cannot be used to offset unrealized gains in another Fund
that are "built in" at the time of the Reorganization and that exceed certain
thresholds ("non-de minimis built-in gains") for five tax years. Third, a
Selling Fund's loss carryforwards, as limited under the previous two rules, are
permitted to offset only that portion of the gains of the Buying Fund for the
taxable year of the Reorganization that is equal to the portion of the Buying
Fund's taxable year that follows the date of the Reorganization (prorated
according to number of days). Therefore, in certain circumstances, certain
shareholders of a Fund may pay taxes sooner, or pay more taxes, than they would
have had a Reorganization not occurred.
In addition, the combined Fund resulting from each Reorganization will have tax
attributes that reflect a blending of the tax attributes of the Funds at the
time of the Reorganization (including as affected by the rules set forth above).
Therefore, the shareholders of the Selling Fund will in each case receive a
proportionate share of any "built-in" (unrealized) gains in the Buying Fund's
assets, as well as any taxable gains realized by the Buying Fund but not
distributed to its shareholders prior to the Reorganization, when such gains are
eventually distributed. As a result, shareholders of a Selling Fund may receive
a greater amount of taxable distributions than they would have had the
Reorganization not occurred. And any pre-acquisition losses of the Selling Fund
(whether realized or unrealized) remaining after the operation of the limitation
rules described above will become available to offset capital gains realized by
the combined Fund after the Reorganization and thus may reduce subsequent
capital gain distributions to a broader group of shareholders than would have
been the case absent such Reorganization, such that the benefit of those losses
to Selling Fund shareholders may be further reduced relative to what the benefit
would have been had the Reorganization not occurred.
The amount of realized and unrealized gains and losses of each Fund, as well as
the size of each Fund, at the time of its Reorganization will determine the
extent to which the combining Funds' respective losses, both realized and
unrealized, will be available to reduce gains realized by the combined Fund
following the Reorganization, and consequently the extent to which the combined
Fund may be required to distribute gains to its shareholders earlier than would
have been the case absent the Reorganization. Thus the impact of the rules
described above will depend on factors that are currently unknown, such that
this impact cannot be calculated precisely prior to the Reorganization. The
following paragraph provides a brief summary of the tax impacts, due to the
above-described rules and consequences relating to the combination of the tax
attributes of the two funds, of the Reorganizations had they occurred on
September 23, 2009. As noted above, the tax impact of a Reorganization depends
on each Fund's relative tax situation at the time of the Reorganization, which
will be different than the tax situation on September 23, 2009, such that the
tax impacts described herein may not pertain at the time of the Reorganization.
Further due to the significant portfolio turnover of certain of the Selling
Funds resulting from portfolio manager substitutions made independent of the
Reorganizations, and volatility in the marketplace, the actual tax impact of the
Reorganizations could differ substantially from those described below.
Proposal 1: Reorganization of RiverSource Partners Aggressive Growth Fund into
RiverSource Mid Cap Growth Fund: As of September 23, 2009, RiverSource Partners
Aggressive Growth Fund (the "Selling Fund") had net realized losses (including
capital loss carryforwards) equal to approximately 149.0% of net assets (which
included a capital loss carryforward equal to about 90% of net assets that was
due to expire at the end of the Fund's current taxable year) and RiverSource Mid
Cap Growth Fund ("Buying Fund") had net realized losses (including capital loss
carryforwards) equal to approximately 10.5% of net assets, and Selling Fund and
Buying Fund had net unrealized gains equal to approximately 19.4% and 9.6% of
net assets, respectively. If the Reorganization had occurred on September 23,
2009, the loss limitation rules would have substantially limited the combined
Fund's ability to use Selling Fund losses to offset gains recognized by the
combined Fund, potentially resulting in a significantly greater amount of
taxable distributions, and therefore a greater tax cost, to Selling Fund
74
shareholders than if the Reorganization had not occurred. In addition, to the
extent Selling Fund's losses were used to offset gains of the combined Fund, the
tax benefit would have been spread over a larger group of shareholders than if
the Reorganization had not occurred, resulting in a potential tax cost to
Selling Fund shareholders.
Subsequent to September 23, 2009, Selling Fund experienced significant portfolio
turnover. The recognition of gain or loss resulting from such portfolio turnover
could increase the potential tax cost of the Reorganization to Selling Fund
shareholders relative to the costs described above.
Proposal 2: Reorganization of RiverSource Partners Select Value Fund into
RiverSource Mid Cap Value Fund: As of September 23, 2009, RiverSource Partners
Select Value Fund (the "Selling Fund") had net realized losses (including
capital loss carryforwards) equal to approximately 40.0% of its net assets and
unrealized gains equal to approximately 13.1% of its net assets. RiverSource Mid
Cap Value Fund ("Buying Fund") had no capital loss carryforwards, net realized
losses equal to approximately 28.2% of its nets assets and unrealized losses
equal to approximately 3.1% of its net assets. If the Reorganization had
occurred on September 23, 2009, the loss limitation rules would not have
significantly affected the combined Fund's ability to use Selling Fund losses to
offset gains recognized by the combined Fund. Furthermore, Selling Fund
shareholders might have benefited from the use of Buying Fund's losses to offset
gains.
Subsequent to September 23, 2009, Selling Fund experienced significant portfolio
turnover. The recognition of gain or loss resulting from such portfolio turnover
could increase the potential tax cost of the Reorganization to Selling Fund
shareholders relative to the costs described above.
Proposal 3: Reorganization of RiverSource Partners Small Cap Equity Fund into
Seligman Smaller-Cap Value Fund: As of September 23, 2009, RiverSource Partners
Small Cap Equity Fund (the "Selling Fund") and Seligman Smaller-Cap Value Fund
("Buying Fund") had net realized losses (including capital loss carryforwards)
equal to approximately 50.2% and 50.4% of net assets, respectively, and net
unrealized gains equal to 6.6% and 25.0% of net assets, respectively. If the
Reorganization had occurred on September 23, 2009, the loss limitation rules
would have applied to Selling Fund's losses, and also to certain of Buying
Fund's losses (namely, the pre-acquisition losses of RiverSource Small Cap
Advantage Fund on its acquisition by Buying Fund on September 14, 2009, which as
of September 23, 2009 were equal to approximately 45.0% of Buying Fund's net
assets). The limitation on Selling Fund's losses would have resulted in a
potential tax cost to Selling Fund shareholders. In addition, Selling Fund
shareholders would have shared in Buying Fund's unrealized gains, and the
subsequent realization of those gains might have further increased the tax cost
to Selling Fund shareholders.
Subsequent to September 23, 2009, Selling Fund experienced significant portfolio
turnover. The recognition of gain or loss resulting from such portfolio turnover
could increase the potential tax cost of the Reorganization to Selling Fund
shareholders relative to the costs described above.
Proposal 4: Reorganization of RiverSource Partners Small Cap Growth Fund into
Seligman Frontier Fund: As of September 23, 2009, RiverSource Partners Small Cap
Growth Fund (the "Selling Fund") had net realized losses (including capital loss
carryforwards) equal to approximately 38.3% of its net assets and unrealized
gains equal to approximately 8.1% of its net assets. Seligman Frontier Fund
("Buying Fund") had net realized losses (including capital loss carryforwards)
equal to approximately 23.3% of its net assets and unrealized losses equal to
approximately 0.4% of its net assets. If the Reorganization had occurred on
September 23, 2009, the loss limitation rules would have applied to Buying
Fund's losses rather than Selling Fund's losses. Therefore, the ability to use
Selling Fund's losses to offset gains recognized by the combined Fund would not
have been limited (except as required under the proration rule for the taxable
year of the Reorganization described above). However, because Selling Fund's
losses would have been available to reduce subsequent capital gain distributions
to shareholders of the combined Fund, the tax benefit of such losses would have
been spread over a larger group of shareholders than if the Reorganization had
not occurred, resulting in a potential tax cost to Selling Fund shareholders.
Subsequent to September 23, 2009, Selling Fund experienced significant portfolio
turnover. The recognition of gain or loss resulting from such portfolio turnover
could increase the potential tax cost of the Reorganization to Selling Fund
shareholders relative to the costs described above.
Proposal 5: Reorganization of Seligman Global Smaller Companies Fund into
RiverSource Partners International Small Cap Fund: As of September 23, 2009,
Seligman Global Smaller Companies Fund (the "Selling Fund") and RiverSource
Partners International Small Cap Fund ("Buying Fund") had net realized losses
(including capital loss carryforwards) equal to approximately 94.9% and 57.2% of
net assets, respectively, and net unrealized gains equal to 11.5% and 11.6% of
net assets, respectively. If the Reorganization had occurred on September 23,
2009, a limitation would have been imposed on the use of Buying Fund's losses,
but the ability to use Selling Fund's losses to offset gains realized by the
combined Fund would not have been limited (except as required under the
proration rule for the taxable year of the Reorganization described above). At
the same time, however, Selling Fund's losses would have been available to
reduce subsequent capital gain distributions of the combined Fund, spreading the
tax benefit of such losses over a larger group of shareholders than if the
Reorganization had not occurred, resulting in a potential tax cost to Selling
Fund shareholders.
75
Subsequent to September 23, 2009, Selling Fund expects to experience significant
portfolio turnover in connection with the Reorganization. The recognition of
gain or loss resulting from such portfolio turnover could increase the potential
tax cost of the Reorganization to Selling Fund shareholders relative to the
costs described above.
Proposal 6: Reorganization of RiverSource Tax-Exempt Money Market Fund into
RiverSource Government Money Market Fund: As of September 23, 2009, RiverSource
Tax-Exempt Money Market Fund (the "Selling Fund") had negligible capital loss
carryforwards and realized gains and no unrealized gains or losses. RiverSource
Government Money Market Fund ("Buying Fund") had no capital loss carryforwards,
no realized gains or losses, and no unrealized gains or losses. Because neither
Fund had a noticeable amount of capital gains or losses (as is common for money
market funds due to the nature of their investments), had the Reorganization
occurred on September 23, 2009, neither the loss limitation rules nor the
blending of tax attributes of the Funds would have had an impact on the amount
of distributions to Selling Fund shareholders as compared to if no
Reorganization had occurred.
The tax principles described above are not expected to change. However, their
application and, at a minimum, the specific percentages noted above will change
prior to each Reorganization because of market developments and volatility in
the marketplace, any pre-Reorganization realignments or other sales of portfolio
securities that might occur or that already have occurred, and shareholder
activity in the Funds, among other changes.
Shareholders of a Selling Fund should consult their tax advisors regarding the
effect, if any, of the Reorganization in light of their individual
circumstances. Because the foregoing discussion relates only to the federal
income tax consequences of the Reorganizations shareholders of a Selling Fund
should also consult their tax advisors as to the state, local and foreign tax
consequences, if any, of the Reorganizations.
REASONS FOR THE PROPOSED REORGANIZATIONS AND BOARD DELIBERATIONS
The Board believes that each proposed Reorganization will be advantageous to
Selling Fund and Buying Fund shareholders based on its consideration of the
following matters:
- TERMS AND CONDITIONS OF THE REORGANIZATION. The Board considered the terms and
conditions of each Reorganization as described in the previous paragraphs.
- TAX CONSEQUENCES. [The Board considered the tax-free nature of each
Reorganization. The Board also considered the relative tax situations of each
Fund and the resulting tax impact of the Reorganization to Selling Fund
shareholders, and noted that the benefits of each Reorganization should
outweigh any resulting tax cost to shareholders. With respect to the proposed
Reorganization of RiverSource Tax-Exempt Money Market Fund into RiverSource
Government Money Market Fund, the Board considered, in particular, the
potential impact on shareholders of the Selling Fund once they become Buying
Fund shareholders who can expect to receive distributions from the Buying Fund
that are taxable for U.S. federal income tax purposes. As a result, the Board
reviewed the historical tax equivalent yields of both Funds, noting, in
particular, that each Fund currently maintains a similar slight positive
yield, which is supported by voluntary expense caps (noted below under
"Expense Ratios"). With regard to the tax-free nature of the Reorganization,
the Board considered each Fund's relative performance, observing that, as a
condition of the tax opinion they were receiving, the combined Fund would be
required to continue to hold securities of the Selling Fund and, as a result,
the Buying Fund, a U.S. government Fund, would have a portion of its portfolio
consist of municipal securities for a short period of time (e.g., until such
securities matured). Nevertheless, the following mitigating factors were
pointed out, among others: (i) the municipal securities to be transferred are
expected to be rated in the highest credit rating category, albeit not U.S.
government credit quality; (ii) the transferred holdings would likely mature
between 1 and 60 days thereby reducing the impact of any incremental credit
risk (the transferred holdings would represent the average maturity of the
Selling Fund's portfolio at the time of merger, providing that such average
maturity hadn't changed significantly in anticipation of the merger); (iii)
the tax equivalent yields on the transferred securities are expected to exceed
the Buying Fund's then-current portfolio yield; and (iv) the expense
advantages to the Buying Fund that would result from the Reorganization (noted
below under "Expense Ratios"). The Boards also accorded weight to the other
benefits of the Reorganization described below under "Performance and Other
Factors."
With respect to the Reorganizations of RiverSource Partners Aggressive Growth
Fund into RiverSource Mid Cap Growth Fund and RiverSource Partners Small Cap
Equity Fund into Seligman Smaller-Cap Value Fund, the Board considered, in
particular, the potential tax costs arising from the limitation imposed
following the Reorganization on the capital loss carryforwards of each of these
Selling Funds (which, in the case of RiverSource Partners Aggressive Growth
Fund, are significant). As a result, as described in more detail in the section
entitled "Tax Status of the Reorganizations," it is possible that the
Reorganization will have the effect of accelerating income taxes (by virtue of
distributing additional taxable income) to taxable shareholders of these Funds.
The Board observed, however, the following mitigating factors: (i) these
Selling Funds, as a result of the Reorganization, are expected to experience
expense savings which, over the long term, should outweigh the tax cost to
shareholders; and (ii) a majority of these Selling Funds' shareholders are
represented by "qualified"
76
accounts that would experience no tax cost as a result of the limitation on
capital loss carryforwards. The Board also accorded weight to RiverSource
Investments' agreement to further cap the expenses of the combined Funds (as
discussed below under "Expense Ratios"). The Boards also accorded weight to the
other benefits of each Reorganization described below under "Performance and
Other Factors."]
- CONTINUITY OF INVESTMENT. The Board took into account the fact that each
Selling Fund and the corresponding Buying Fund have similar or identical
investment objectives and, except as noted below and as discussed in more
detail under each proposal, similar investment strategies:
Proposal 1: Reorganization of RiverSource Partners Aggressive Growth Fund into
RiverSource Mid Cap Growth Fund: The Board considered that RiverSource Partners
Aggressive Growth Fund's investment objective of providing shareholders with
long-term capital growth is substantially similar to that of RiverSource Mid
Cap Growth Fund, which is to provide shareholders with growth of capital,
because each Fund is intended for long-term investors. The Board also took into
account the similarity in investment strategies in that both Funds invest
primarily in equity securities of medium-sized companies whose market
capitalization at the time of purchase falls within the range of the Russell
Midcap Growth Index. The Board considered that RiverSource Mid Cap Growth Fund
is designed to invest at least 80% of its net assets in equity securities of
medium-sized companies, whereas RiverSource Partners Aggressive Growth Fund has
no minimum percentage. The Board also took into account that both Funds share
common benchmarks, the Russell Midcap Growth Index and the Lipper Mid-Cap
Growth Funds Index. Also, the Board considered that, although both Funds have
RiverSource Investments as an investment adviser, RiverSource Partners
Aggressive Growth Fund had been subadvised by American Century and Turner.
Proposal 2: Reorganization of RiverSource Partners Select Value Fund into
RiverSource Mid Cap Value Fund: The Board considered that the Funds have an
identical investment objective of providing shareholders with long-term growth
of capital. The Board also took into account the similarity in investment
strategies in that both Funds invest primarily in equity securities of medium-
sized companies. The Board considered that RiverSource Mid Cap Value Fund
invests at least 80% of its net assets in equity securities of medium-sized
companies; whereas, RiverSource Partners Select Value Fund has no specified
minimum percentage. The Board considered that both Funds share common
benchmarks, the Russell Mid Cap Value Index and the Lipper Mid-Cap Value Funds
Index. Also, the Board considered that, although both Funds currently have
RiverSource Investments as an investment manager, RiverSource Partners Select
Value Fund had been subadvised by Systematic and WEDGE.
Proposal 3: Reorganization of RiverSource Partners Small Cap Equity Fund into
Seligman Smaller-Cap Value Fund: The Board considered that the Funds have an
identical investment objective of providing shareholders with long-term capital
appreciation. The Board also took into account the similarity in investment
strategies in that both Funds invest in value stocks of small market companies.
The Board considered that RiverSource Partners Small Cap Equity Fund defines
small market companies as those that have a market capitalization not greater
than that of the largest company in the Russell 2000 Index or the S&P SmallCap
600 Index at the time of investment, whereas Seligman Smaller-Cap Value Fund
defines small market companies as those with a market capitalization of $3
billion or less at the time of investment.
Proposal 4: Reorganization of RiverSource Partners Small Cap Growth Fund into
Seligman Frontier Fund: The Board considered that RiverSource Partners Small
Cap Growth Fund's investment objective of providing shareholders with long-term
capital growth is substantially similar to that of Seligman Frontier Fund,
which is to provide shareholders with growth of capital. The Board also took
into account the similarity in investment strategies in that both Funds invest
primarily in equity securities of small U.S. companies. The Board observed that
RiverSource Partners Small Cap Growth Fund invests at least 80% of its net
assets in small cap companies; whereas Seligman Frontier Fund invests at least
65% of its net assets in small cap companies. The Board also considered that,
although both Funds currently have RiverSource Investments as an investment
manager, RiverSource Partners Small Cap Growth Fund had been subadvised by
Essex Investment Management and UBS Global Asset Management.
Proposal 5: Reorganization of Seligman Global Smaller Companies Fund into
RiverSource Partners International Small Cap Fund: The Board considered that
the Funds have the same investment objectives. The Board took into account
that, although both Funds invest in equity securities of smaller non-U.S.
companies, Seligman Global Smaller Companies Fund invests 80% in smaller U.S.
and non-U.S. companies and may invest in companies domiciled in any country
(although it typically invests in developed market countries); whereas,
RiverSource Partners International Small Cap Fund invests 80% in small
companies whose market capitalization falls within the range of capitalization
of companies in the S&P Global ex-U.S. Small Cap Index and may invest in mature
markets and in emerging markets. The Board considered that RiverSource Partners
International Small Cap Fund invests substantially in non-U.S. companies while
Seligman Global Smaller Companies Fund is only required to invest at least 40%
of its net assets in such companies. The Board also noted that RiverSource
Investments serves as the investment manager for each Fund and is responsible
for the oversight of each Fund's subadviser, which provides day-to-day
management of each Fund, and that Seligman Global Smaller Companies Fund is
77
subadvised by Wellington and RiverSource Partners International Small Cap Fund
is subadvised by Batterymarch and Columbia WAM.
Proposal 6: Reorganization of RiverSource Tax-Exempt Money Market Fund into
RiverSource Government Money Market Fund: The Board considered that both Funds
have a similar investment objective in that they both seek maximum income
consistent with preserving capital and liquidity. However, the Board also
considered the key difference that RiverSource Tax-Exempt Money Market Fund, as
part of its investment objective, must seek high current income exempt from
federal income tax; whereas, the Buying Fund has no such tax-exempt aspect in
its objective (or strategy). In this regard, the Board also took into account
that RiverSource Tax-Exempt Money Market Fund invests substantially in money
market municipal securities (exempt from federal income tax and the alternative
minimum tax); whereas, RiverSource Government Money Market Fund invests in
money market securities that are issued or guaranteed by the U.S. government,
its agencies or instrumentalities. In this regard, the Board reviewed the
resulting tax implications for Selling Fund shareholders (i.e., becoming
shareholders of a Fund that generates income distributions subject to federal
income tax) that are discussed above under "Tax Consequences," noting its
analysis of current yields of both Funds and historical tax-equivalent yields
(as also discussed above under "Tax Consequences"). The Board also observed
that RiverSource Tax-Exempt Money Market Fund continues to be faced with a
limited supply of investment opportunities in tax-exempt money market
instruments which, together with the Fund's relatively higher gross expense
ratios, challenges the long-term viability of the Fund.
- EXPENSE RATIOS. The Board considered the relative expenses of the Funds.
Specifically, the Board considered that, as of the end of each Fund's most
recent fiscal year, the net expense ratio (reflecting any fee waiver or
expense reimbursement because of contractual expense caps) for each Selling
Fund's Class A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and
Class R5 shares, as applicable (before giving effect to any applicable
performance incentive adjustment and excluding certain other fees and
expenses), except for Seligman Global Smaller Companies Fund Class R2 and
Class R5 shares and RiverSource Partners Select Value Fund Class A, Class B
and Class C shares, was equal to or higher than the net expense ratio for the
corresponding Buying Fund's class of shares (before giving effect to any
applicable performance incentive adjustment and excluding certain other fees
and expenses). The Board also evaluated the anticipated expense ratio impacts
to other share classes of the Buying Funds not involved in the
Reorganizations. The Board further noted that the level of any reduction in
expense ratio for the Selling Funds would vary by share class. The Board also
examined the expense impact of each Reorganization on shareholders of each
Buying Fund and, in this regard, observed that, except as noted below, the net
expense ratio (excluding any performance incentive adjustment) for each Buying
Fund is expected to decrease or remain the same as a result of the relevant
Reorganization. More particular considerations (based on analysis of Class A
shares, unless otherwise indicated) are set forth below:
Proposal 1: Reorganization of RiverSource Partners Aggressive Growth Fund into
RiverSource Mid Cap Growth Fund: The Board considered that, based on most
recent fiscal year-end data, the gross expense ratio and net expense ratio
(reflecting the current contractual fee waiver and expense reimbursement) of
RiverSource Partners Aggressive Growth Fund (before giving effect to any
applicable performance incentive adjustment and excluding certain other fees
and expenses) are the same as or higher than the gross expense ratio and net
expense ratio of RiverSource Mid Cap Growth Fund. The Board also considered the
commitment of the investment manager and its affiliates to waive certain fees
and expenses for one year following the effective date of the merger based on
the least of (i) RiverSource Mid Cap Growth Fund's expense ratio (before giving
effect to any performance incentive adjustment) as of its fiscal year-end on
November 30, 2009; (ii) RiverSource Mid Cap Growth Fund's expense cap
(including the assets of both RiverSource Mid Cap Growth Fund and RiverSource
Partners Aggressive Growth Fund) based on application of the Board's pricing
philosophy that it applies when considering renewal of the Fund's investment
management services agreement with the investment manager, which results in the
total expense ratio of the Fund being set at or below the median expense ratio
of mutual funds in the same Lipper comparison group; or (iii) RiverSource
Partners Aggressive Growth Fund's current expense cap commitment pursuant to
which net fund expenses (excluding fees and expenses of acquired funds), before
giving effect to any performance incentive adjustment, will not exceed 1.28%
for Class A shares, and that, based on this commitment, the gross expense ratio
of RiverSource Partners Aggressive Growth Fund is expected to decline by at
least 0.36%, as a result of the Reorganization. With respect to the Board's
review of the expense impact on RiverSource Mid Cap Growth Fund's shareholders,
the Board took into account that, although the net expense ratios for the
Fund's Class A, Class B and Class C shares would increase slightly after giving
effect to the Reorganization, the additional expense cap commitment by the
investment manager and its affiliates would have the effect of reducing
expenses going forward (or preventing likely future increases).
Proposal 2: Reorganization of RiverSource Partners Select Value Fund into
RiverSource Mid Cap Value Fund: The Board considered that, based on most recent
fiscal year-end data, the gross expense ratio and net expense ratio (reflecting
a contractual fee waiver and expense reimbursement) of RiverSource Partners
Select Value Fund (before giving effect to any applicable performance incentive
adjustment and excluding certain other fees and expenses) are higher than the
respective expense ratios of RiverSource Mid Cap Value Fund (except for Class
A, Class B and Class C shares), which currently does not have an expense cap.
The Board observed current expense trends and considered the commitment of the
investment
78
manager and its affiliates to waive certain fees and expenses for one year
following the effective date of the Reorganization based on the least of (i)
RiverSource Mid Cap Value Fund's expense ratio (before giving effect to any
performance incentive adjustment) as of its fiscal year-end on September 30,
2009, which was 1.31% for Class A shares; or (ii) RiverSource Mid Cap Value
Fund's expense cap (including the assets of both RiverSource Mid Cap Value Fund
and RiverSource Partners Select Value Fund) based on application of the Board's
pricing philosophy that it applies when considering renewal of the Fund's
investment management services agreement with the investment manager, which
would result in the total expense ratio of the Fund being set at or below the
median expense ratio of mutual funds in the same Lipper comparison group, and
that the gross expense ratio of RiverSource Partners Select Value Fund is
expected to decline by at least 0.34%. With respect to the Board's review of
the expense impact on RiverSource Mid Cap Value Fund's shareholders, the Board
took into account that, although the net expense ratios for the Fund's Class A,
Class B and Class C shares would increase slightly, the increase likely would
have occurred irrespective of the Reorganization (based on current assets of
the Fund), and the additional expense cap commitment by the investment manager
and its affiliates would have the effect of reducing expenses going forward (or
preventing likely future increases).
Proposal 3: Reorganization of RiverSource Partners Small Cap Equity Fund into
Seligman Smaller-Cap Value Fund: The Board considered that, based on most
recent fiscal year-end data, the gross expense ratio and net expense ratio
(reflecting a contractual fee waiver and expense reimbursement) of RiverSource
Partners Small Cap Equity Fund (before giving effect to any applicable
performance incentive adjustment and excluding certain other fees and expenses)
are higher than or the same as the gross expense ratio and net expense ratio of
Seligman Smaller-Cap Value Fund. The Board also considered the commitment of
the investment manager and its affiliates to waive certain fees and expenses
for one year following the effective date of the merger based on the least of
(i) Seligman Smaller-Cap Value Fund's expense ratio (before giving effect to
any performance incentive adjustment) as of its fiscal year-end on December 31,
2009; (ii) Seligman Smaller-Cap Value Fund's expense cap (including the assets
of both Seligman Smaller-Cap Value Fund and RiverSource Partners Small Cap
Equity Fund) based on application of the Board's pricing philosophy that it
applies when considering renewal of the Fund's investment management services
agreement with the investment manager, which would result in the total expense
ratio of the Fund being set at or below the median expense ratio of mutual
funds in the same Lipper comparison group; or (iii) RiverSource Partners Small
Cap Equity Fund's current expense cap commitment pursuant to which net fund
expenses (excluding fees and expenses of acquired funds) before giving effect
to any performance incentive adjustment, will not exceed 1.33% for Class A
shares, and that, based on this commitment, the gross expense ratio of
RiverSource Partners Small Cap Equity Fund is expected to decrease by at least
0.03% and there would be no change to net expenses as a result of the
Reorganization. The Board also took into account that shareholders of
RiverSource Partners Small Cap Equity Fund are subject to a performance
incentive arrangement, while Seligman Smaller-Cap Value Fund has no such
arrangement.
Proposal 4: Reorganization of RiverSource Partners Small Cap Growth Fund into
Seligman Frontier Fund: The Board observed that, based on most recent fiscal
year-end data, although the gross expense ratio of RiverSource Partners Small
Cap Growth Fund (before giving effect to any applicable performance incentive
adjustment and excluding certain other fees and expenses) is expected to
increase by 0.06% as a result of the Reorganization, the net expense ratio
would be the same (no increase) as a result of the commitment to waive fees and
cap expenses by the investment manager and its affiliates. The Board also took
into account that shareholders of RiverSource Partners Small Cap Growth Fund
are subject to a performance incentive arrangement, which could potentially
impact the Fund's expenses, while Seligman Frontier Fund has no such
arrangement.
Proposal 5: Reorganization of Seligman Global Smaller Companies Fund into
RiverSource Partners International Small Cap Fund: The Board noted that, based
on most recent fiscal year-end data, although the gross expense ratio (before
giving effect to any applicable performance incentive adjustment and excluding
certain other fees and expenses) of Seligman Global Smaller Companies Fund, is
expected to increase by 0.20%, the net expense ratio would decline by 0.12%, as
a result of the commitment to waive fees and cap expenses by the investment
manager and its affiliates. The Board also observed that Seligman Global
Smaller Companies Fund Class R2 and Class R5 shares would each experience a
modest increase in net expenses as a result of the Reorganization. Further, the
Board took into account that shareholders of RiverSource Partners International
Small Cap Fund are subject to a performance incentive arrangement, which could
potentially impact the Fund's expenses, while Seligman Global Smaller Companies
Fund has no such arrangement.
Proposal 6: Reorganization of RiverSource Tax-Exempt Money Market Fund into
RiverSource Government Money Market Fund: The Board noted that, based on most
recent fiscal year-end data, although the gross expense ratio (excluding
certain applicable fees and expenses) of RiverSource Tax-Exempt Money Market
Fund is expected to increase by 0.23% as a result of the Reorganization, the
net expense ratio would decline by 0.02% as a result of the Reorganization
based on the commitment by the investment manager and its affiliates to waive
fees and cap expenses.
- ECONOMIES OF SCALE. The Board observed that by combining the Funds, in
addition to potential immediate economies of scale of a larger fund, the
combined Fund would be able to take advantage of other economies of scale
associated with a
79
larger fund. For example, a larger fund may realize breakpoints more quickly,
it should have an enhanced ability to effect portfolio transactions on more
favorable terms and may have greater investment flexibility. Furthermore, the
Board also considered that higher aggregate net assets resulting from each
Reorganization and the opportunity for net cash inflows (or reduced outflows)
may reduce the risk that, if net assets of the Selling Fund fail to grow, or
diminish, its total expense ratio could rise from current levels as fixed
expenses, such as audit expenses and accounting expenses that are charged on a
per Fund basis, become a larger percentage of net assets.
- COSTS. The Board considered the fact that the investment manager and its
affiliates have agreed to bear all solicitation expenses associated with each
Reorganization and to bear any other costs of effecting each Reorganization
(other than any brokerage or other transaction costs associated with the sale
or purchase of portfolio securities in connection with the Reorganization).
- DILUTION. The Board considered the fact that the Reorganization will not
dilute the interests of the current shareholders because it would be effected
on the basis of the relative net asset value per share of the Selling Fund and
Buying Fund, respectively. Thus, for example, a Class A shareholder of a
Selling Fund will receive Class A shares of the corresponding Buying Fund
equal in value to his or her Class A shares in the Selling Fund at the time of
the Reorganization.
- PERFORMANCE AND OTHER FACTORS. The Board considered the relative performance
records of each of the Funds, noting, however, that past performance is no
guarantee of future results. The Board also considered the fact that the
Reorganizations should allow for a more concentrated selling effort by the
Funds' distributor, thereby potentially benefiting each of the Funds, and that
reduced outflows or increased inflows could help all Fund shareholders achieve
further economies of scale (see "Economies of Scale" above). The Board further
took into account the investment manager's belief that each Selling Fund, as a
stand-alone fund, was less likely to experience any growth in assets from
investor inflows in the near term. In particular, for each Reorganization the
Board observed:
Proposal 1: Reorganization of RiverSource Partners Aggressive Growth Fund into
RiverSource Mid Cap Growth Fund: The Board observed the generally stronger
track record of RiverSource Mid Cap Growth Fund, but noted that both
RiverSource Partners Aggressive Growth Fund and RiverSource Mid Cap Growth Fund
are currently run by the same management team, and, thus, their respective
performance, going forward, absent the Reorganization, would be substantially
similar given the similar objectives and strategies of the Funds. The Board
noted the weak asset levels of RiverSource Partners Aggressive Growth Fund and
its relative weak prospects for asset growth, particularly compared to
RiverSource Mid Cap Growth Fund. The Board accorded particular weight to the
fact that RiverSource Mid Cap Growth Fund was more than 2 times the size of
RiverSource Partners Aggressive Growth Fund.
Proposal 2: Reorganization of RiverSource Partners Select Value Fund into
RiverSource Mid Cap Value Fund: The Board noted that the performance of
RiverSource Mid Cap Value Fund over the long term was generally stronger that
the performance of RiverSource Partners Select Value Fund (both on a relative
basis and when compared to their respective peer groups) and that both
RiverSource Partners Select Value Fund and RiverSource Mid Cap Value Fund are
currently run by the same management team, and, thus, their respective
performance, going forward, absent the Reorganization, would be substantially
similar given the similar objectives and strategies of the Funds. The Board
also noted the relative weak prospects for asset growth for RiverSource
Partners Select Value Fund compared to RiverSource Mid Cap Value Fund. The
Board accorded particular weight to the fact that RiverSource Mid Cap Value
Fund was more than 6 times the size of RiverSource Partners Select Value Fund.
Proposal 3: Reorganization of RiverSource Partners Small Cap Equity Fund into
Seligman Smaller-Cap Value Fund: The Board observed that the performance of
RiverSource Partners Small Cap Equity Fund is similar to Seligman Smaller-Cap
Value Fund and that both Funds are currently managed by the same investment
management team; however, absent the Reorganization, RiverSource Partners Small
Cap Equity Fund has weak prospects for asset growth compared to Seligman
Smaller-Cap Value Fund. The Board accorded particular weight to the fact that
Seligman Smaller-Cap Value Fund was 3 times the size of RiverSource Partners
Small Cap Equity Fund.
Proposal 4: Reorganization of RiverSource Partners Small Cap Growth Fund into
Seligman Frontier Fund: The Board observed that the performance of RiverSource
Partners Small Cap Growth Fund is similar to Seligman Frontier Fund and that
both Funds are currently managed by the same investment management team;
however, absent the Reorganization, RiverSource Partners Small Cap Growth Fund
has weak prospects for asset growth compared to Seligman Frontier Fund.
Proposal 5: Reorganization of Seligman Global Smaller Companies Fund into
RiverSource Partners International Small Cap Fund: The Board observed that the
performance of RiverSource Partners International Small Cap Fund was
competitive, though not as good as the performance of Seligman Global Smaller
Companies Fund.
Proposal 6: Reorganization of RiverSource Tax-Exempt Money Market Fund into
RiverSource Government Money Market Fund: The Board observed that, in the
current market conditions, both Funds are being capped to maintain a positive
yield.
80
The Board also noted that RiverSource Tax-Exempt Money Market Fund is small
and, unless money market rates change significantly, the Fund is likely to
continue experiencing net outflows, further reducing assets and increasing Fund
expenses.
- POTENTIAL BENEFITS TO THE INVESTMENT MANAGER AND ITS AFFILIATES. The Board
considered the potential benefits from the Reorganizations that could be
realized by the investment manager and its affiliates, including the
elimination of expenses incurred in duplicative efforts to administer separate
Funds. The Board also noted, however, that shareholders of each Selling Fund
are expected to benefit over time from any decrease in overall operating
expense ratios resulting from the proposed Reorganizations in addition to the
other benefits discussed above.
BOARD DETERMINATIONS
After considering the factors described above and other relevant information, at
a meeting held on November 12, 2009, each Selling Fund Board, and each Buying
Fund including a majority of the independent Board members, found that
participation in the relevant Reorganization is in the best interests of each
Fund and that the interests of existing shareholders of the Fund will not be
diluted as a result of the Reorganization.
Fund will not be diluted as a result of the Reorganization.
BOARD RECOMMENDATION AND REQUIRED VOTE
The Board recommends that shareholders of each Selling Fund approve its proposed
Agreement.
For RiverSource Partners Aggressive Growth Fund, RiverSource Partners Select
Value Fund, RiverSource Partners Small Cap Equity Fund, RiverSource Partners
Small Cap Growth Fund and RiverSource Tax-Exempt Money Market Fund, the
Agreement must be approved by a majority of the voting power of all shares
entitled to vote.
For Seligman Global Smaller Companies Fund, the Agreement must be approved by
the affirmative vote of a majority of the outstanding voting securities of the
Selling Fund. A vote of a majority of the outstanding voting securities of the
Selling Fund is defined in the 1940 Act as the affirmative vote of the lesser of
(a) 67% or more of the shares of the Selling Fund that are present or
represented by proxy at the Meeting, if the holders of more than 50% of the
outstanding shares of the Selling Fund are present or represented by proxy at
the Meeting; or (b) more than 50% of the outstanding shares of the Selling Fund.
If the Agreement is not approved for any Selling Fund, the Board will consider
what further action should be taken with respect to such Selling Fund. The
approval of the Reorganization of one Selling Fund is not conditioned upon the
approval of the Reorganization of any other Selling Fund.
If shareholders approve the Reorganization of their Selling Fund, it is
anticipated to occur before the end of the second quarter of 2010.
81
SECTION B -- PROXY VOTING AND SHAREHOLDER MEETING INFORMATION
Reference to the "Fund" in this section is a reference to each Selling Fund.
References to the "RiverSource Selling Funds" in this section are references to
RiverSource Partners Aggressive Growth Fund, RiverSource Partners Select Value
Fund, RiverSource Partners Small Cap Equity Fund, RiverSource Partners Small Cap
Growth Fund and RiverSource Tax-Exempt Money Market Fund. References to the
"Seligman Selling Fund" in this section are references to Seligman Global
Smaller Companies Fund.
VOTING. Shareholders of record of each of RiverSource Partners Aggressive Growth
Fund, RiverSource Partners Select Value Fund, RiverSource Partners Small Cap
Equity Fund, RiverSource Partners Small Cap Growth Fund and RiverSource Tax-
Exempt Money Market Fund on Jan. 15, 2010 are entitled to vote based on their
total dollar interest in the Fund irrespective of which class they own.
Shareholders of record of Seligman Global Smaller Companies Fund on Jan. 15,
2010 are entitled to vote based on the number of shares they own in the Fund
irrespective of which class they own. Unless otherwise restricted by the 1940
Act or by applicable state law, all share classes of a Selling Fund will vote
together as a class on its proposed Reorganization.
A quorum is required to take action at the Meeting. With respect to the
RiverSource Selling Funds, the presence at the Meeting, in person or by proxy,
of shareholders entitled to cast at least ten percent (10%) of the shares
outstanding and entitled to vote at the Meeting shall constitute a quorum. With
respect to the Seligman Selling Fund, the presence at the Meeting, in person or
by proxy, of at least one-third of all shares outstanding and entitled to vote
at the Meeting shall constitute a quorum.
All votes count toward a quorum, regardless of how they are voted (For, Against
or Abstain). Broker non-votes will be counted toward a quorum but not toward the
approval of any proposal. (Broker non-votes are shares for which the underlying
owner has not voted and the broker holding the shares does not have authority to
vote.)
If your shares are held in an IRA account with Ameriprise Trust Company as
custodian, you have the right to instruct the IRA Custodian how to vote those
shares. The IRA Custodian will vote any shares for which it has not received
voting instructions in proportionately the same manner -- either For, Against,
or Abstain -- as other Fund shareholders have voted.
PROXY SOLICITATION. If you properly authorize your proxy by internet, telephone
or facsimile, or by executing and returning the enclosed proxy card by mail, and
your proxy is not subsequently revoked, your votes will be cast at the Meeting,
and at any postponement or adjournment thereof. If you give instructions, your
votes will be cast in accordance with your instructions. If you return your
signed proxy card without instructions, your votes will be cast in favor of the
Reorganization of your Fund.
PROXY STATEMENT DELIVERY. "Householding" is the term used to describe the
practice of delivering one copy of a document to a household of shareholders
instead of delivering one copy of a document to each shareholder in the
household. Certain shareholders of the Fund who share a common address and who
have not opted out of the householding process may receive a single copy of the
proxy statement along with the proxy card(s). If you received more than one copy
of the proxy statement, you may elect to household in the future if permitted by
your financial intermediary/financial institution. Contact the financial
intermediary/financial institution through which you purchased the Fund to
determine whether householding is an option for your account. If you received a
single copy of the proxy statement, you may opt out of householding in the
future by contacting your financial intermediary/financial institution.
An additional copy of this proxy statement may be obtained by writing to the
following address: Computershare Fund Services, c/o Operation Department, 280
Oser Ave., Hauppauge, NY 11788 or calling Computershare Fund Services, toll free
at 1(866) 859-8682.
REVOKING YOUR PROXY. If you execute, date and submit a proxy card with respect
to your Fund, you may revoke your proxy prior to the voting thereof by providing
written notice to your Fund (Attention: Secretary) at 50606 Ameriprise Financial
Center, Minneapolis, MN 55474 or change your instructions by submitting a
subsequently executed and dated proxy card, by authorizing your proxy by
internet, telephone or facsimile on a later date or by attending the Meeting and
casting your vote in person. If you authorize your proxy by internet, telephone
or facsimile, you may change your instructions prior to the voting thereof by
authorizing a subsequent proxy by internet, telephone or facsimile or by
completing, signing and returning a proxy card dated as of a date that is later
than your last internet, telephone or facsimile proxy authorization or by
attending the Meeting and casting your vote in person. Merely attending the
Meeting without voting will not revoke your prior proxy.
SIMULTANEOUS MEETINGS. The meeting for each Fund will be held simultaneously
with the meeting for each other Fund, with each Reorganization being voted on
separately by the shareholders of the relevant Fund. If any shareholder objects
to the holding of simultaneous meetings, the shareholder may move for an
adjournment of his or her Fund's meeting to a time after the Meeting so that a
meeting for that Fund may be held separately. If a shareholder makes this
motion, the persons named as proxies will take into consideration the reasons
for the objection in deciding whether to vote in favor of the adjournment, and
may vote for or against the adjournment in their discretion.
82
SOLICITATION OF PROXIES. The Board is asking for your vote and for you to vote
as promptly as possible. The investment manager will pay the expenses of the
solicitation. Supplementary solicitations may be made by internet, telephone or
facsimile, or by personal contact. Computershare Fund Services has been engaged
to assist in the solicitation of proxies, at an aggregate estimated cost of
$116,000.
SHAREHOLDER PROPOSALS. No proposals were received from shareholders. The Funds
do not hold annual meetings of shareholders. Shareholders who wish to make a
proposal at a Fund's next special meeting, which may not be included in the
Fund's proxy materials, must notify the relevant Fund a reasonable amount of
time before the Fund begins to print and mail its proxy materials. The fact that
a Fund receives a shareholder proposal in a timely manner does not ensure
inclusion of the proposal in the proxy materials, as there are other
requirements in the proxy rules relating to such inclusion.
DISSENTERS' RIGHT OF APPRAISAL FOR RIVERSOURCE SELLING FUNDS. Under Sections
302A.471 and 302A.473 of the Minnesota Business Corporation Act, the RiverSource
Selling Funds' shareholders are entitled to assert dissenters' rights in
connection with their Selling Fund's Reorganization and obtain payment of the
"fair value" of their shares, provided that they comply with the requirements of
Minnesota law. A copy of the relevant provisions is attached as Exhibit B.
Notwithstanding the provision of Minnesota law, the SEC has taken the position
that the use of state appraisal procedures by a mutual fund would be a violation
of Rule 22c-1, the forward pricing rule, under the 1940 Act. This rule states
that no mutual fund may redeem its shares other than at net asset value next
computed after receipt of a request for redemption. It is the SEC's position
that Rule 22c-1 supersedes appraisal provisions in state statutes.
In the interest of ensuring equal valuation for all shareholders, dissenters'
rights will be determined in accordance with the SEC's interpretation. As a
result, if any shareholder elects to exercise dissenters' rights under Minnesota
law, the RiverSource Selling Funds intend to submit this question to a court of
competent jurisdiction. In that event, a dissenting shareholder would not
receive any payment until the end of the court proceeding.
OTHER BUSINESS. The Board does not know of any matters to be presented at the
Meeting other than the Reorganizations. If other business should properly come
before the Meeting, the persons named as proxies will vote thereon in their
discretion.
ADJOURNMENT. With respect to the RiverSource Selling Fund Reorganizations, in
the event that not enough votes are received by the time scheduled for the
Meeting, the persons named as proxies may move for one or more adjournments of
the Meeting for a period of not more than 120 days of the original record date
for the Meeting in the aggregate to allow further solicitation of shareholders
on the proposal. Any adjournment requires the affirmative vote of a majority of
the voting power of the shares present at the Meeting. With respect to the
Seligman Selling Fund Reorganization, if not enough votes are received by the
time scheduled for the Meeting, or, even if a quorum is present, if sufficient
votes in favor of any Reorganization are not received and tabulated prior to the
time scheduled for the Meeting, the chairman of the Meeting may adjourn the
Meeting, with no notice other than an announcement at the Meeting, to a date not
later than the 120th day after the original record date for the Meeting to allow
further solicitation of shareholders on the proposed Reorganization.
If insufficient votes are received by the time of the Meeting, the persons named
as proxies will vote in favor of adjournment those shares they are entitled to
vote that have voted in favor of the proposal. They will vote against any
adjournment those shares that have voted against the proposal. A shareholder
vote may be taken on one or more of the proposals in this proxy statement prior
to adjournment if sufficient votes have been received with respect to that
particular proposal(s), and may adjourn with respect to those proposals for
which sufficient votes have not yet been received.
83
SECTION C -- CAPITALIZATION, OWNERSHIP OF FUND SHARES AND FINANCIAL HIGHLIGHTS
This section contains the following information about the Buying Funds and
Selling Funds (all information is shown for the last fiscal year unless noted
otherwise):
TABLE CONTENT
C-1 Actual and pro forma capitalization of each Selling Fund and each Buying Fund
C-2 Actual and pro forma ownership of Fund shares
C-3 Financial Highlights of each Buying Fund
THE FUNDS' INVESTMENT MANAGER AND DISTRIBUTOR. RiverSource Investments, LLC, 200
Ameriprise Financial Center, Minneapolis, MN 55474, a wholly-owned subsidiary of
Ameriprise Financial, Inc., is the investment manager for each Fund. RiverSource
Fund Distributors, Inc., 50611 Ameriprise Financial Center, Minneapolis, MN
55474, an indirect wholly-owned subsidiary of RiverSource Investments, LLC, is
the distributor for each Fund.
CAPITALIZATION OF SELLING FUNDS AND BUYING FUNDS
The following table shows the capitalization of the Funds as of Sept. 30, 2009
and on a pro forma basis, assuming the proposed Reorganization had taken place.
The pro forma combined net assets are determined by adding the net assets of the
Selling Fund and the net assets of the Buying Fund. The pro forma combined
shares outstanding are determined by dividing the net assets of the Selling Fund
by the net asset value per share of the Buying Fund and adding the actual shares
outstanding of the Buying Fund.
TABLE C-1. ACTUAL AND PRO FORMA CAPITALIZATION OF EACH SELLING FUND AND EACH
BUYING FUND
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
------------------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (ACTUAL)
(SELLING FUND)
Class A $236,660,094 $7.17 33,021,722
Class B 25,030,494 6.82 3,668,474
Class C 1,905,815 6.83 279,134
Class I 83,566,726 7.33 11,397,406
Class R2 91,198 7.15 12,754
Class R3 21,799 7.22 3,018
Class R4 106,518 7.27 14,642
Class R5 4,172 7.29 572
RIVERSOURCE MID CAP GROWTH FUND (ACTUAL) (BUYING FUND)
Class A $587,345,473 $9.08 64,709,871
Class B 53,885,187 7.55 7,132,670
Class C 7,336,436 7.56 970,410
Class I 81,602,766 9.55 8,545,308
Class R4 4,195,423 9.35 448,599
RIVERSOURCE MID CAP GROWTH FUND (PRO FORMA COMBINED)
Class A $824,005,567 $9.08 90,773,758
Class B 78,915,681 7.55 10,447,967
Class C 9,242,251 7.56 1,222,502
Class I 165,169,492 9.55 17,295,751
Class R2* 91,198 9.08 10,044
Class R3* 21,799 9.08 2,401
Class R4 4,301,941 9.35 459,991
Class R5* 4,172 9.55 437
</Table>
*The inception date for Class R2, Class R3 and Class R5 shares of
RiverSource Mid Cap Growth Fund is expected to be in the first quarter of
2010.
84
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
-------------------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SELECT VALUE FUND (ACTUAL) (SELLING
FUND)
Class A $ 196,631,354 $3.81 51,548,994
Class B 33,568,059 3.64 9,223,599
Class C 4,207,113 3.63 1,159,514
Class I 59,616,011 3.88 15,364,806
Class R4 70,132 3.85 18,230
RIVERSOURCE MID CAP VALUE FUND (ACTUAL) (BUYING FUND)
Class A $1,352,356,572 $6.15 220,041,190
Class B 104,445,769 5.90 17,691,820
Class C 41,921,981 5.91 7,097,190
Class I 43,630,761 6.25 6,977,203
Class R4 337,725,175 6.19 54,561,838
RIVERSOURCE MID CAP VALUE FUND (PRO FORMA COMBINED)
Class A $1,548,987,926 $6.15 252,013,768
Class B 138,013,828 5.90 23,381,322
Class C 46,129,094 5.91 7,809,053
Class I 103,246,772 6.25 16,515,765
Class R4 337,795,307 6.19 54,573,168
</Table>
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
------------------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (ACTUAL)
(SELLING FUND)
Class A $120,436,385 $ 4.07 29,570,133
Class B 11,377,587 3.79 3,005,282
Class C 1,466,935 3.78 387,815
Class I 7,142 4.14 1,724
Class R4 2,486,840 4.15 599,940
SELIGMAN SMALLER-CAP VALUE FUND (ACTUAL) (BUYING FUND)
Class A $220,659,514 $11.90 18,539,884
Class B 27,422,715 10.56 2,596,284
Class C 45,734,403 10.57 4,325,329
Class I 5,947,770 12.61 471,820
Class R4 39,334 12.60 3,122
SELIGMAN SMALLER-CAP VALUE FUND (PRO FORMA COMBINED)
Class A $341,095,899 $11.90 28,660,589
Class B 38,800,302 10.56 3,673,707
Class C 47,201,338 10.57 4,464,112
Class I 5,954,912 12.61 472,386
Class R4 2,526,174 12.60 200,490
</Table>
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
-----------------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (ACTUAL)
(SELLING FUND)
Class A $50,265,825 $3.08 16,318,534
Class B 11,699,388 2.84 4,124,434
Class C 2,191,425 2.84 771,732
Class I 40,839,875 3.20 12,765,886
Class R2 2,950 3.10 951
Class R3 2,972 3.13 951
Class R4 135,874 3.13 43,404
Class R5 3,001 3.16 951
</Table>
85
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
-----------------------------------------------------------------------------------------------------------
SELIGMAN FRONTIER FUND (ACTUAL) (BUYING FUND)
Class A $25,336,901 $8.81 2,875,426
Class B 1,249,423 7.09 176,333
Class C 9,769,783 7.12 1,372,140
Class I 1,073,087 9.35 114,806
Class R2 102,981 8.66 11,891
Class R3 5,399 8.67 623
Class R4 5,400 9.34 578
Class R5 692,418 9.35 74,085
SELIGMAN FRONTIER FUND (PRO FORMA COMBINED)
Class A $75,602,726 $8.81 8,580,968
Class B 12,948,811 7.09 1,826,458
Class C 11,961,208 7.12 1,679,924
Class I 41,912,962 9.35 4,482,707
Class R2 105,931 8.66 12,232
Class R3 8,371 8.67 966
Class R4 141,274 9.34 15,126
Class R5 695,419 9.35 74,406
</Table>
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
-----------------------------------------------------------------------------------------------------------
SELIGMAN GLOBAL SMALLER COMPANIES FUND (ACTUAL) (SELLING
FUND)
Class A $51,164,660 $11.55 4,430,791
Class B 1,990,518 9.61 207,121
Class C 24,811,079 9.66 2,569,002
Class R2 1,344,061 11.36 118,347
Class R5 828,271 12.25 67,625
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
(ACTUAL) (BUYING FUND)
Class A $25,974,011 $ 5.17 5,019,180
Class B 4,310,149 4.96 868,177
Class C 481,660 4.96 97,131
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (PRO
FORMA COMBINED)
Class A $77,138,671 $ 5.17 14,915,633
Class B 6,300,667 4.96 1,269,491
Class C 25,292,739 4.96 5,099,365
Class R2* 1,344,061 5.17 259,973
Class R5* 828,271 5.27 157,167
</Table>
*The inception date for Class R2 and Class R5 shares of RiverSource Partners
International Small Cap Fund is expected to be in the first quarter of
2010.
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
------------------------------------------------------------------------------------------------------------
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND (ACTUAL)
(SELLING FUND)
Class A* $ 87,757,216 $1.00 87,789,809
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (ACTUAL) (BUYING
FUND)
Class A $ 95,757,040 $1.00 95,766,154
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (PRO FORMA
COMBINED)
Class A $183,514,256 $1.00 183,523,370
</Table>
*The single class of shares of RiverSource Tax-Exempt Money Market Fund is
referred to as Class A shares.
86
OWNERSHIP OF SELLING FUND AND BUYING FUND SHARES
The following table provides information on shareholders who owned more than 5%
of any class of each Fund's outstanding shares as of Sept. 30, 2009. As of Sept.
30, 2009, officers and directors of each Fund, as a group, owned less than 1% of
the outstanding shares of any class of such Fund.
TABLE C-2. ACTUAL AND PRO FORMA OWNERSHIP OF FUND SHARES
<Table>
<Caption>
PERCENT OF
PERCENT SHARES HELD
OF SHARES FOLLOWING THE
FUND 5% OWNERS HELD REORGANIZATION
-----------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (SELLING FUND)
Class A None N/A N/A
Class B None N/A N/A
Class C None N/A N/A
Class I RiverSource Portfolio Builder Aggressive Fund 16.97% N/A
RiverSource Portfolio Builder Moderate Fund 26.42% N/A
RiverSource Portfolio Builder Moderate Aggressive Fund 31.51% N/A
RiverSource Portfolio Builder Moderate Conservative Fund 6.69% N/A
RiverSource Portfolio Builder Total Equity Fund 16.11% N/A
Class R2 GWFS Equities Inc., Greenwood Village, CO 95.51% N/A
Class R3 MG Trust Company FBO Body Masters, Inc., Denver, CO 53.32% N/A
MG Trust Company FBO Central Jersey Collision, Denver, CO 27.73% N/A
RiverSource Investments, LLC (RiverSource Investments),
Minneapolis, MN 18.95% N/A
Class R4 Charles Schwab & Co. (Charles Schwab), a brokerage firm in San
Francisco, CA 87.70% N/A
Matrix Capital Bank MSCS, Denver CO 6.68% N/A
RiverSource Investments 5.33% N/A
Class R5 RiverSource Investments 100.00% N/A
RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
Class A Charles Schwab 5.65% 4.01%
Class B None N/A N/A
Class C None N/A N/A
Class I RiverSource Portfolio Builder Moderate Aggressive Fund 31.72% 29.78%
RiverSource Portfolio Builder Moderate Fund 26.83% 24.99%
RiverSource Portfolio Builder Aggressive Fund 16.85% 15.84%
RiverSource Portfolio Builder Total Equity Fund 15.95% 15.11%
RiverSource Portfolio Builder Moderate Conservative Fund 6.73% 6.32%
Class R2* GWFS Equities Inc., Greenwood Village, CO N/A 95.51%
Class R3* MG Trust Company FBO Body Masters, Inc., Denver, CO N/A 53.30%
MG Trust Company FBO Central Jersey Collision, Denver, CO N/A 27.72%
RiverSource Investments N/A 18.95%
Class R4 Wachovia Bank NA (Wachovia Bank), Charlotte, NC 85.02% 82.90%
Charles Schwab 7.68% 9.66%
US Bank NA, Milwaukee, WI 5.87% 5.73%
Matrix Capital Bank MSCS, Denver CO N/A 0.17%
RiverSource Investments N/A 0.13%
Class R5* RiverSource Investments N/A 99.96%
</Table>
*Note: Class R2, Class R3 and Class R5 shares are being added to RiverSource
Mid Cap Growth Fund in connection with the Reorganization.
87
<Table>
<Caption>
PERCENT OF
PERCENT SHARES HELD
OF SHARES FOLLOWING THE
FUND 5% OWNERS HELD REORGANIZATION
-----------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SELECT VALUE FUND (SELLING FUND)
Class A Charles Schwab 5.71% N/A
Class B None N/A N/A
Class C None N/A N/A
Class I RiverSource Portfolio Builder Aggressive Fund 17.81% N/A
RiverSource Portfolio Builder Moderate Fund 25.11% N/A
RiverSource Portfolio Builder Moderate Aggressive Fund 30.36% N/A
RiverSource Portfolio Builder Moderate Conservative Fund 6.34% N/A
RiverSource Portfolio Builder Total Equity Fund 18.22% N/A
Class R4 Charles Schwab 87.09% N/A
RiverSource Investments 12.91% N/A
RIVERSOURCE MID CAP VALUE FUND (BUYING FUND)
Class A Charles Schwab 31.31% 28.06%
Prudential Investment Management Services LLC, Newark, NJ 16.09% 14.05%
Class B None N/A N/A
Class C Merrill Lynch, Pierce Fenner & Smith Inc. (MLFP&S),
Jacksonville, FL 17.33% 15.75%
Citigroup Global Markets (Citigroup), Owings Mills, MD 5.75% 5.22%
Class I RiverSource Portfolio Builder Moderate Aggressive Fund 30.08% 30.38%
RiverSource Portfolio Builder Moderate Fund 24.97% 25.17%
RiverSource Portfolio Builder Total Equity Fund 18.17% 18.28%
RiverSource Portfolio Builder Aggressive Fund 18.32% 18.11%
RiverSource Portfolio Builder Moderate Conservative Fund 6.28% 6.35%
Class R4 John Hancock Live Insurance Company, Buffalo, NY 22.98% 22.98%
Wachovia Bank 16.58% 16.58%
ING Life Insurance and Annuity, Hartford, CT 18.64% 18.64%
NFS LLC FEBO FIIOC as Agent for Qualified Employee Benefit Plans 9.80% 9.80%
Charles Schwab N/A 0.02%
RiverSource Investments N/A *
</Table>
*Less than 1%
<Table>
<Caption>
PERCENT OF
PERCENT SHARES HELD
OF SHARES FOLLOWING THE
FUND 5% OWNERS HELD REORGANIZATION
-----------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (SELLING FUND)
Class A Charles Schwab 5.41% N/A
Class B None N/A N/A
Class C None N/A N/A
Class I RiverSource Investments 100.00% N/A
Class R4 Wachovia Bank 94.71% N/A
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND)
Class A MLPF&S 5.19% 3.36%
Charles Schwab N/A 1.91%
Class B None N/A N/A
Class C MLPF&S 33.44% 32.38%
Class I RiverSource Portfolio Builder Total Equity Fund 74.75% 74.68%
RiverSource Portfolio Builder Aggressive Fund 25.11% 25.09%
RiverSource Investments N/A 0.12%
Class R4 Wachovia Bank N/A 93.34%
Charles Schwab 89.04% 1.39%
RiverSource Investments 10.96% 0.17%
</Table>
88
<Table>
<Caption>
PERCENT OF
PERCENT SHARES HELD
OF SHARES FOLLOWING THE
FUND 5% OWNERS HELD REORGANIZATION
-----------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (SELLING FUND)*
Class A Charles Schwab 6.67% N/A
Class B None N/A N/A
Class C None N/A N/A
Class I RiverSource Portfolio Builder Moderate Aggressive Fund 30.91% N/A
RiverSource Portfolio Builder Moderate Fund 25.19% N/A
RiverSource Portfolio Builder Aggressive Fund 18.62% N/A
RiverSource Portfolio Builder Total Equity Fund 16.70% N/A
RiverSource Portfolio Builder Moderate Conservative Fund 6.37% N/A
Class R2 RiverSource Investments 100.00% N/A
Class R3 RiverSource Investments 100.00% N/A
Class R4 Charles Scwab 99.08% N/A
Class R5 RiverSource Investments 100.00% N/A
SELIGMAN FRONTIER FUND (BUYING FUND)*
Class A MLPF&S 9.05% 3.03%
Charles Schwab N/A 4.44%
Class B Citigroup 7.56% 0.72%
State Street Bank and Trust as Custodian, Miami, FL 5.58% 0.54%
Class C MLPF&S 22.33% 18.23%
Class I RiverSource Portfolio Builder Total Equity Fund 99.50% 18.93%
RiverSource Portfolio Builder Moderate Aggressive Fund N/A 30.31%
RiverSource Portfolio Builder Moderate Fund N/A 24.71%
RiverSource Portfolio Builder Aggressive Fund N/A 18.27%
RiverSource Portfolio Builder Moderate Conservative Fund N/A 6.25%
Class R2 MLPF&S 61.35% 59.63%
Frontier Trust Company FBO (Frontier Trust), Fargo, ND 19.13% 18.60%
RiverSource Investments 8.00% 10.56%
Class R3 RiverSource Investments 100.00% 100.00%
Class R4 RiverSource Investments 100.00% 3.82%
Charles Schwab N/A 95.28%
Class R5 Grammar Fisher Foundation, Easton, MD 65.68% 65.43%
Patricks Plain (Patricks Plain), Easton, MD 28.35% 28.24%
RiverSource Investments N/A 0.43%
</Table>
*The combination of RiverSource Investments' initial capital investment
(seed accounts) and RiverSource Portfolio Builder Funds (affiliated "funds-
of-funds"), investment in Class I shares of RiverSource Partners Small Cap
Growth Fund, represents aggregate ownership of 37.71% of the Fund.
RiverSource Investments (investment manager of RiverSource Partners Small
Cap Growth Fund and the funds-of-funds) do not invest in the Fund for the
purposes of exercising control. However, since these ownership interests
may be significant, in excess of 25% of the Fund, such that these entities
may be deemed to control the Fund, procedures have been put in place to
assure that public shareholders determine the outcome of all actions taken
at shareholder meetings. Specifically, RiverSource Investments (which votes
proxies for the seed accounts) and the funds-of-funds' Boards of Directors
(which votes proxies for the funds-of-funds) vote on the proposal in the
same proportion that other shareholders vote on the proposal. If the
Reorganization is approved, RiverSource Investments and the funds-of-funds
will own 27.08% of Seligman Frontier Fund.
<Table>
<Caption>
PERCENT OF
PERCENT SHARES HELD
OF SHARES FOLLOWING THE
FUND 5% OWNERS HELD REORGANIZATION
-------------------------------------------------------------------------------------------------------
SELIGMAN GLOBAL SMALLER COMPANIES FUND (SELLING FUND)
Class A MLPF&S 11.27% N/A
Class B MLPF&S 13.28% N/A
Class C MLPF&S 18.06% N/A
Class R2 Frontier Trust 95.84% N/A
Class R5 Patricks Plain 92.85% N/A
</Table>
89
<Table>
<Caption>
PERCENT OF
PERCENT SHARES HELD
OF SHARES FOLLOWING THE
FUND 5% OWNERS HELD REORGANIZATION
-------------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (BUYING FUND)*
Class A Charles Schwab 9.04% 3.04%
MLPF&S N/A 7.48%
Class B MLPF&S N/A 4.15%
Class C Morgan Stanley & Co., Jersey City, NJ 14.22% 0.27%
MLPF&S N/A 17.72%
Class R2(#) Frontier Trust N/A 96.09%
Class R5(#) Patricks Plain N/A 90.89%
</Table>
*The combination of RiverSource Investments' initial capital investment
(seed accounts) and RiverSource Portfolio Builder Funds (affiliated "funds-
of-funds"), investment in Class I shares of RiverSource Partners
International Small Cap Fund, represents aggregate ownership of 50.76% of
the Fund. RiverSource Investments (investment manager of RiverSource
Partners International Small Cap Fund and the funds-of-funds) do not invest
in the Fund for the purposes of exercising control. However, since these
ownership interests may be significant, in excess of 25% of the Fund, such
that these entities may be deemed to control the Fund, procedures have been
put in place to assure that public shareholders determine the outcome of
all actions taken at shareholder meetings. Specifically, RiverSource
Investments (which votes proxies for the seed accounts) and the funds-of-
funds' Boards of Directors (which votes proxies for the funds-of-funds)
vote on the proposal in the same proportion that other shareholders vote on
the proposal. If the Reorganization is approved, RiverSource Investments
and the funds-of-funds will own 28.80% of RiverSource Partners
International Small Cap Fund.
#Class R2 and Class R5 shares are being added to RiverSource Partners
International Small Cap Fund in connection with the Reorganization.
<Table>
<Caption>
PERCENT OF
PERCENT SHARES HELD
OF SHARES FOLLOWING THE
FUND 5% OWNERS HELD REORGANIZATION
-----------------------------------------------------------------------------------------------------
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND (SELLING FUND)
Class A * Raymond James and Assoc. Inc., Waverly, TN 9.01% N/A
Lawrence Garner, Woodstock, GA and Ronald J. Garner, Wycoff, NJ 8.94% N/A
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (BUYING FUND)
Class A Raymond James and Assoc. Inc., Waverly, TN N/A 4.29%
Lawrence Garner, Woodstock, GA and Ronald J. Garner, Wycoff, NJ N/A 4.26%
</Table>
*The single class of shares of RiverSource Tax-Exempt Money Market Fund is
referred to as Class A shares.
90
FINANCIAL HIGHLIGHTS
THE FINANCIAL HIGHLIGHTS TABLES ARE INTENDED TO HELP YOU UNDERSTAND EACH BUYING
FUNDS' FINANCIAL PERFORMANCE. CERTAIN INFORMATION REFLECTS FINANCIAL RESULTS FOR
A SINGLE BUYING FUND SHARE. FOR RIVERSOURCE MID CAP GROWTH FUND, RIVERSOURCE MID
CAP VALUE FUND AND RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND, FOR
PERIODS ENDED 2007 AND AFTER, AND FOR RIVERSOURCE GOVERNMENT MONEY MARKET FUND,
SELIGMAN FRONTIER FUND AND SELIGMAN SMALLER-CAP VALUE FUND, FOR ALL PERIODS, PER
SHARE NET INVESTMENT INCOME (LOSS) AMOUNTS ARE CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD. THE TOTAL RETURNS IN THE TABLES REPRESENT
THE RATE THAT AN INVESTOR WOULD HAVE EARNED OR LOST ON AN INVESTMENT IN A BUYING
FUND (ASSUMING REINVESTMENT OF ALL DIVIDENDS AND DISTRIBUTIONS, FOR THE PAST 5
YEARS OR, IF SHORTER, FOR THE PERIOD OF THE FUND'S OPERATIONS, IF ANY). TOTAL
RETURNS DO NOT REFLECT PAYMENT OF SALES CHARGES, IF ANY, AND ARE NOT ANNUALIZED
FOR PERIODS OF LESS THAN ONE YEAR. THE INFORMATION FOR RIVERSOURCE MID CAP
GROWTH FUND FOR THE FISCAL YEARS ENDED ON OR AFTER NOV. 30, 2007, RIVERSOURCE
MID CAP VALUE FUND FOR THE FISCAL YEARS ENDED ON OR AFTER SEPT. 30, 2007, AND
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND FOR THE FISCAL YEARS ENDED ON
OR AFTER OCT. 31, 2007 HAS BEEN AUDITED BY ERNST & YOUNG LLP, WHOSE REPORT,
ALONG WITH THE BUYING FUND'S FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS, IS
INCLUDED IN THE BUYING FUND'S MOST RECENT ANNUAL REPORT. THE INFORMATION FOR
PRIOR FISCAL PERIODS FOR THESE FUNDS HAS BEEN AUDITED BY OTHER AUDITORS, AS
INDICATED IN THE TABLES BELOW. THE INFORMATION FOR RIVERSOURCE GOVERNMENT MONEY
MARKET FUND, SELIGMAN FRONTIER FUND AND SELIGMAN SMALLER-CAP VALUE FUND HAS BEEN
AUDITED BY DELOITTE & TOUCHE LLP, WHOSE REPORT, ALONG WITH THE BUYING FUND'S
FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS, IS INCLUDED IN THE BUYING FUND'S
MOST RECENT ANNUAL REPORT. UNAUDITED INFORMATION FOR THE MOST RECENT FISCAL
HALF-YEAR FOR CERTAIN BUYING FUNDS IS ALSO PROVIDED. THE AUDITORS' REPORT,
FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS FOR EACH BUYING FUND ARE AVAILABLE
UPON REQUEST.
TABLE C-3. FINANCIAL HIGHLIGHTS OF EACH BUYING FUND
RiverSource Mid Cap Growth Fund - Class A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Nov. 30, 2009(h) 2008 2007 2006 2005
Net asset value, beginning of period $5.24 $12.32 $14.40 $14.49 $12.64
-------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)(b) (.02)(b) (.05)(b) (.01) (.08)
Net gains (losses) (both realized and unrealized) 2.13 (4.93) 1.62 (.07) 1.93
-------------------------------------------------------------------------------------------------------------
Total from investment operations 2.12 (4.95) 1.57 (.08) 1.85
-------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.36 $5.24 $12.32 $14.40 $14.49
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $455 $349 $852 $1,093 $1,376
-------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 1.45%(e) 1.16% 1.08% 1.09% 1.09%
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.27%)(e) (.05%) (.40%) (.07%) (.57%)
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 76% 87% 45% 27%
-------------------------------------------------------------------------------------------------------------
Total return(f) 40.46%(g) (48.26%) 14.40% (.55%) 14.64%
-------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits in the periods in which they
occurred were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended May 31, 2009 (Unaudited).
91
RiverSource Mid Cap Growth Fund - Class B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Nov. 30, 2009(h) 2008 2007 2006 2005
Net asset value, beginning of period $4.39 $10.74 $13.10 $13.28 $11.68
-------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.03)(b) (.02)(b) (.12)(b) (.12) (.19)
Net gains (losses) (both realized and unrealized) 1.78 (4.20) 1.41 (.05) 1.79
-------------------------------------------------------------------------------------------------------------
Total from investment operations 1.75 (4.22) 1.29 (.17) 1.60
-------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.14 $4.39 $10.74 $13.10 $13.28
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $56 $44 $137 $207 $329
-------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.23%(e) 1.92% 1.84% 1.87% 1.86%
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.05%)(e) (.81%) (1.15%) (.89%) (1.35%)
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 76% 87% 45% 27%
-------------------------------------------------------------------------------------------------------------
Total return(f) 39.86%(g) (48.64%) 13.46% (1.28%) 13.70%
-------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits in the periods in which they
occurred were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended May 31, 2009 (Unaudited).
92
RiverSource Mid Cap Growth Fund - Class C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Nov. 30, 2009(h) 2008 2007 2006 2005
Net asset value, beginning of period $4.39 $10.74 $13.10 $13.28 $11.68
-----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.03)(b) (.02)(b) (.11)(b) (.12) (.18)
Net gains (losses) (both realized and unrealized) 1.78 (4.20) 1.40 (.05) 1.78
-----------------------------------------------------------------------------------------------------------------
Total from investment operations 1.75 (4.22) 1.29 (.17) 1.60
-----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.14 $4.39 $10.74 $13.10 $13.28
-----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $4 $3 $7 $9 $12
-----------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) 2.21%(e) 1.92% 1.84% 1.87% 1.87%
-----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.04%)(e) (.81%) (1.03%) (.87%) (1.35%)
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 76% 87% 45% 27%
-----------------------------------------------------------------------------------------------------------------
Total return(f) 39.86%(g) (48.63%) 13.46% (1.28%) 13.70%
-----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits in the periods in which they
occurred were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Total return does not reflect payment of a sales charge.
(g) Not annualized.
(h) Six months ended May 31, 2009 (Unaudited).
93
RiverSource Mid Cap Growth Fund - Class I
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Nov 30, 2009(g) 2008 2007 2006 2005
Net asset value, beginning of period $5.49 $12.75 $14.73 $14.75 $12.81
-----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .08(b) (.03)(b) .01 (.01)
Net gains (losses) (both realized and unrealized) 2.23 (5.21) 1.70 (.02) 1.95
-----------------------------------------------------------------------------------------------------------------
Total from investment operations 2.24 (5.13) 1.67 (.01) 1.94
-----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.73 $5.49 $12.75 $14.73 $14.75
-----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $74 $53 $54 $-- $43
-----------------------------------------------------------------------------------------------------------------
Total expenses(c),(d) .88%(e) .71% .67% .66% .63%
-----------------------------------------------------------------------------------------------------------------
Net investment income (loss) .29%(e) .39% (.24%) .10% (.09%)
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 76% 87% 45% 27%
-----------------------------------------------------------------------------------------------------------------
Total return 40.80%(f) (48.00%) 14.86% (.07%) 15.14%
-----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits in the periods in which they
occurred were less than 0.01% of average net assets.
(d) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(e) Adjusted to an annual basis.
(f) Not annualized.
(g) Six months ended May 31, 2009 (Unaudited).
94
RiverSource Mid Cap Growth Fund - Class R4
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Nov. 30, 2009(j) 2008 2007 2006 2005
Net asset value, beginning of period $5.39 $12.58 $14.61 $14.67 $12.78
-----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(b),(c) .07(b) (.03)(b) -- (.06)
Net gains (losses) (both realized and unrealized) 2.19 (5.13) 1.65 (.05) 1.95
-----------------------------------------------------------------------------------------------------------------
Total from investment operations 2.19 (5.06) 1.62 (.05) 1.89
-----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.58 $5.39 $12.58 $14.61 $14.67
-----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $3 $3 $7 $29 $203
-----------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 1.18%(f) 1.00% .94% .91% .92%
-----------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.12%(f) .93% .92% .91% .92%
-----------------------------------------------------------------------------------------------------------------
Net investment income (loss) .06%(f) .18% (.25%) (.07%) (.40%)
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 51% 76% 87% 45% 27%
-----------------------------------------------------------------------------------------------------------------
Total return 40.63%(i) (48.11%) 14.56% (.34%) 14.79%
-----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Rounds to zero.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits in the periods in which they
occurred were less than 0.01% of average net assets.
(i) Not annualized.
(j) Six months ended May 31, 2009 (Unaudited).
95
RiverSource Mid Cap Value Fund - Class A
<Table>
<Caption>
PER SHARE DATA
Year ended Sept. 30, 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.14 $10.15 $9.12 $8.56 $6.81
-------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .07 .07 .06 .05 .03
Net gains (losses) (both realized and unrealized) (.59) (2.56) 1.89 1.03 1.80
-------------------------------------------------------------------------------------------------------------
Total from investment operations (.52) (2.49) 1.95 1.08 1.83
-------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.02) (.05) (.05) (.03) (.02)
Distributions from realized gains (.45) (.47) (.87) (.49) (.06)
-------------------------------------------------------------------------------------------------------------
Total distributions (.47) (.52) (.92) (.52) (.08)
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.15 $7.14 $10.15 $9.12 $8.56
-------------------------------------------------------------------------------------------------------------
Total return (4.97%) (25.62%) 22.74% 13.18% 27.06%
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Total expenses 1.19% 1.28% 1.23% 1.33% 1.37%
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.39% .74% .58% .72% .58%
-------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1,351 $1,745 $2,026 $1,443 $782
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 34% 24% 44% 26%
-------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
96
RiverSource Mid Cap Value Fund - Class B
<Table>
<Caption>
PER SHARE DATA
Year ended Sept. 30, 2009 2008 2007 2006 2005
Net asset value, beginning of period $6.90 $9.84 $8.89 $8.38 $6.70
-------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03 (.01) (.02) -- --
Net gains (losses) (both realized and unrealized) (.58) (2.46) 1.84 1.00 1.74
-------------------------------------------------------------------------------------------------------------
Total from investment operations (.55) (2.47) 1.82 1.00 1.74
-------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains (.45) (.47) (.87) (.49) (.06)
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.90 $6.90 $9.84 $8.89 $8.38
-------------------------------------------------------------------------------------------------------------
Total return (5.88%) (26.13%) 21.73% 12.42% 26.12%
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Total expenses 1.96% 2.04% 1.99% 2.10% 2.13%
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) .62% (.07%) (.17%) (.06%) (.20%)
-------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $104 $164 $306 $297 $242
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 34% 24% 44% 26%
-------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
97
RiverSource Mid Cap Value Fund - Class C
<Table>
<Caption>
PER SHARE DATA
Year ended Sept. 30, 2009 2008 2007 2006 2005
Net asset value, beginning of period $6.90 $9.84 $8.89 $8.39 $6.70
-------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .03 .00(b) (.02) -- --
Net gains (losses) (both realized and unrealized) (.57) (2.46) 1.84 .99 1.75
-------------------------------------------------------------------------------------------------------------
Total from investment operations (.54) (2.46) 1.82 .99 1.75
-------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.01) -- -- --
Distributions from realized gains (.45) (.47) (.87) (.49) (.06)
-------------------------------------------------------------------------------------------------------------
Total distributions (.45) (.48) (.87) (.49) (.06)
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.91 $6.90 $9.84 $8.89 $8.39
-------------------------------------------------------------------------------------------------------------
Total return (5.74%) (26.11%) 21.72% 12.29% 26.27%
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Total expenses 1.95% 2.03% 1.98% 2.09% 2.13%
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) .62% .03% (.18%) (.04%) (.19%)
-------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $42 $54 $42 $27 $14
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 34% 24% 44% 26%
-------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
98
RiverSource Mid Cap Value Fund - Class I
<Table>
<Caption>
PER SHARE DATA
Year ended Sept. 30, 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.26 $10.30 $9.24 $8.65 $6.87
-------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .09 .10 .09 .08 .05
Net gains (losses) (both realized and unrealized) (.60) (2.58) 1.92 1.06 1.83
-------------------------------------------------------------------------------------------------------------
Total from investment operations (.51) (2.48) 2.01 1.14 1.88
-------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.05) (.09) (.08) (.06) (.04)
Distributions from realized gains (.45) (.47) (.87) (.49) (.06)
-------------------------------------------------------------------------------------------------------------
Total distributions (.50) (.56) (.95) (.55) (.10)
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.25 $7.26 $10.30 $9.24 $8.65
-------------------------------------------------------------------------------------------------------------
Total return (4.60%) (25.25%) 23.18% 13.71% 27.54%
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Total expenses .67% .85% .80% .89% .89%
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.83% 1.13% .91% 1.16% 1.02%
-------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $44 $16 $29 $18 $12
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 34% 24% 44% 26%
-------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
99
RiverSource Mid Cap Value Fund - Class R4
<Table>
<Caption>
PER SHARE DATA
Year ended Sept. 30, 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.20 $10.22 $9.19 $8.62 $6.85
-------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .08 .08 .07 .07 .03
Net gains (losses) (both realized and unrealized) (.60) (2.56) 1.90 1.04 1.83
-------------------------------------------------------------------------------------------------------------
Total from investment operations (.52) (2.48) 1.97 1.11 1.86
-------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.04) (.07) (.07) (.05) (.03)
Distributions from realized gains (.45) (.47) (.87) (.49) (.06)
-------------------------------------------------------------------------------------------------------------
Total distributions (.49) (.54) (.94) (.54) (.09)
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.19 $7.20 $10.22 $9.19 $8.62
-------------------------------------------------------------------------------------------------------------
Total return (4.91%) (25.41%) 22.81% 13.35% 27.30%
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Total expenses .97% 1.13% 1.10% 1.16% 1.19%
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) 1.55% .96% .68% .96% .75%
-------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $338 $271 $157 $45 $1
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 42% 34% 24% 44% 26%
-------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) Expense ratios include the impact of a performance incentive adjustment, if
any. In addition to the fees and expenses which the Fund bears directly, the
Fund indirectly bears a pro rata share of the fees and expenses of the
acquired funds in which it invests. Such indirect expenses are not included
in the above reported expense ratios.
(b) Rounds to zero.
(c) For the period from Dec. 11, 2006 (inception date) to Sept. 30, 2007.
(d) Annualized.
(e) For the period from Dec. 1, 2006 (inception date) to Sept. 30, 2007.
100
Seligman Smaller-Cap Value Fund - Class A
<Table>
<Caption>
Per share income and capital changes(a)
Fiscal period ended Dec. 31, 2009(i) 2008 2007 2006 2005 2004
Net asset value, beginning of period $9.23 $15.92 $17.67 $15.82 $16.78 $14.30
-----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(b) (.08) (.17) (.21) (.22) (.16) (.07)
Net gains (losses) (both realized and
unrealized) .84 (6.33) 1.43 3.51 (.37) 2.99
-----------------------------------------------------------------------------------------------------------------------
Total from investment operations .76 (6.50) 1.22 3.29 (.53) 2.92
-----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (.19) (2.97) (1.44) (.43) (.44)
-----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.99 $9.23 $15.92 $17.67 $15.82 $16.78
-----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $66 $66 $155 $168 $174 $167
-----------------------------------------------------------------------------------------------------------------------
Total expenses(c) 2.34%(d) 1.89% 1.71% 1.74% 1.76% 1.75%
-----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.76%)(d) (1.30%) (1.17%) (1.27%) (1.01%) (.44%)
-----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 5% 16% 27% 35% 25% 33%
-----------------------------------------------------------------------------------------------------------------------
Total return(e) 8.23%(f),(g) (41.19%) 6.26% 21.38% (3.08%) 20.58%(h)
-----------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
101
Seligman Smaller-Cap Value Fund - Class B
<Table>
<Caption>
Per share income and capital changes(a)
Fiscal period ended Dec. 31, 2009(i) 2008 2007 2006 2005 2004
Net asset value, beginning of period $8.23 $14.34 $16.30 $14.79 $15.84 $13.63
-----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(b) (.10) (.24) (.32) (.32) (.26) (.17)
Net gains (losses) (both realized and
unrealized) .75 (5.68) 1.33 3.27 (.36) 2.82
-----------------------------------------------------------------------------------------------------------------------
Total from investment operations .65 (5.92) 1.01 2.95 (.62) 2.65
-----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (.19) (2.97) (1.44) (.43) (.44)
-----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.88 $8.23 $14.34 $16.30 $14.79 $15.84
-----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $7 $8 $27 $41 $56 $92
-----------------------------------------------------------------------------------------------------------------------
Total expenses(c) 3.11%(d) 2.64% 2.46% 2.48% 2.51% 2.50%
-----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (2.53%)(d) (2.05%) (1.92%) (2.02%) (1.76%) (1.19%)
-----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 5% 16% 27% 35% 25% 33%
-----------------------------------------------------------------------------------------------------------------------
Total return(e) 7.90%(f),(g) (41.68%) 5.47% 20.56% (3.84%) 19.61%(h)
-----------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
102
Seligman Smaller-Cap Value Fund - Class C
<Table>
<Caption>
Per share income and capital changes(a)
Fiscal period ended Dec. 31, 2009(i) 2008 2007 2006 2005 2004
Net asset value, beginning of period $8.24 $14.34 $16.30 $14.80 $15.84 $13.63
-----------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(b) (.10) (.23) (.32) (.32) (.26) (.17)
Net gains (losses) (both realized and
unrealized) .75 (5.68) 1.33 3.26 (.35) 2.82
-----------------------------------------------------------------------------------------------------------------------
Total from investment operations .65 (5.91) 1.01 2.94 (.61) 2.65
-----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (.19) (2.97) (1.44) (.43) (.44)
-----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.89 $8.24 $14.34 $16.30 $14.80 $15.84
-----------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $37 $37 $32 $36 $38 $44
-----------------------------------------------------------------------------------------------------------------------
Total expenses(c) 3.10%(d) 2.63% 2.46% 2.48% 2.51% 2.50%
-----------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (2.52%)(d) (2.05%) (1.92%) (2.02%) (1.76%) (1.19%)
-----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 5% 16% 27% 35% 25% 33%
-----------------------------------------------------------------------------------------------------------------------
Total return(e) 7.89%(f),(g) (41.61%) 5.47% 20.48% (3.78%) 19.61%(h)
-----------------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(d) Adjusted to an annual basis. The Non-Recurring Charges (See Note 3 to the
Financial Statements) have not been annualized, as they represent a one-time
occurrence.
(e) Total return does not reflect payment of a sales charge.
(f) Not annualized.
(g) During the six months ended June 30, 2009, the Fund received its portion of
the proceeds from a regulatory settlement between an unaffiliated third
party and the Securities and Exchange Commission. Had the Fund not received
these proceeds, the total return would have been lower by 0.02%.
(h) Excluding the effect of certain payments received from the Fund's
predecessor investment manager in 2004, total returns would have been as
follows: Class A 20.57%, Class B 19.60% and Class C 19.60%.
(i) Six months ended June 30, 2009 (Unaudited).
103
Seligman Frontier Fund - Class A
<Table>
<Caption>
PER SHARE DATA:
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2009 --------------------------------------------------------
(UNAUDITED) 2008 2007 2006 2005 2004
Net asset value, beginning of period $7.29 $15.63 $14.29 $12.36 $12.17 $11.49
--------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.02) (0.12) (0.21) (0.21) (0.21) (0.21)
Net realized and unrealized gain (loss) on
investments (0.04) (5.93) 3.18 2.64 0.40 0.89
--------------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.06) (6.05) 2.97 2.43 0.19 0.68
--------------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(1) -- 0.12 -- -- -- --
--------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
--------------------------------------------------------------------------------------------------------------------------
Distributions from net realized capital
gain -- (2.41) (1.63) (0.50) -- --
--------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.23 $7.29 $15.63 $14.29 $12.36 $12.17
--------------------------------------------------------------------------------------------------------------------------
Total return (0.82%) (44.19%)(1) 22.93% 20.29% 1.56% 5.92%#
--------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $22,720 $25,209 $52,441 $48,470 $47,699 $61,326
--------------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.97%+ 1.97% 1.90% 1.97% 2.01% 2.06%
--------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (0.62%)+ (1.13%) (1.47%) (1.60%) (1.70%) (1.75%)
--------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62.04% 156.49% 115.96% 91.67% 96.04% 83.73%
--------------------------------------------------------------------------------------------------------------------------
WITHOUT EXPENSE REIMBURSEMENT:O
Ratio of expenses to average net assets 2.55%++ 2.05%
--------------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (1.20%)++ (1.21%)
--------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
104
Seligman Frontier Fund - Class B
<Table>
<Caption>
PER SHARE DATA:
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2009 ----------------------------------------------------
(UNAUDITED) 2008 2007 2006 2005 2004
Net asset value, beginning of period $5.90 $13.22 $12.42 $10.88 $10.80 $10.28
----------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.04) (0.16) (0.27) (0.27) (0.27) (0.27)
Net realized and unrealized gain (loss) on
investments (0.02) (4.85) 2.70 2.31 0.35 0.79
----------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.06) (5.01) 2.43 2.04 0.08 0.52
----------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(1) -- 0.10 -- -- -- --
----------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
----------------------------------------------------------------------------------------------------------------------
Distributions from net realized capital
gain -- (2.41) (1.63) (0.50) -- --
----------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.84 $5.90 $13.22 $12.42 $10.88 $10.80
----------------------------------------------------------------------------------------------------------------------
Total return (1.02%) (44.62%)(1) 21.90% 19.43% 0.74% 5.06%#
----------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $1,070 $1,302 $3,365 $4,264 $7,060 $13,393
----------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.73%+ 2.73% 2.66% 2.73% 2.76% 2.82%
----------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (1.38%)+ (1.89%) (2.23%) (2.36%) (2.45%) (2.51%)
----------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62.04% 156.49% 115.96% 91.67% 96.04% 83.73%
----------------------------------------------------------------------------------------------------------------------
WITHOUT EXPENSE REIMBURSEMENT:O
Ratio of expenses to average net assets 3.31%++ 2.81%
----------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (1.96%)++ (1.97%)
----------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
105
Seligman Frontier Fund - Class C
<Table>
<Caption>
PER SHARE DATA:
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2009 ---------------------------------------------------
(UNAUDITED) 2008 2007 2006 2005 2004
Net asset value, beginning of period $5.93 $13.23 $12.42 $10.89 $10.81 $10.28
---------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.04) (0.15) (0.27) (0.27) (0.27) (0.27)
Net realized and unrealized gain (loss) on
investments (0.03) (4.84) 2.71 2.30 0.35 0.80
---------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.07) (4.99) 2.44 2.03 0.08 0.53
---------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(1) -- 0.10 -- -- -- --
---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
---------------------------------------------------------------------------------------------------------------------
Distributions from net realized capital
gain -- (2.41) (1.63) (0.50) -- --
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.86 $5.93 $13.23 $12.42 $10.89 $10.81
---------------------------------------------------------------------------------------------------------------------
Total return (1.18%) (44.38%)(1) 22.00% 19.31% 0.74% 5.16%#
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $8,816 $9,493 $3,173 $2,505 $2,501 $2,832
---------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.72%+ 2.73% 2.66% 2.73% 2.76% 2.82%
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (1.37%)+ (1.89%) (2.23%) (2.36%) (2.45%) (2.51%)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62.04% 156.49% 115.96% 91.67% 96.04% 83.73%
---------------------------------------------------------------------------------------------------------------------
WITHOUT EXPENSE REIMBURSEMENT:O
Ratio of expenses to average net assets 3.30%++ 2.81%
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (1.95%)++ (1.97%)
---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
106
Seligman Frontier Fund - Class R (currently known as R2)
<Table>
<Caption>
PER SHARE DATA:
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2009 ---------------------------------------------------
(UNAUDITED) 2008 2007 2006 2005 2004
Net asset value, beginning of period $7.18 $15.47 $14.20 $12.30 $12.17 $11.48
---------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.03) (0.14) (0.24) (0.25) (0.25) (0.24)
Net realized and unrealized gain (loss) on
investments (0.03) (5.86) 3.14 2.65 0.38 0.93
---------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.06) (6.00) 2.90 2.40 0.13 0.69
---------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(1) -- 0.12 -- -- -- --
---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
---------------------------------------------------------------------------------------------------------------------
Distributions from net realized capital
gain -- (2.41) (1.63) (0.50) -- --
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.12 $7.18 $15.47 $14.20 $12.30 $12.17
---------------------------------------------------------------------------------------------------------------------
Total return (0.84%) (44.36%)(1) 22.53% 20.14% 1.07% 6.01%#
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $96 $79 $93 $17 $7 $71
---------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 2.23%+ 2.23% 2.15% 2.23% 2.25% 2.32%
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (0.88%)+ (1.39%) (1.72%) (1.86%) (1.94%) (2.01%)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62.04% 156.49% 115.96% 91.67% 96.04% 83.73%
---------------------------------------------------------------------------------------------------------------------
WITHOUT EXPENSE REIMBURSEMENT:O
Ratio of expenses to average net assets 2.81%++ 2.31%
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (1.46%)++ (1.47%)
---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
107
Seligman Frontier Fund - Class I (currently known as R5)
<Table>
<Caption>
PER SHARE DATA:
SIX MONTHS ENDED YEAR ENDED OCTOBER 31,
APRIL 30, 2009 ---------------------------------------------------
(UNAUDITED) 2008 2007 2006 2005 2004
Net asset value, beginning of period $7.71 $16.30 $14.76 $12.67 $12.39 $11.62
---------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) FROM INVESTMENT OPERATIONS:
Net investment loss (0.01) (0.06) (0.13) (0.13) (0.13) (0.13)
Net realized and unrealized gain (loss) on
investments (0.03) (6.24) 3.30 2.72 0.41 0.90
---------------------------------------------------------------------------------------------------------------------
Total from investment operations (0.04) (6.30) 3.17 2.59 0.28 0.77
---------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(1) -- 0.12 -- -- -- --
---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
---------------------------------------------------------------------------------------------------------------------
Distributions from net realized capital
gain -- (2.41) (1.63) (0.50) -- --
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.67 $7.71 $16.30 $14.76 $12.67 $12.39
---------------------------------------------------------------------------------------------------------------------
Total return (0.52%) (43.87%)(1) 23.62% 21.08% 2.26% 6.63%#
---------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000s omitted) $2,218 $3,229 $5,467 $4,439 $3,913 $4,497
---------------------------------------------------------------------------------------------------------------------
Ratio of expenses to average net assets 1.73%+ 1.39% 1.29% 1.33% 1.33% 1.34%
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (0.38%)+ (0.55%) (0.86%) (0.96%) (1.02%) (1.03%)
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 62.04% 156.49% 115.96% 91.67% 96.04% 83.73%
---------------------------------------------------------------------------------------------------------------------
WITHOUT EXPENSE REIMBURSEMENT:O
Ratio of expenses to average net assets 1.73%++
---------------------------------------------------------------------------------------------------------------------
Ratio of net investment loss to average
net assets (0.38%)++
---------------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
+ Annualized.
++ Annualized except for the Non-Recurring Charges which have not been
annualized as they represent a one-time occurrence.
o The Manager reimbursed certain expenses for the period presented.
# Excluding the effect of certain payments received from the Manager in 2004,
total returns for Classes A, B, C, R2 (formerly Class R), and R5 (formerly
Class I) would have been 5.85%, 4.99%, 5.09%, 5.94% and 6.56% respectively.
1 In June 2008, the Fund received its portion of the proceeds from a
regulatory settlement between an unaffiliated third party and the SEC.
Excluding the effect of this item, total return for Class A, B, C, R2
(formerly Class R), and R5 (formerly Class I) would have been (44.93%),
(45.33%), (45.10%), (45.10%) and (44.62%) respectively.
108
RiverSource Partners International Small Cap Fund - Class A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2009(k) 2008 2007 2006 2005
Net asset value, beginning of period $3.82 $10.29 $9.35 $8.81 $7.90
----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .01(b) .04(b) .02(b) .02 .03
Net gains (losses) (both realized and unrealized) (.06) (5.43) 2.92 1.58 1.32
----------------------------------------------------------------------------------------------------------------
Total from investment operations (.05) (5.39) 2.94 1.60 1.35
----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.16) (.13) (.09) --
Distributions from realized gains -- (.92) (1.87) (.97) (.44)
Tax return of capital -- (.00)(c) -- -- --
----------------------------------------------------------------------------------------------------------------
Total distributions -- (1.08) (2.00) (1.06) (.44)
----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.77 $3.82 $10.29 $9.35 $8.81
----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $20 $27 $91 $67 $66
----------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 2.62%(f) 1.97% 1.90% 1.83% 1.99%
----------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 1.68%(f) 1.72% 1.82% 1.81% 1.94%
----------------------------------------------------------------------------------------------------------------
Net investment income (loss) .71%(f) .60% .22% .25% .40%
----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 87% 96% 157% 80%
----------------------------------------------------------------------------------------------------------------
Total return(i) (1.31%)(j) (57.59%) 37.16% 19.71% 17.70%
----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Rounds to zero.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits in the periods in which they
occurred were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2009 (Unaudited).
109
RiverSource Partners International Small Cap Fund - Class B
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2009(k) 2008 2007 2006 2005
Net asset value, beginning of period $3.69 $9.96 $9.11 $8.60 $7.78
----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(b),(c) (.01)(b) (.05)(b) -- (.03)
Net gains (losses) (both realized and unrealized) (.06) (5.26) 2.83 1.51 1.29
----------------------------------------------------------------------------------------------------------------
Total from investment operations (.06) (5.27) 2.78 1.51 1.26
----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.08) (.06) (.03) --
Distributions from realized gains -- (.92) (1.87) (.97) (.44)
Tax return of capital -- (.00)(c) -- -- --
----------------------------------------------------------------------------------------------------------------
Total distributions -- (1.00) (1.93) (1.00) (.44)
----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.63 $3.69 $9.96 $9.11 $8.60
----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $4 $5 $19 $17 $17
----------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 3.41%(f) 2.73% 2.65% 2.60% 2.75%
----------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 2.45%(f) 2.48% 2.58% 2.58% 2.71%
----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.04%)(f) (.19%) (.54%) (.50%) (.33%)
----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 87% 96% 157% 80%
----------------------------------------------------------------------------------------------------------------
Total return(i) (1.63%)(j) (57.91%) 35.94% 18.92% 16.77%
----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Rounds to zero.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits in the periods in which they
occurred were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2009 (Unaudited).
110
RiverSource Partners International Small Cap Fund - Class C
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Oct. 31, 2009(k) 2008 2007 2006 2005
Net asset value, beginning of period $3.69 $9.97 $9.12 $8.62 $7.80
----------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) .00(b),(c) (.01)(b) (.05)(b) -- (.03)
Net gains (losses) (both realized and unrealized) (.07) (5.25) 2.84 1.51 1.29
----------------------------------------------------------------------------------------------------------------
Total from investment operations (.07) (5.26) 2.79 1.51 1.26
----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income -- (.10) (.07) (.04) --
Distributions from realized gains -- (.92) (1.87) (.97) (.44)
Tax return of capital -- (.00)(c) -- -- --
----------------------------------------------------------------------------------------------------------------
Total distributions -- (1.02) (1.94) (1.01) (.44)
----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $3.62 $3.69 $9.97 $9.12 $8.62
----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $1 $1 $1
----------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(d),(e) 3.39%(f) 2.73% 2.66% 2.61% 2.77%
----------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e),(g),(h) 2.44%(f) 2.48% 2.58% 2.59% 2.71%
----------------------------------------------------------------------------------------------------------------
Net investment income (loss) .00%(c),(f) (.18%) (.54%) (.56%) (.34%)
----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 57% 87% 96% 157% 80%
----------------------------------------------------------------------------------------------------------------
Total return(i) (1.90%)(j) (57.87%) 36.02% 18.90% 16.73%
----------------------------------------------------------------------------------------------------------------
</Table>
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Rounds to zero.
(d) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances.
(e) In addition to the fees and expenses which the Fund bears directly, the Fund
indirectly bears a pro rata share of the fees and expenses of the acquired
funds in which it invests. Such indirect expenses are not included in the
above reported expense ratios.
(f) Adjusted to an annual basis.
(g) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of acquired funds),
before giving effect to any performance incentive adjustment.
(h) Includes the impact of a performance incentive adjustment, if any. Expense
ratio is before reduction for earnings and bank fee credits on cash
balances. Earnings and bank fee credits in the periods in which they
occurred were less than 0.01% of average net assets.
(i) Total return does not reflect payment of a sales charge.
(j) Not annualized.
(k) Six months ended April 30, 2009 (Unaudited).
111
RiverSource Government Money Market Fund - Class A
<Table>
<Caption>
PER SHARE INCOME AND CAPITAL CHANGES(a)
Fiscal period ended Dec. 31, 2009(h) 2008 2007 2006 2005 2004
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss)(b) .00(c) .01 .04 .04 .02 .00(c)
------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Dividends from net investment income (.00)(c) (.01)(d) (.04) (.04) (.02) (.00)(c)
------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS/SUPPLEMENTAL DATA
Net assets, end of period (in millions) $108 $124 $133 $124 $133 $143
------------------------------------------------------------------------------------------------------------------
Gross expenses prior to expense
waiver/reimbursement(e) 1.25%(f) .91% .86% .90% .86% .85%
------------------------------------------------------------------------------------------------------------------
Net expenses after expense
waiver/reimbursement(e) .39%(f) .79% .86% .90% .86% .84%
------------------------------------------------------------------------------------------------------------------
Net investment income (loss) .06%(f) 1.07% 4.03% 3.86% 2.15% .40%
------------------------------------------------------------------------------------------------------------------
Total return .02%(g) 1.12% 4.09% 3.95% 2.20% .43%
------------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) For a share outstanding throughout the period. Rounded to the nearest cent.
(b) Per share amounts have been calculated using the average shares outstanding
method.
(c) Rounds to zero.
(d) In addition, the Fund paid a short-term capital gain distribution of
$0.000146 on July 25, 2008.
(e) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses.
(f) Adjusted to an annual basis. The Non-Recurring Charges have been annualized,
as they represent a one-time occurrence.
(g) Not annualized.
(h) Six months ended June 30, 2009 (Unaudited).
112
EXHIBIT A
FORM OF AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization dated as of November , 2009 (the
"Agreement") is between each selling entity identified in Schedule A hereto
(each a "Selling Corporation")(1), on behalf of each series thereof identified
in Schedule A hereto as a Selling Fund (each a "Selling Fund"), each
corresponding buying entity identified in Schedule A hereto (each a "Buying
Corporation")(2), on behalf of each series thereof identified in Schedule A
hereto as the corresponding Buying Fund (each a "Buying Fund"), and RiverSource
Investments, LLC (solely for the purposes of Sections 3c and 11 of the
Agreement).
This Agreement shall be treated for all purposes as if each reorganization
between a Selling Fund and its corresponding Buying Fund contemplated hereby had
been the subject of a separate agreement. As context requires a Buying
Corporation that is not organized as a series fund and that may not be
considered or meet the definition of "Buying Fund" as set forth above, may be
referred to as a "Buying Fund," for purposes of this Agreement.
In consideration of their mutual promises, the parties agree as follows:
1. SHAREHOLDER APPROVAL. Each Selling Fund will call a meeting of its
shareholders for the purpose of approving the Agreement and the transactions
it contemplates (each a "Reorganization"). Each Buying Fund agrees to
furnish data and information, as reasonably requested, for the proxy
statement to be furnished to shareholders of the corresponding Selling Fund.
2. REORGANIZATION.
a. Plan of Reorganization. Each Reorganization will be a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code of 1986,
as amended (the "Code"). At the Closing, each Selling Corporation will
convey all of the assets of each Selling Fund to the corresponding Buying
Fund. Each Buying Fund will assume all liabilities of the corresponding
Selling Fund. At the Closing, each Buying Corporation will deliver shares
of each Buying Fund, including fractional shares, to the corresponding
Selling Corporation on behalf of the corresponding Selling Fund. The
number of shares will be determined by dividing the value of the net
assets attributable to each class of shares of each Selling Fund, computed
as described in paragraph 3(a), by the net asset value of one share of the
corresponding class of the corresponding Buying Fund, computed as
described in paragraph 3(b). Each Selling Fund will not pay a sales charge
on the receipt of the corresponding Buying Fund's shares in exchange for
the assets of such Selling Fund. In addition, the shareholders of each
Selling Fund will not pay a sales charge on distribution to them of shares
of the corresponding Buying Fund.
b. Closing and Effective Time of the Reorganization. The Reorganization and
all related acts necessary to complete the Reorganization (the "Closing")
will occur on the first day on which the New York Stock Exchange (the
"NYSE") is open for business following approval of shareholders of each
Selling Fund and receipt of all necessary regulatory approvals, or such
later date as the officers of the Selling Corporation and Buying
Corporation may agree.
3. VALUATION OF NET ASSETS.
a. The net asset value of each Selling Fund will be computed as of the close
of regular trading on the NYSE on the business day immediately preceding
the day of Closing (the "Valuation Date") using the valuation procedures
set forth in the corresponding Buying Fund's then current prospectus.
b. The net asset value per share of shares of each Buying Fund will be
determined as of the close of regular trading on the NYSE on the Valuation
Date, using the valuation procedures set forth in each Buying Fund's then
current prospectus.
c. At the Closing, each Selling Fund will provide the corresponding Buying
Fund with a copy of the computation showing the valuation of the net asset
value per share of such Selling Fund on the Valuation Date, and each
Buying Fund will provide the corresponding Selling Fund with a copy of the
computation showing the determination of the net asset value per share of
such Buying Fund on the Valuation Date. Both computations will be
certified by an officer of RiverSource Investments, LLC, the investment
manager.
----------
(1) The Selling Corporation for the Reorganization of RiverSource Partners
Aggressive Growth Fund, RiverSource Partners Select Value Fund, RiverSource
Partners Small Cap Equity Fund, RiverSource Partners Small Cap Growth Fund
and RiverSource Tax-Exempt Money Market Fund is a Minnesota Corporation and
the Selling Corporation for the Reorganization of Seligman Global Smaller
Companies Fund is a Maryland Corporation.
(2) The Buying Corporation for each Buying Fund, RiverSource Mid Cap Growth
Fund, RiverSource Mid Cap Value Fund and RiverSource Partners International
Small Cap Fund is a Minnesota Corporation, and the Buying Corporation for
each Buying Fund, RiverSource Government Money Market Fund, Inc., Seligman
Frontier Fund, Inc. and Seligman Smaller-Cap Value Fund is a Maryland
Corporation.
A.1
4. LIQUIDATION AND DISSOLUTION OF THE SELLING FUND.
a. On the date of the Closing, each Selling Corporation will liquidate each
Selling Fund and distribute shares of each class of the corresponding
Buying Fund to the shareholders of record of such Selling Fund's
corresponding class. Each Buying Fund will establish shareholder accounts
in the names of each corresponding Selling Fund shareholder, representing
the respective pro rata number of full and fractional shares of such class
of the Buying Fund due to each such shareholder. All issued and
outstanding shares of each Selling Fund will simultaneously be cancelled
on the books of each Selling Corporation. Each Buying Fund or its transfer
agent will establish shareholder accounts in accordance with instructions
from the corresponding Selling Corporation.
b. Immediately after the close of business on the Valuation Date, the share
transfer books of each Selling Corporation relating to each Selling Fund
will be closed and no further transfer of shares will be made.
c. Promptly after the Closing, each Buying Fund or its transfer agent will
notify each shareholder of the corresponding Selling Fund of the number of
shares distributed to the shareholder and confirm the registration in the
shareholder's name.
d. As promptly as practicable after the Closing, and in no event later than
twelve months from the date of the Closing, each Selling Fund will be
dissolved.
5. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE BUYING CORPORATION.
With respect to each Reorganization, each Buying Corporation represents and
warrants to the corresponding Selling Fund as follows:
a. Organization, Existence, etc. Each Buying Corporation is a corporation
duly organized, validly existing and in good standing under the laws of
the state of Maryland or Minnesota and has the power to carry on its
business as it is now being conducted.
b. Registration as Investment Company. Each Buying Corporation, or in the
case of separate series funds, the Buying Corporation, of which the Buying
Fund is a series, is registered under the Investment Company Act of 1940
(the "1940 Act") as an open-end, management investment company.
c. Capitalization. Each Buying Corporation for the Buying Fund, RiverSource
Mid Cap Growth Fund, RiverSource Mid Cap Value Fund and RiverSource
Partners International Small Cap Fund has authorized capital of
10,000,000,000 shares of common stock, par value $0.01 per share that can
be allocated among the separate series as designated by the Corporation's
Board of Directors. The Buying Corporation for Seligman Smaller-Cap Value
Fund has authorized capital of 2,000,000,000 shares of common stock, par
value of $0.001 per share, of which 1,000,000,000 are authorized for
Seligman Smaller-Cap Value Fund. The Buying Corporation RiverSource
Government Money Market Fund, Inc. has authorized capital of 1,400,000,000
shares of common stock, par value of $0.01 per share. The Buying
Corporation Seligman Frontier Fund, Inc. has authorized capital of
500,000,000 shares of common stock, par value of $0.10 per share. All of
the outstanding shares of each Buying Corporation have been duly
authorized and are validly issued, fully paid and non-assessable. Since
each Buying Fund is engaged in the continuous offering and redemption of
its shares, the number of outstanding shares may vary daily.
d. Financial Statements. Each Buying Fund's audited financial statements as
of the end of the last fiscal year, and the subsequent unaudited semi-
annual financial statements, if any (the "Buying Fund Financial
Statements"), fairly present the financial position of the Buying Fund and
the results of its operations and changes in its net assets for the
periods shown.
e. Shares to be Issued Upon Reorganization. The shares to be issued in
connection with the Reorganization will be duly authorized and, at the
time of the Closing, will be validly issued, fully paid and non-
assessable.
f. Authority Relative to the Agreement. Each Buying Corporation has the power
to enter into and carry out the obligations described in this Agreement.
The Agreement and the transactions contemplated by it have been duly
authorized by the Board of Directors of each Buying Corporation and no
other proceedings by any of the Buying Corporation or the Buying Funds are
necessary.
g. No Violation. The Buying Corporation is not in violation of its Articles
of Incorporation or By-Laws (the "Articles") or in default in the
performance of any material agreement to which it is a party. The
execution of this Agreement and the completion of the transactions
contemplated by it will not conflict with, or constitute a breach of, any
material contract or other instrument to which each Buying Fund is
subject. The transactions will not result in any violation of the
provisions of the Articles or any law, administrative regulation or
administrative or court decree applicable to the Buying Funds.
A.2
h. Liabilities. The Buying Funds have no known liabilities of a material
amount, contingent or otherwise, other than liabilities disclosed in each
Buying Fund's Financial Statements, liabilities incurred in the ordinary
course of business subsequent to the date of the latest annual or semi-
annual financial statements, or liabilities previously disclosed to the
corresponding Selling Fund.
i. Litigation. There is no litigation, administrative proceeding or
investigation before any court or governmental body currently pending or,
to the knowledge of the Buying Funds, threatened, that would materially
and adversely affect the Buying Funds, their financial condition or the
conduct of their business, or that would prevent or hinder completion of
the transactions contemplated by this Agreement. The Buying Funds know of
no facts that might form the basis for the institution of any such
litigation, proceeding or investigation and the Buying Funds are not a
party to or subject to the provisions of any order, decree or judgment.
j. Contracts. Except for contracts and agreements previously disclosed to the
Selling Corporation, the Buying Funds are not a party to or subject to any
material contract, debt instrument, plan, lease, franchise, license or
permit.
k. Regulated Investment Company Qualification. Each Buying Fund has qualified
and met the requirements for treatment as a "regulated investment company"
within the meaning of Section 851 of the Code with respect to each taxable
year since commencement of its operations and will continue to meet such
requirements and to so qualify at all times through the Closing.
l. Taxes. As of the Closing, each Buying Fund will (i) have filed all federal
and other tax returns and reports that have been required to be filed,
(ii) have paid or provided for payment of all federal and other taxes
shown to be due on such returns or on any assessments received, (iii) have
adequately provided for all tax liabilities on its books, (iv) except as
disclosed to the Selling Fund, not have had any tax deficiency or
liability asserted against it or question with respect thereto raised, and
(v) except as disclosed to the Selling Fund, not be under audit by the
Internal Revenue Service or by any state or local tax authority for taxes
in excess of those already paid.
m. Registration Statement. Each Buying Fund will file a registration
statement on Form N-14 (the "Registration Statement") with the Securities
and Exchange Commission under the Securities Act of 1933 (the "1933 Act")
relating to the shares to be issued in the Reorganization. At the time the
Registration Statement becomes effective, at the time of the shareholders'
meeting described in paragraph 1 and at the Closing, the Registration
Statement will not contain an untrue statement of a material fact or omit
to state a material fact necessary to make the statements therein not
misleading. However, none of the representations and warranties in this
subsection apply to statements in, or omissions from, the Registration
Statement made in reliance on information furnished by the Selling Fund
for use in the Registration Statement.
n. Business Activities. Each Buying Fund will operate its business in the
ordinary course between the date hereof and the date of the Closing, it
being understood that such ordinary course of business will include
regular and customary periodic dividends and distributions and any other
distribution that may be advisable.
6. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE SELLING CORPORATION.
With respect to each Reorganization, the Selling Corporation represents and
warrants to each Buying Fund as follows:
a. Organization, Existence, etc. Each Selling Corporation is a corporation
duly organized, validly existing and in good standing under the laws of
the state of Minnesota or Maryland and has the power to carry on its
business as it is now being conducted.
b. Registration as Investment Company. Each Selling Corporation, or in the
case of a separate series funds, the Selling Corporation, of which the
Selling Fund is a series, is registered under the 1940 Act as an open-end,
management investment company.
c. Capitalization. Each Selling Corporation for the Selling Fund, RiverSource
Partners Aggressive Growth Fund, RiverSource Partners Select Value Fund,
RiverSource Partners Small Cap Equity Fund, RiverSource Partners Small Cap
Growth Fund and RiverSource Tax-Exempt Money Market Fund, has authorized
capital of 10,000,000,000 shares of common stock, par value $0.01 per
share that can be allocated among the separate series as designated by the
Corporation's Board of Directors. The Selling Corporation for the Selling
Fund, Seligman Global Smaller Companies Fund has authorized capital of
2,000,000,000 shares of common stock, par value $0.001 per share, of which
400,000,000 are authorized for Seligman Global Smaller Companies Fund. All
of the outstanding shares have been duly authorized and are validly
issued, fully paid and nonassessable. Since each Selling Fund is engaged
in the continuous offering and redemption of its shares, the number of
outstanding shares may vary daily.
d. Financial Statements. Each Selling Fund's audited financial statements as
of the end of the last fiscal year, and the subsequent unaudited semi-
annual financial statements, if any (the "Selling Fund Financial
Statements"), fairly present
A.3
the financial position of the Selling Fund, and the results of its
operations and changes in its net assets for the periods shown.
e. Authority Relative to the Agreement. Each Selling Corporation has the
power to enter into and to carry out its obligations under this Agreement.
The Agreement and the transactions contemplated by it have been duly
authorized by the Board of Directors of each Selling Corporation and no
other proceedings by the Selling Corporations or the Selling Funds are
necessary, other than the approval of shareholders contemplated in
paragraph 1.
f. No Violation. Each Selling Corporation is not in violation of its Articles
or in default in the performance of any material agreement to which it is
a party or in default in the performance of any material agreement to
which it is a party). The execution of this Agreement and the completion
of the transactions contemplated by it will not conflict with or
constitute a breach of, any material contract to which the Selling Funds
are subject. The transactions will not result in any violation of the
provisions of the Articles, as the case may be, or any law, administrative
regulation or administrative or court decree applicable to the Selling
Funds.
g. Liabilities. The Selling Funds have no known liabilities of a material
amount, contingent or otherwise, other than liabilities disclosed in the
Selling Fund Financial Statements, liabilities incurred in the ordinary
course of business subsequent to the date of the latest annual or semi-
annual financial statements, or liabilities previously disclosed to each
Buying Fund.
h. Litigation. There is no litigation, administrative proceeding or
investigation before any court or governmental body currently pending or,
to the knowledge of the Selling Funds, threatened, that would materially
and adversely affect the Selling Funds, their financial condition or the
conduct of their business, or that would prevent or hinder completion of
the transactions contemplated by this Agreement. Each Selling Fund knows
of no facts that might form the basis for the institution of any such
litigation, proceeding or investigation and is not a party to or subject
to the provisions of any order, decree or judgment.
i. Contracts. Except for contracts and agreements previously disclosed to the
Buying Corporations, each Selling Fund is not a party to or subject to any
material contract, debt instrument, plan, lease, franchise, license or
permit.
j. Regulated Investment Company Qualification. Each Selling Fund has
qualified and met the requirements for treatment as a "regulated
investment company" within the meaning of Section 851 of the Code with
respect to each taxable year since commencement of its operations and will
continue to meet such requirements and to so qualify at all times through
the Closing.
k. Taxes. As of the Closing, each Selling Fund will (i) have filed all
federal and other tax returns and reports that have been required to be
filed, (ii) have paid or provided for payment of all federal and other
taxes shown to be due on such returns or on any assessments received,
(iii) have adequately provided for all tax liabilities on its books, (iv)
except as disclosed to the corresponding Buying Fund, not have had any tax
deficiency or liability asserted against it or question with respect
thereto raised, and (v) except as disclosed to the corresponding Buying
Fund, not be under audit by the Internal Revenue Service or by any state
or local tax authority for taxes in excess of those already paid.
l. Fund Securities. All securities listed in the schedule of investments of
each Selling Fund as of the Closing will be owned by each Selling Fund
free and clear of any encumbrances, except as indicated in the schedule.
m. Registration Statement. The Selling Funds will cooperate with the Buying
Funds and will furnish information relating to the Selling Corporations
and the Selling Funds required in the Registration Statement. At the time
the Registration Statement becomes effective, at the time of the
shareholders' meeting described in paragraph 1 and at the Closing, the
Registration Statement, as it relates to the Selling Corporations or the
Selling Funds, will not contain an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein not
misleading. However, the representations and warranties in this subsection
apply only to statements in or omissions from the Registration Statement
made in reliance upon information furnished by the Selling Corporations or
the Selling Funds for use in the Registration Statement.
n. Provision of Books and Records. Each Selling Fund will provide its books
and records to the corresponding Buying Fund for purposes of preparing any
tax returns required by law to be filed after the Closing date, including
(1) the tax return for the period ending on the Closing date, and (2) the
tax return for the period beginning the day after the Closing and ending
the earlier of the current fiscal year-end of the corresponding Buying
Fund and the taxable year end chosen by the corresponding Buying Fund
following the Reorganization.
o. Business Activities. Each Selling Fund will operate its business in the
ordinary course between the date hereof and the date of the Closing, it
being understood that such ordinary course of business will include
regular and customary periodic dividends and distributions and any other
distribution that may be advisable.
A.4
7. CONDITIONS TO OBLIGATIONS OF THE BUYING CORPORATION. The obligations of each
Buying Corporation with respect to each Reorganization are subject to the
satisfaction of the following conditions:
a. Shareholder Approval. For RiverSource Partners Aggressive Growth Fund,
RiverSource Partners Select Value Fund, RiverSource Partners Small Cap
Equity Fund, RiverSource Partners Small Cap Growth Fund and RiverSource
Tax-Exempt Money Market Fund this Agreement will have been approved by the
affirmative vote of the holders of the majority of the voting power of all
Selling Fund shares entitled to vote and for Seligman Global Smaller
Companies Fund this Agreement will have been approved by the affirmative
vote of a majority of the outstanding voting securities of the Selling
Fund. A vote of a majority of the outstanding voting securities of the
Selling Fund is defined in 1940 Act as a vote of the lesser of (a) 67% or
more of the shares of the Selling Fund that are present or represented by
proxy at the Meeting, if more than 50% of the outstanding shares are
present in person or by proxy at the Meeting; or (b) more than 50% of the
outstanding shares of the Selling Fund.
b. Representations, Warranties and Agreements. Each Selling Corporation and
the Selling Funds will have complied with this Agreement and each of the
representations and warranties in this Agreement will be true in all
material respects as of the date of the Closing. An officer of each
Selling Corporation will provide a certificate to each Buying Fund
confirming that, as of the Closing, the representations and warranties set
forth in Section 6 are true and correct and that there have been no
material adverse changes in the financial condition, results of
operations, business, properties or assets of the corresponding Selling
Fund since the date of its last financial statement, except as otherwise
indicated in any financial statements, certified by an officer of the
Selling Corporation, and delivered to such Buying Fund on the date of the
Closing.
c. Regulatory Approvals.
- The Registration Statement referred to in Sections 5(m) and 6(m) will be
effective and no stop orders under the 1933 Act will have been issued.
- All necessary approvals, consents and exemptions from federal and state
regulatory authorities will have been obtained.
d. Opinion of Counsel. Each Buying Corporation will have received an opinion
of counsel for the Selling Corporation, dated as of the date of the
Closing, to the effect that: (i) the Selling Corporations for RiverSource
Partners Aggressive Growth Fund, RiverSource Partners Select Value Fund,
RiverSource Partners Small Cap Equity Fund, RiverSource Partners Small Cap
Growth Fund and RiverSource Tax-Exempt Money Market Fund are corporations
duly organized and validly existing under the laws of the state of
Minnesota; the Selling Corporation for Seligman Global Smaller Companies
Fund is a corporation duly organized and validly existing under the laws
of the state of Maryland; (ii) each Selling Fund is a series of the
Selling Corporation, an open-end management investment company registered
under the 1940 Act, as applicable; (iii) this Agreement and the
Reorganization has been duly authorized and approved by all requisite
action of the Selling Corporations and each Selling Fund and this
Agreement has been duly executed by, and is a valid and binding obligation
of, each Selling Corporation.
e. Declaration of Dividend. Each Selling Fund will have declared, prior to
the Closing, a dividend or dividends, which, together with all previous
such dividends, shall have the effect of distributing to the Selling
Funds' shareholders (i) all of the excess of (x) the Selling Funds'
investment income excludable from gross income under Section 103 of the
Code over (y) the Selling Funds' deductions disallowed under Sections 265
and 171 of the Code, (ii) all of the Selling Funds' investment company
taxable income as defined in Section 852 of the Code (in each case
computed without regard to any deduction for dividends paid) and (iii) all
of the Selling Funds' net capital gain realized (after reduction for any
capital loss carryover), in each case for the current taxable year (which
will end on the Closing date) and any preceding taxable years for which
such a dividend is eligible to be made under Section 855 of the Code.
8. CONDITIONS TO OBLIGATIONS OF THE SELLING CORPORATION. The obligations of the
Selling Corporation with respect to each Reorganization are subject to the
satisfaction of the following conditions:
a. Shareholder Approval. For RiverSource Partners Aggressive Growth Fund,
RiverSource Partners Select Value Fund, RiverSource Partners Small Cap
Equity Fund, RiverSource Partners Small Cap Growth Fund and RiverSource
Tax-Exempt Money Market Fund this Agreement will have been approved by the
affirmative vote of the holders of the majority of the voting power of all
Selling Fund shares entitled to vote and for Seligman Global Smaller
Companies Fund this Agreement will have been approved by the affirmative
vote of a majority of the outstanding voting securities of the Selling
Fund. A vote of a majority of the outstanding voting securities of the
Selling Fund is defined in 1940 Act as a vote of the lesser of (a) 67% or
more of the shares of the Selling Fund that are present or represented by
proxy at the Meeting, if more than 50% of the outstanding shares are
present in person or by proxy at the Meeting; or (b) more than 50% of the
outstanding shares of the Selling Fund.
A.5
b. Representations, Warranties and Agreements. Each Buying Fund will have
complied with this Agreement and each of the representations and
warranties in this Agreement will be true in all material respects as of
the date of the Closing. An officer of each Buying Corporation will
provide a certificate to each Selling Fund confirming that, as of the
Closing, the representations and warranties set forth in Section 5 are
true and correct and that there have been no material adverse changes in
the financial condition, results of operations, business, properties or
assets of the corresponding Buying Fund since the date of its last
financial statement, except as otherwise indicated in any financial
statements, certified by an officer of each Buying Corporation, and
delivered to such Selling Fund on or prior to the last business day before
the Closing.
c. Regulatory Approvals.
- The Registration Statement referred to in Sections 5(m) and 6(m) will be
effective and no stop orders under the 1933 Act will have been issued.
- All necessary approvals, consents and exemptions from federal and state
regulatory authorities will have been obtained.
d. Opinion of Counsel. Each Selling Corporation will have received the
opinion of counsel for the Buying Corporation, dated as of the date of the
Closing, to the effect that: (i) the Buying Corporations for RiverSource
Mid Cap Growth Fund, RiverSource Mid Cap Value Fund and RiverSource
Partners International Small Cap Fund are corporations duly organized and
validly existing under the laws of the state of Minnesota; the Buying
Corporations for RiverSource Government Money Market Fund, Inc., Seligman
Frontier Fund, Inc. and Seligman Smaller-Cap Value Fund, are corporations
duly organized and validly existing under the laws of the state of
Maryland; (ii) each Buying Corporation, or in the case of separate series
funds, the Buying Corporation of which the Buying Fund is a series of an
open-end management investment company registered under the 1940 Act;
(iii) this Agreement and the Reorganization has been authorized and
approved by all requisite action of each Buying Corporation and each
Buying Fund and this Agreement has been duly executed by, and is a valid
and binding obligation of, each Buying Corporation; and (iv) the shares to
be issued in the Reorganization are duly authorized and upon issuance in
accordance with this Agreement will be validly issued, fully paid and non-
assessable shares of each Buying Fund.
9. CONDITIONS TO OBLIGATIONS OF THE SELLING CORPORATION AND THE BUYING
CORPORATION. The obligations of each of the Selling Corporation and the
Buying Corporation with respect to each Reorganization are subject to the
satisfaction of the following conditions:
Tax Opinions. With respect to each Reorganization between a Selling Fund and
its corresponding Buying Fund, the Selling Fund shall have received an
opinion of Ropes & Gray LLP satisfactory to such Selling Fund, and the Buying
Fund shall have received an opinion of Ropes & Gray LLP satisfactory to such
Buying Fund, substantially to the effect that, on the basis of existing
provisions of the Code, Treasury regulations promulgated thereunder, current
administrative rules, pronouncements and court decisions, although, with
respect to the Reorganizations of RiverSource Partners Aggressive Growth Fund
into RiverSource Mid Cap Growth Fund, RiverSource Partners Select Value Fund
into RiverSource Mid Cap Value Fund, RiverSource Partners Small Cap Equity
Fund into Seligman Smaller-Cap Value Fund, RiverSource Partners Small Cap
Growth Fund into Seligman Frontier Fund and Seligman Global Smaller Companies
Fund into RiverSource Partners International Small Cap Fund, the matter is
not free from doubt, generally for federal income tax purposes:
a. The acquisition by the Buying Fund of the assets of the Selling Fund in
exchange for the Buying Fund's assumption of all liabilities of the
Selling Fund and delivery to the Selling Fund of Buying Fund shares (the
"Acquisition Shares"), followed by the distribution by the Selling Fund of
the Acquisition Shares to the shareholders of the Selling Fund in exchange
for their Selling Fund shares, all as provided in paragraph 2(a) and 4(a)
hereof, will constitute a reorganization within the meaning of Section
368(a) of the Code, and the Selling Fund and the Buying Fund will each be
"a party to a reorganization" within the meaning of Section 368(b) of the
Code;
b. No gain or loss will be recognized by the Selling Fund upon (i) the
transfer of its assets to the Buying Fund in exchange for the Acquisition
Shares and the assumption by the Buying Fund of all liabilities of the
Selling Fund or (ii) the distribution of the Acquisition Shares by each
Selling Fund to its shareholders in liquidation, as contemplated in
paragraph 4(a) hereof;
c. No gain or loss will be recognized by the Buying Fund upon receipt of the
assets of the Selling Fund in exchange for the Acquisition Shares and the
assumption by the Buying Fund of all liabilities of the Selling Fund as
contemplated in paragraph 2(a) hereof;
d. The tax basis in the hands of the Buying Fund of the assets of the Selling
Fund transferred to the Buying Fund in the Reorganization will be the same
as the tax basis of such assets in the hands of the Selling Fund
immediately prior to the transfer;
A.6
e. The holding periods of the assets of the Selling Fund in the hands of the
Buying Fund will include the periods during which such assets were held by
the Selling Fund;
f. No gain or loss will be recognized by the Selling Fund's shareholders upon
the exchange of their shares of the Selling Fund for the Acquisition
Shares;
g. The aggregate tax basis of the Acquisition Shares a Selling Fund
shareholder receives in the Reorganization will be the same as the
aggregate tax basis of his or her Selling Fund shares exchanged therefor;
h. Each Selling Fund shareholder's holding period for the Acquisition Shares
will include the period for which he or she held the Selling Fund shares
exchanged therefor, provided that the shareholder held such Selling Fund's
shares as capital assets on the date of the exchange; and
i. The Buying Fund will succeed to and take into account the items of the
Selling Fund described in Section 381(c) of the Code, subject to the
conditions and limitations specified in Sections 381, 382, 383 and 384 of
the Code and the regulations thereunder.
Ropes & Gray LLP will express no view with respect to the effect of the
Reorganization on any transferred asset as to which any unrealized gain or
loss is required to be recognized under federal income tax principles (i) at
the end of a taxable year or upon the termination thereof or (ii) upon the
transfer of such asset regardless of whether such a transfer would otherwise
be a non-taxable transaction.
Each opinion will be based on certain factual certifications made by officers
of each Selling Fund and each Buying Fund, and will also be based on
customary assumptions. The opinions are not guarantees that the tax
consequences of the Reorganizations will be as described above. With respect
to the Reorganizations listed above, the opinions will note and distinguish
certain published precedent. There is no assurance that the Internal Revenue
Service or a court would agree with the opinions.
10. AMENDMENT; TERMINATION; NON-SURVIVAL OF COVENANTS, WARRANTIES AND
REPRESENTATIONS.
a. This Agreement may be amended in writing if authorized by the respective
Boards of Directors. The Agreement may be so amended at any time before or
after the shareholder approval contemplated by paragraph 1 is obtained.
b. At any time prior to the Closing, any of the parties may waive in writing
(i) any inaccuracies in the representations and warranties made to it and
(ii) compliance with any of the covenants or conditions made for its
benefit.
c. Each party hereto may terminate this Agreement at any time prior to the
Closing by notice to the other party if a material condition to its
performance or a material covenant of the other party is not fulfilled on
or before the date specified for its fulfillment or a material breach of
this Agreement is made by the other party and is not cured.
d. This Agreement may be terminated by any party at any time prior to the
Closing, whether before or after approval by the shareholders of each
Selling Fund, without any liability on the part of any party or its
respective directors, officers, or shareholders, on written notice to the
other party, and shall be terminated without liability as of the close of
business on , or a later date agreed upon by the officers of the
Selling Corporations and the Buying Corporations, if the Closing is not
effected on or prior to that date.
e. The representations, warranties and covenants contained in this Agreement,
or in any document delivered in connection with this Agreement, will
survive the Reorganization.
11. EXPENSES. RiverSource Investments, LLC and its affiliates will pay all
solicitation expenses in order to achieve shareholder approval of each
Reorganization whether or not the Reorganization is completed and will bear
the other costs of effecting each Reorganization (other than any brokerage
or other transaction costs associated with the sale or purchase of portfolio
securities in connection with a Reorganization).
12. GENERAL.
a. Headings. The headings contained in this Agreement are for reference
purposes only and will not affect the meaning or interpretation of this
Agreement. Nothing in this Agreement is intended to confer upon any other
person any rights or remedies by reason of this Agreement.
b. Governing Law. This Agreement will be governed by the laws of the state of
Minnesota.
IN WITNESS WHEREOF, each of the parties, individually and not jointly, has
caused this Agreement to be signed.
RIVERSOURCE MANAGERS SERIES, INC., on behalf of
RiverSource Partners Aggressive Growth Fund
RiverSource Partners Select Value Fund
RiverSource Partners Small Cap Equity Fund
A.7
RIVERSOURCE STRATEGY SERIES, INC., on behalf of
RiverSource Partners Small Cap Growth Fund
RIVERSOURCE TAX-EXEMPT MONEY MARKET SERIES, INC., on behalf of
RiverSource Tax-Exempt Money Market Fund
SELIGMAN GLOBAL FUND SERIES, INC., on behalf of
Seligman Global Smaller Companies Fund
By: --------------------------
Name: --------------------------
Title: --------------------------
RIVERSOURCE GOVERNMENT MONEY MARKET FUND, INC.
RIVERSOURCE EQUITY SERIES, INC., on behalf of
RiverSource Mid Cap Growth Fund
RIVERSOURCE INTERNATIONAL MANAGERS SERIES, INC., on behalf of
RiverSource Partners International Small Cap Fund
RIVERSOURCE INVESTMENT SERIES, INC., on behalf of
RiverSource Mid Cap Value Fund
SELIGMAN FRONTIER FUND, INC.
By: --------------------------
Name: --------------------------
Title: --------------------------
The undersigned is a party to this Agreement for the purposes of Section 3c and
11 only.
RIVERSOURCE INVESTMENTS, LLC
By: --------------------------
Name: --------------------------
Title: --------------------------
A.8
SCHEDULE A
<Table>
<Caption>
----------------------------------------------------------------------------------------------------------
SELLING ENTITY SELLING FUND BUYING ENTITY BUYING FUND
----------------------------------------------------------------------------------------------------------
RiverSource RiverSource Partners RiverSource Equity Series, RiverSource Mid Cap Growth
Managers Series, Aggressive Growth Fund Inc. Fund
Inc.
----------------------------------------------------------------------------------------------------------
RiverSource RiverSource Partners RiverSource Investment RiverSource Mid Cap Value
Managers Series, Select Value Fund Series, Inc. Fund
Inc.
----------------------------------------------------------------------------------------------------------
RiverSource RiverSource Partners Small Seligman Value Fund Seligman Smaller-Cap Value
Managers Series, Cap Equity Fund Series, Inc. Fund
Inc.
----------------------------------------------------------------------------------------------------------
RiverSource RiverSource Partners Small Seligman Frontier Fund, Seligman Frontier Fund,
Strategy Series, Cap Growth Fund Inc. Inc.
Inc.
----------------------------------------------------------------------------------------------------------
RiverSource Tax- RiverSource Tax-Exempt RiverSource Government RiverSource Government
Exempt Money Money Market Fund Money Market Fund, Inc. Money Market Fund, Inc.
Market Series,
Inc.
----------------------------------------------------------------------------------------------------------
Seligman Global Seligman Global Smaller RiverSource International RiverSource Partners
Fund Series, Companies Fund Managers Series, Inc. International Small Cap
Inc. Fund
----------------------------------------------------------------------------------------------------------
</Table>
A.9
EXHIBIT B
MINNESOTA BUSINESS CORPORATION ACT SECTIONS 302A.471 AND 302A.473
Minnesota law requires that we provide you with a copy of the state law on
dissenters' rights. Notwithstanding the provisions of the law set out below, the
SEC has taken the position that use of state appraisal procedures by a
registered mutual fund such as RiverSource Partners Aggressive Growth Fund,
RiverSource Partners Select Value Fund, RiverSource Partners Small Cap Equity
Fund, RiverSource Partners Small Cap Growth Fund or RiverSource Tax-Exempt Money
Market Fund would be a violation of Rule 22c-1, the forward pricing rule, under
the 1940 Act. As a result, if any shareholder elects to exercise dissenters'
rights under Minnesota law, the Fund intends to submit this question to a court
of competent jurisdiction. In that event, a dissenting shareholder would not
receive any payment until the end of the court proceeding.
302A.471 RIGHTS OF DISSENTING SHAREHOLDERS.
SUBDIVISION 1. ACTIONS CREATING RIGHTS. A shareholder of a corporation may
dissent from, and obtain payment for the fair value of the shareholder's shares
in the event of, any of the following corporate actions:
(a) unless otherwise provided in the articles, an amendment of the articles that
materially and adversely affects the rights or preferences of the shares of
the dissenting shareholder in that it:
(1) alters or abolishes a preferential right of the shares;
(2) creates, alters, or abolishes a right in respect of the redemption of the
shares, including a provision respecting a sinking fund for the redemption
or repurchase of the shares;
(3) alters or abolishes a preemptive right of the holder of the shares to
acquire shares, securities other than shares, or rights to purchase shares
or securities other than shares;
(4) excludes or limits the right of a shareholder to vote on a matter, or to
cumulate votes, except as the right may be excluded or limited through the
authorization or issuance of securities of an existing or new class or
series with similar or different voting rights; except that an amendment
to the articles of an issuing public corporation that provides that
section 302A.671 does not apply to a control share acquisition does not
give rise to the right to obtain payment under this section; or
(5) eliminates the right to obtain payment under this subdivision;
(b) a sale, lease, transfer, or other disposition of property and assets of the
corporation that requires shareholder approval under section 302A.661,
subdivision 2, but not including a disposition in dissolution described in
section 302A.725, subdivision 2, or a disposition pursuant to an order of a
court, or a disposition for cash on terms requiring that all or
substantially all of the net proceeds of disposition be distributed to the
shareholders in accordance with their respective interests within one year
after the date of disposition;
(c) a plan of merger, whether under this chapter or under chapter 322B, to which
the corporation is a constituent organization, except as provided in
subdivision 3, and except for a plan of merger adopted under section
302A.626;
(d) a plan of exchange, whether under this chapter or under chapter 322B, to
which the corporation is a party as the corporation whose shares will be
acquired by the acquiring organization, except as provided in subdivision 3;
(e) a plan of conversion adopted by the corporation; or
(f) any other corporate action taken pursuant to a shareholder vote with respect
to which the articles, the bylaws, or a resolution approved by the board
directs that dissenting shareholders may obtain payment for their shares.
SUBD. 2. BENEFICIAL OWNERS.
(a) A shareholder shall not assert dissenters' rights as to less than all of the
shares registered in the name of the shareholder, unless the shareholder
dissents with respect to all the shares that are beneficially owned by
another person but registered in the name of the shareholder and discloses
the name and address of each beneficial owner on whose behalf the
shareholder dissents. In that event, the rights of the dissenter shall be
determined as if the shares as to which the shareholder has dissented and
the other shares were registered in the names of different shareholders.
(b) A beneficial owner of shares who is not the shareholder may assert
dissenters' rights with respect to shares held on behalf of the beneficial
owner, and shall be treated as a dissenting shareholder under the terms of
this section and section 302A.473, if the beneficial owner submits to the
corporation at the time of or before the assertion of the rights a written
consent of the shareholder.
B.1
SUBD. 3. RIGHTS NOT TO APPLY.
(a) Unless the articles, the bylaws, or a resolution approved by the board
otherwise provide, the right to obtain payment under this section does not
apply to a shareholder of (1) the surviving corporation in a merger with
respect to shares of the shareholder that are not entitled to be voted on
the merger and are not canceled or exchanged in the merger or (2) the
corporation whose shares will be acquired by the acquiring organization in a
plan of exchange with respect to shares of the shareholder that are not
entitled to be voted on the plan of exchange and are not exchanged in the
plan of exchange.
(b) If a date is fixed according to section 302A.445, subdivision 1, for the
determination of shareholders entitled to receive notice of and to vote on
an action described in subdivision 1, only shareholders as of the date
fixed, and beneficial owners as of the date fixed who hold through
shareholders, as provided in subdivision 2, may exercise dissenters' rights.
(c) Notwithstanding subdivision 1, the right to obtain payment under this
section, other than in connection with a plan of merger adopted under
section 302A.621, is limited in accordance with the following provisions:
(1) The right to obtain payment under this section is not available for the
holders of shares of any class or series of shares that is listed on the
New York Stock Exchange, the American Stock Exchange, the NASDAQ Global
Market, or the NASDAQ Global Select Market.
(2) The applicability of clause (1) is determined as of:
(i) the record date fixed to determine the shareholders entitled to
receive notice of, and to vote at, the meeting of shareholders to act
upon the corporate action described in subdivision 1; or
(ii) the day before the effective date of corporate action described in
subdivision 1 if there is no meeting of shareholders.
(3) Clause (1) is not applicable, and the right to obtain payment under this
section is available pursuant to subdivision 1, for the holders of any
class or series of shares who are required by the terms of the corporate
action described in subdivision 1 to accept for such shares anything other
than shares, or cash in lieu of fractional shares, of any class or any
series of shares of a domestic or foreign corporation, or any other
ownership interest of any other organization, that satisfies the standards
set forth in clause (1) at the time the corporate action becomes
effective.
SUBD. 4. OTHER RIGHTS. The shareholders of a corporation who have a right under
this section to obtain payment for their shares, or who would have the right to
obtain payment for their shares absent the exception set forth in paragraph (c)
of subdivision 3, do not have a right at law or in equity to have a corporate
action described in subdivision 1 set aside or rescinded, except when the
corporate action is fraudulent with regard to the complaining shareholder or the
corporation.
302A.473 PROCEDURES FOR ASSERTING DISSENTERS' RIGHTS.
SUBDIVISION 1. DEFINITIONS.
(a) For purposes of this section, the terms defined in this subdivision have the
meanings given them.
(b) "Corporation" means the issuer of the shares held by a dissenter before the
corporate action referred to in section 302A.471, subdivision 1 or the
successor by merger of that issuer.
(c) "Fair value of the shares" means the value of the shares of a corporation
immediately before the effective date of the corporate action referred to in
section 302A.471, subdivision 1.
(d) "Interest" means interest commencing five days after the effective date of
the corporate action referred to in section 302A.471, subdivision 1, up to
and including the date of payment, calculated at the rate provided in
section 549.09 for interest on verdicts and judgments.
SUBD. 2. NOTICE OF ACTION. If a corporation calls a shareholder meeting at which
any action described in section 302A.471, subdivision 1 is to be voted upon, the
notice of the meeting shall inform each shareholder of the right to dissent and
shall include a copy of section 302A.471 and this section and a brief
description of the procedure to be followed under these sections.
SUBD. 3. NOTICE OF DISSENT. If the proposed action must be approved by the
shareholders and the corporation holds a shareholder meeting, a shareholder who
is entitled to dissent under section 302A.471 and who wishes to exercise
dissenters' rights must file with the corporation before the vote on the
proposed action a written notice of intent to demand the fair value of the
shares owned by the shareholder and must not vote the shares in favor of the
proposed action.
SUBD. 4. NOTICE OF PROCEDURE; DEPOSIT OF SHARES.
(a) After the proposed action has been approved by the board and, if necessary,
the shareholders, the corporation shall send to (i) all shareholders who
have complied with subdivision 3, (ii) all shareholders who did not sign or
consent to a written
B.2
action that gave effect to the action creating the right to obtain payment
under section 302A.471, and (iii) all shareholders entitled to dissent if no
shareholder vote was required, a notice that contains:
(1) the address to which a demand for payment and certificates of certificated
shares must be sent in order to obtain payment and the date by which they
must be received;
(2) any restrictions on transfer of uncertificated shares that will apply
after the demand for payment is received;
(3) a form to be used to certify the date on which the shareholder, or the
beneficial owner on whose behalf the shareholder dissents, acquired the
shares or an interest in them and to demand payment; and
(4) a copy of section 302A.471 and this section and a brief description of the
procedures to be followed under these sections.
(b) In order to receive the fair value of the shares, a dissenting shareholder
must demand payment and deposit certificated shares or comply with any
restrictions on transfer of uncertificated shares within 30 days after the
notice required by paragraph (a) was given, but the dissenter retains all
other rights of a shareholder until the proposed action takes effect.
SUBD. 5. PAYMENT; RETURN OF SHARES.
(a) After the corporate action takes effect, or after the corporation receives a
valid demand for payment, whichever is later, the corporation shall remit to
each dissenting shareholder who has complied with subdivisions 3 and 4 the
amount the corporation estimates to be the fair value of the shares, plus
interest, accompanied by:
(1) the corporation's closing balance sheet and statement of income for a
fiscal year ending not more than 16 months before the effective date of
the corporate action, together with the latest available interim financial
statements;
(2) an estimate by the corporation of the fair value of the shares and a brief
description of the method used to reach the estimate; and
(3) a copy of section 302A.471 and this section, and a brief description of
the procedure to be followed in demanding supplemental payment.
(b) The corporation may withhold the remittance described in paragraph (a) from
a person who was not a shareholder on the date the action dissented from was
first announced to the public or who is dissenting on behalf of a person who
was not a beneficial owner on that date. If the dissenter has complied with
subdivisions 3 and 4, the corporation shall forward to the dissenter the
materials described in paragraph (a), a statement of the reason for
withholding the remittance, and an offer to pay to the dissenter the amount
listed in the materials if the dissenter agrees to accept that amount in
full satisfaction. The dissenter may decline the offer and demand payment
under subdivision 6. Failure to do so entitles the dissenter only to the
amount offered. If the dissenter makes demand, subdivisions 7 and 8 apply.
(c) If the corporation fails to remit payment within 60 days of the deposit of
certificates or the imposition of transfer restrictions on uncertificated
shares, it shall return all deposited certificates and cancel all transfer
restrictions. However, the corporation may again give notice under
subdivision 4 and require deposit or restrict transfer at a later time.
SUBD. 6. SUPPLEMENTAL PAYMENT; DEMAND. If a dissenter believes that the amount
remitted under subdivision 5 is less than the fair value of the shares plus
interest, the dissenter may give written notice to the corporation of the
dissenter's own estimate of the fair value of the shares, plus interest, within
30 days after the corporation mails the remittance under subdivision 5, and
demand payment of the difference. Otherwise, a dissenter is entitled only to the
amount remitted by the corporation.
SUBD. 7. PETITION; DETERMINATION. If the corporation receives a demand under
subdivision 6, it shall, within 60 days after receiving the demand, either pay
to the dissenter the amount demanded or agreed to by the dissenter after
discussion with the corporation or file in court a petition requesting that the
court determine the fair value of the shares, plus interest. The petition shall
be filed in the county in which the registered office of the corporation is
located, except that a surviving foreign corporation that receives a demand
relating to the shares of a constituent domestic corporation shall file the
petition in the county in this state in which the last registered office of the
constituent corporation was located. The petition shall name as parties all
dissenters who have demanded payment under subdivision 6 and who have not
reached agreement with the corporation. The corporation shall, after filing the
petition, serve all parties with a summons and copy of the petition under the
Rules of Civil Procedure. Nonresidents of this state may be served by registered
or certified mail or by publication as provided by law. Except as otherwise
provided, the Rules of Civil Procedure apply to this proceeding. The
jurisdiction of the court is plenary and exclusive. The court may appoint
appraisers, with powers and authorities the court deems proper, to receive
evidence on and recommend the amount of the fair value of the shares. The court
shall determine whether the shareholder or shareholders in question have fully
complied with the requirements of this section, and shall determine the fair
value of the shares, taking into account any and all factors the court finds
relevant, computed by any method or combination of methods that the court, in
its discretion, sees fit to use, whether or not used by the corporation or by a
dissenter. The fair value of the
B.3
shares as determined by the court is binding on all shareholders, wherever
located. A dissenter is entitled to judgment in cash for the amount by which the
fair value of the shares as determined by the court, plus interest, exceeds the
amount, if any, remitted under subdivision 5, but shall not be liable to the
corporation for the amount, if any, by which the amount, if any, remitted to the
dissenter under subdivision 5 exceeds the fair value of the shares as determined
by the court, plus interest.
SUBD. 8. COSTS; FEES; EXPENSES.
(a) The court shall determine the costs and expenses of a proceeding under
subdivision 7, including the reasonable expenses and compensation of any
appraisers appointed by the court, and shall assess those costs and expenses
against the corporation, except that the court may assess part or all of
those costs and expenses against a dissenter whose action in demanding
payment under subdivision 6 is found to be arbitrary, vexatious, or not in
good faith.
(b) If the court finds that the corporation has failed to comply substantially
with this section, the court may assess all fees and expenses of any experts
or attorneys as the court deems equitable. These fees and expenses may also
be assessed against a person who has acted arbitrarily, vexatiously, or not
in good faith in bringing the proceeding, and may be awarded to a party
injured by those actions.
(c) The court may award, in its discretion, fees and expenses to an attorney for
the dissenters out of the amount awarded to the dissenters, if any.
B.4
EXHIBIT C
ADDITIONAL INFORMATION APPLICABLE TO THE BUYING FUNDS
Below is information regarding the Buying Funds. All references to a Fund or the
Funds refer to a Buying Fund or the Buying Funds respectively unless otherwise
noted.
Other Investment Strategies. In addition to the principal investment strategies
previously described for RiverSource Mid Cap Growth Fund, RiverSource Mid Cap
Value Fund and RiverSource Partners International Small Cap Fund, Seligman
Frontier Fund and Seligman Smaller-Cap Value Fund each Buying Fund may utilize
investment strategies that are not principal investment strategies, including
investment in affiliated and non-affiliated pooled investment vehicles
(including mutual funds and exchange traded funds (ETFs), also referred to as
"acquired funds") ownership of which results in the Fund bearing its
proportionate share of the acquired funds' fees and expenses and proportionate
exposure to the risks associated with acquired funds' underlying investments.
ETFs are generally designed to replicate the price and yield of a specified
market index. An ETF's share price may not track its specified market index and
may trade below its net asset value, resulting in a loss. ETFs generally use a
"passive" investment strategy and will not attempt to take defensive positions
in volatile or declining markets. An active secondary market in an ETF's shares
may not develop or be maintained and may be halted or interrupted due to actions
by its listing exchange, unusual market conditions or other reasons. There can
be no assurance an ETF's shares will continue to be listed on an active
exchange.
Additionally, for RiverSource Mid Cap Growth Fund, RiverSource Mid Cap Value
Fund and Seligman Smaller-Cap Value Fund, each Buying Fund may use derivatives
such as futures, options, forward contracts, and swaps (which are financial
instruments that have a value which depends upon, or is derived from, the value
of something else, such as one or more underlying securities, pools of
securities, indexes or currencies). These derivative instruments are used to
produce incremental earnings, to hedge existing positions, to increase or reduce
market or credit exposure, or to increase flexibility. Derivative instruments
will typically increase the Fund's exposure to the principal risks to which it
is otherwise exposed, and may expose the Fund to additional risks, including
counterparty credit risk, leverage risk, hedging risk, correlation risk, and
liquidity risk. Counterparty credit risk is the risk that a counterparty to the
derivative instrument becomes bankrupt or otherwise fails to perform its
obligations due to financial difficulties, and the Fund may obtain no recovery
of its investment or may only obtain a limited recovery, and any recovery may be
delayed. Hedging risk is the risk that derivative instruments used to hedge
against an opposite position, may offset losses, but they may also offset gains.
There is no guarantee that a hedging strategy will eliminate the risk which the
hedging strategy is intended to offset, which may lead to losses within the
Fund. Correlation risk is related to hedging risk and is the risk that there may
be an incomplete correlation between the hedge and the opposite position, which
may result in increased or unanticipated losses. Liquidity risk is the risk that
the derivative instrument may be difficult or impossible to sell or terminate,
which may cause the Fund to be in a position to do something the investment
manager would not otherwise choose, including, accepting a lower price for the
derivative instrument, selling other investments, or foregoing another, more
appealing investment opportunity. Derivative instruments which are not traded on
an exchange, including, but not limited to, forward contracts, swaps and over-
the-counter options, may have increased liquidity risk. Leverage risk is the
risk that losses from the derivative instrument may be greater than the amount
invested in the derivative instrument. In addition, a relatively small price
movement in the underlying security, currency or index may result in a
substantial loss for the Fund using derivatives and certain derivatives have the
potential for unlimited losses, regardless of the size of the initial
investment. Even though the Fund's policies permit the use of derivatives in
this manner, the portfolio managers are not required to use derivatives.
In addition to the principal investment strategies previously described for
RiverSource Government Money Market Fund, the Fund may invest in other
securities and may use other investment strategies that are not principal
investment strategies.
For more information on strategies and holdings, and the risks of such
strategies, including derivative instruments that the Buying Funds may use, see
the Fund's Merger SAI and its annual and semiannual reports.
For RiverSource Mid Cap Growth Fund, RiverSource Mid Cap Value Fund, RiverSource
Partners International Small Cap Fund, Seligman Frontier Fund and Seligman
Smaller-Cap Value Fund:
Unusual Market Conditions. During unusual market conditions, the Fund may
temporarily invest more of its assets in money market securities than during
normal market conditions. Although investing in these securities would serve
primarily to attempt to avoid losses, this type of investing also could prevent
the Fund from achieving its investment objective. During these times, the
portfolio managers may make frequent securities trades that could result in
increased fees, expenses and taxes, and decreased performance. Instead of
investing in money market securities directly, the Fund may invest in shares of
an affiliated or unaffiliated money market fund. See "Cash Reserves" under the
section "General Information" for more information.
C.1
For RiverSource Mid Cap Growth Fund, RiverSource Mid Cap Value Fund, RiverSource
Partners International Small Cap Fund, Seligman Frontier Fund and Seligman
Smaller-Cap Value Fund:
Securities Transaction Commissions. Securities transactions involve the payment
by the Fund of brokerage commissions to broker-dealers, on occasion as
compensation for research or brokerage services (commonly referred to as "soft
dollars"), as the portfolio managers buy and sell securities for the Fund in
pursuit of its objective. A description of the policies governing the Fund's
securities transactions and the dollar value of brokerage commissions paid by
the Fund are set forth in the Merger SAI. The brokerage commissions set forth in
the Merger SAI do not include implied commissions or mark-ups (implied
commissions) paid by the Fund for principal transactions (transactions made
directly with a dealer or other counterparty), including most fixed income
securities (and certain other instruments, including derivatives). Brokerage
commissions do not reflect other elements of transaction costs, including the
extent to which the Fund's purchase and sale transactions may cause the market
to move and change the market price for an investment. Fixed-income securities
are generally traded on the over-the-counter market on a "net" basis without a
stated commission, through dealers acting for their own account and not as
brokers. Prices paid to dealers will generally include a "spread," i.e., the
difference between the prices at which a dealer is willing to purchase or to
sell the security at that time.
Although brokerage commissions and implied commissions are not reflected in the
expense table under "Fees and Expenses of the Fund," they are reflected in the
total return of the Fund.
For RiverSource Government Money Market Fund, RiverSource Mid Cap Growth Fund,
RiverSource Mid Cap Value Fund, RiverSource Partners International Small Cap
Fund, Seligman Frontier Fund and Seligman Smaller-Cap Value Fund:
Directed Brokerage. The Fund's Board has adopted a policy prohibiting the
investment manager, or any subadviser, from considering sales of shares of the
Fund as a factor in the selection of broker-dealers through which to execute
securities transactions.
Additional information regarding securities transactions can be found in the
Merger SAI.
For RiverSource Government Money Market Fund, RiverSource Mid Cap Growth Fund,
RiverSource Mid Cap Value Fund, RiverSource Partners International Small Cap
Fund, Seligman Frontier Fund and Seligman Smaller-Cap Value Fund:
Financial Intermediary Compensation. If you purchase shares of the Fund through
a broker-dealer or other financial intermediary (such as a bank), the Fund and
its related companies may pay the financial intermediary for the sale of Fund
shares and related services. These payments may create a conflict of interest by
influencing the broker-dealer or other financial intermediary to recommend the
Fund over another investment. Ask your financial intermediary, or visit their
website for more information.
FUND MANAGEMENT AND COMPENSATION (FOR ALL BUYING FUNDS)
INVESTMENT MANAGER
RiverSource Investments, 200 Ameriprise Financial Center, Minneapolis, Minnesota
55474, is the investment manager to the RiverSource Family of Funds (including
the RiverSource funds, Threadneedle funds and Seligman funds), and is a wholly-
owned subsidiary of Ameriprise Financial, Inc. (Ameriprise Financial).
Ameriprise Financial is a financial planning and financial services company that
has been offering solutions for clients' asset accumulation, income management
and protection needs for more than 110 years. In addition to managing
investments for the RiverSource Family of Funds, RiverSource Investments manages
investments for itself and its affiliates. For institutional clients,
RiverSource Investments and its affiliates provide investment management and
related services, such as separate account asset management, and institutional
trust and custody, as well as other investment products. For all of its clients,
RiverSource Investments seeks to allocate investment opportunities in an
equitable manner over time. See the Merger SAI for more information.
On November 7, 2008, RiverSource Investments completed the acquisition (the
"Acquisition") of J. & W. Seligman & Co. Incorporated (Seligman), 100 Park
Avenue, New York, New York 10017. With the Acquisition completed and Seligman
Funds' shareholders having previously approved (at a special meeting held on
Nov. 3, 2008) new Investment Management Services Agreements ("IMS Agreements")
between Seligman Funds and RiverSource Investments, RiverSource Investments
became the new investment manager for Seligman Funds, including RiverSource
Government Money Market Fund (Seligman Cash Management Fund prior to Sept. 28,
2009), Seligman Frontier Fund and Seligman Smaller-Cap Value Fund.
The RiverSource Family of Funds has received an order from the Securities and
Exchange Commission that permits RiverSource Investments, subject to the
approval of the Board, to appoint a subadviser or change the terms of a
subadvisory agreement for a fund without first obtaining shareholder approval.
The order permits the fund to add or change unaffiliated subadvisers or change
the fees paid to subadvisers from time to time without the expense and delays
associated with obtaining shareholder approval of the change. If RiverSource
Government Money Market Fund, Seligman Frontier Fund, or Seligman Smaller-Cap
Value Fund were to seek to rely on the order, holders of a majority of the
fund's outstanding voting securities
C.2
would need to approve operating the Fund in this manner. There is no assurance
shareholder approval, if sought, would be received, and no changes will be made
without shareholder approval until that time.
RiverSource Investments or its affiliates may have other relationships,
including significant financial relationships, with current or potential
subadvisers or their affiliates, which may create a conflict of interest. In
making recommendations to the Board to appoint or to change a subadviser, or to
change the terms of a subadvisory agreement, RiverSource Investments does not
consider any other relationship it or its affiliates may have with a subadviser,
and RiverSource Investments discloses the nature of any material relationships
it has with a subadviser to the Board.
The Fund pays RiverSource Investments a fee for managing its assets. Under the
Investment Management Services Agreements, the fee for the most recent fiscal
year was the following percentage of the Buying Fund's average daily net assets:
<Table>
<Caption>
PERCENTAGE OF FUND'S
BUYING FUND AVERAGE DAILY NET ASSETS
RiverSource Government Money Market Fund 0.42%*
RiverSource Mid Cap Growth Fund 0.58%
RiverSource Mid Cap Value Fund 0.57%
RiverSource Partners International Small Cap Fund 1.07%
Seligman Frontier Fund 0.95%*
Seligman Smaller-Cap Value Fund 1.00%*
</Table>
* The investment management services fee paid by each Fund is equal to the
aggregate amount paid by the Fund during the last fiscal year to RiverSource
Investments (since Nov. 7, 2008) and to Seligman (prior to Nov. 7, 2008).
For RiverSource Government Money Market Fund, effective June 15, 2009, the
annual management fee rate is equal to a percentage of the Fund's average
daily net assets with such rate declining from 0.33% to 0.15% as the Fund's
net assets increase. Prior to Nov. 7, 2008, for RiverSource Government Money
Market Fund, the annual management fee rate was equal to a percentage of the
Fund's average daily net assets with such rate declining from 0.42% to
0.375% as the Fund's net assets increased; from Nov. 7, 2008 to June 14,
2009, for RiverSource Government Money Market Fund, the annual management
fee rate was 0.40% of the Fund's average daily net assets. For Seligman
Frontier Fund, effective June 29, 2009, the annual management fee rate is
equal to a percentage of the Fund's average daily net assets, with such rate
declining from 0.885% to 0.790% as the Fund's net assets increase. Prior to
June 29, 2009, for Seligman Frontier Fund, the annual management fee rate
was equal to a percentage of the Fund's average daily net assets, with such
rate declining from 0.95% to 0.85% as the Fund's net assets increased. For
Seligman Smaller-Cap Value Fund, effective June 29, 2009, the annual
management fee rate is equal to a percentage of the Fund's average daily net
assets, with such rate declining from 0.935% to 0.745% as the Fund's net
assets increase. Prior to June 29, 2009, for Seligman Smaller-Cap Value
Fund, the annual management fee rate was equal to 1.00% of the Fund's
average daily net assets.
The reduction in the investment management services fee schedule is related
primarily to the elimination of the administrative portion of the management fee
that is now being charged separately to the Fund through the Administrative
Services Agreement with Ameriprise Financial. Under the Administrative Services
Agreement, effective June 15, 2009, RiverSource Government Money Market Fund
pays Ameriprise Financial an annual fee for administrative and accounting
services equal to a percentage of the Fund's average daily net assets that
declines from 0.06% to 0.03% as the Fund's net assets increase, effective June
29, 2009, each of Seligman Frontier Fund and Seligman Smaller-Cap Value Fund
pays Ameriprise Financial an annual fee for administrative and accounting
services equal to a percentage of the Fund's average daily net assets that
declines from 0.08% to 0.05%, as the Fund's net assets increase.
For RiverSource Mid Cap Growth Fund, RiverSource Mid Cap Value Fund and
RiverSource Partners International Small Cap Fund, the fee includes an
adjustment under the terms of a performance incentive arrangement. The
adjustment is computed by comparing the Fund's performance to the performance of
an index of comparable funds published by Lipper Inc. The index against which
the Fund's performance is currently measured for purposes of the performance
incentive adjustment is the Lipper Mid-Cap Growth Funds Index for RiverSource
Mid Cap Growth Fund, the Lipper Mid-Cap Value Funds Index for RiverSource Mid
Cap Value Fund and the Lipper International Small-Cap Funds Index for
RiverSource Partners International Small Cap Fund. In certain circumstances, the
Fund's Board may approve a change in the index without shareholder approval. The
maximum adjustment (increase or decrease) is 0.12% of the Fund's average net
assets on an annual basis.
Under the IMS Agreement, the Fund also pays taxes, brokerage commissions, and
nonadvisory expenses. For RiverSource Mid Cap Growth Fund, RiverSource Mid Cap
Value Fund and RiverSource Partners International Small Cap Fund, a discussion
regarding the basis for the Board approving the IMS Agreement is available in
the Fund's most recent annual or semiannual shareholder report. For RiverSource
Government Money Market Fund, Seligman Frontier Fund and Seligman Smaller-Cap
Value Fund, a discussion regarding the basis for the Board approving the IMS
Agreement was included in the Funds' proxy statement, dated Aug. 27, 2008, and
is available in the Fund's annual shareholder report for the year ended Dec. 31,
2008 for RiverSource Government Money Market Fund and Seligman Smaller-Cap Value
Fund and for the year ended Oct. 31, 2008 for Seligman Frontier Fund.
C.3
PORTFOLIO MANAGERS
RiverSource Mid Cap Growth Fund
The portfolio managers responsible for the day-to-day management of the Fund
are:
John K. Schonberg, CFA, Portfolio Manager
- Managed the Fund since Oct. 2006.
- Equity Team Leader.
- Joined RiverSource Investments in 1997.
- Began investment career in 1988.
- BS, University of Nebraska.
Sam Murphy, Associate Portfolio Manager
- Managed the Fund since June 2007.
- Employed by RiverSource Investments from 1999-2002; returned to RiverSource
Investments in 2006 as a Senior Research Analyst.
- Began investment career in 1989.
- MBA, University of Pennsylvania, Wharton School of Business.
Mike Marzolf, Associate Portfolio Manager
- Managed the Fund since June 2007.
- Joined RiverSource Investments in 2007 as an Associate Portfolio Manager.
- Began investment career in 1998.
- BS, University of St. Thomas.
RiverSource Mid Cap Value Fund
The portfolio managers responsible for the day-to-day management of the Fund
are:
Warren Spitz, Senior Portfolio Manager
- Managed the Fund since 2002.
- Joined RiverSource Investments in 2000 as a Senior Portfolio Manager.
- Portfolio Manager, Prudential Global Asset Management, 1987 to 2000.
- Began investment career in 1984.
- MBA, Wharton School, University of Pennsylvania.
Steve Schroll, Portfolio Manager
- Managed the Fund since February 2003.
- Joined RiverSource Investments in 1998 as a Senior Security Analyst.
- Senior Equity Analyst, Piper Jaffray, 1988 to 1998; Equity Analyst, First
Asset Management, 1985 to 1988; Equity Analyst, Dain Rauscher, 1981 to 1985.
- Began investment career in 1981.
- MBA, University of Minnesota.
Laton Spahr, CFA, Portfolio Manager
- Managed the Fund since February 2003.
- Joined RiverSource Investments in 2001 as a Security Analyst.
- Sector Analyst, Holland Capital Management, 2000 to 2001; Statistical Research
Intern, Friess Associates, 1998 to 1999.
- Began investment career in 1998.
- MS, University of Wisconsin, Applied Security Analysis Program.
Paul Stocking, Portfolio Manager
- Managed the Fund since 2006.
C.4
- Joined RiverSource Investments in 1995 as a Senior Equity Analyst.
- Vice President, JP Morgan Securities, 1987 to 1995; Investment Banking.
- Began investment career in 1987.
- MBA, University of Chicago.
RiverSource Partners International Small Cap Fund
RiverSource Investments selects, contracts with and compensates Batterymarch and
Columbia WAM (each a "Subadviser" and together, the "Subadvisers") to manage the
investment of the Fund's assets. RiverSource Investments monitors the compliance
of the Subadvisers with the investment objectives and related policies of the
Fund, reviews the performance of the Subadvisers, and reports periodically to
the Board. Each Subadviser manages its portion of the Fund's assets based upon
its experience in managing funds with investment goals and strategies
substantially similar to those of the Fund.
BATTERYMARCH
Batterymarch, a wholly-owned, independently managed subsidiary of Legg Mason,
Inc., which has served as a Subadviser to the Fund since April 2006, is located
at John Hancock Tower, 200 Clarendon Street, 49th Floor, Boston, MA.
Batterymarch, subject to the supervision of RiverSource Investments, provides
day-to-day management of a portion of the Fund's portfolio, as well as
investment research and statistical information under a Subadvisory Agreement
with RiverSource Investments.
Batterymarch uses a team approach to investment management, with portfolio
managers working collaboratively and sharing responsibility for investment
decisions. Batterymarch utilizes a quantitative investment process. Portfolio
managers are involved in the development of investment models that are the
primary driver in the portfolio management process. The investment teams are
responsible for the implementation of the models and the construction and
management of client account portfolios.
At Batterymarch, all portfolios are managed on a collaborative basis using a
systematic, rules-based approach. The portfolio managers oversee the
effectiveness of the overall investment process, including stock ranking and
selection, portfolio construction and trading, and review trades before
execution.
Batterymarch's Global Developed Markets investment team manages the portion of
this Fund allocated to Batterymarch. Members of the investment team may change
from time to time. Adam J. Petryk, CFA, Charles F. Lovejoy, CFA and Christopher
W. Floyd are jointly responsible for the strategic oversight of this portion of
the Fund's investments. Their focus is on portfolio structure, and they will be
primarily responsible for ensuring that the Fund complies with its investment
objective, guidelines and restrictions, and Batterymarch's current investment
strategies.
- Adam J. Petryk, CFA, Senior Director and Global Investment Strategist of the
Global Developed Markets Equity team joined the firm in 2007. Mr. Petryk was
formerly the Deputy Chief Investment Officer and then Chief Investment Officer
for Legg Mason Canada, where he was responsible for asset allocation, domestic
equity and domestic fixed income management. He was also instrumental in the
firm's product development and derivatives activities. Prior to that, Mr.
Petryk was a quantitative equity analyst at Scotia Capital Markets. Mr. Petryk
has 13 years of investment experience. Mr. Petryk holds a BS and an MS from
the University of Waterloo (Canada).
- Charles F. Lovejoy, CFA, Director and Senior Portfolio Manager-International.
Mr. Lovejoy joined Batterymarch in 1992 as a portfolio manager and was
promoted to director of the International team in 2006. Before joining
Batterymarch, Mr. Lovejoy managed international and emerging markets
portfolios for Boston International Advisors and headed the quantitative
research group at Putnam Management Company, with responsibilities for
portfolio management and product development as well as quantitative research
for US, international and emerging markets. Mr. Lovejoy was the former
president of the Boston Security Analysts Society and the Boston Quantitative
Discussion Group. He was also a Director of the International Society of
Financial Analysts. Mr. Lovejoy has 29 years of investment experience. Mr.
Lovejoy holds a BS from Tufts University.
- Christopher W. Floyd, CFA, Portfolio Manager-International. Mr. Floyd joined
Batterymarch in 2000 as a quantitative analyst and became a portfolio manager
in 2003. Prior to Batterymarch, Mr. Floyd held responsibilities at Cigna
Investment Management, Urban & Associates, Inc. and Bay State Federal Savings
Bank. He has ten years of investment experience. Mr. Floyd holds a BA from
Dartmouth College and an MBA from Cornell University.
COLUMBIA WAM
Columbia WAM, which has served as subadviser to the Fund since August 2009, is
located at 227 West Monroe Street, Suite 3000, Chicago, Illinois 60606. Columbia
WAM, subject to the supervision of RiverSource Investments, provides day-to-day
management of a portion of the Fund's portfolio, as well as investment research
and statistical information, under a Subadvisory Agreement with RiverSource
Investments. As of September 30, 2009, Columbia WAM had assets under management
of approximately $26 billion. Columbia WAM is a registered investment advisor
and an indirect, wholly owned
C.5
subsidiary of Bank of America. In addition to serving as investment advisor to
mutual funds, Columbia WAM acts as an investment manager for other institutional
accounts. Columbia WAM may use the research and other expertise of its
affiliates and third parties in managing the Fund's investments.
The portfolio managers responsible for the day-to-day management of the portion
of the Fund allocated to Columbia WAM are:
- P. Zachary Egan, co-portfolio manager, is a Portfolio Manager and Director of
International Research of Columbia WAM since December 2004. Mr. Egan has been
a member of the international team since 1999. Mr. Egan is a CFA and earned
his MA degree from the University of Chicago and his BA degree from Middlebury
College.
- Louis J. Mendes III, co-portfolio manager, is a Portfolio Manager and Analyst
of Columbia WAM. Mr. Mendes has been a member of the international team since
2001. Mr. Mendes is a CFA and earned his MA degree in International Management
from the American Graduate School of International Management in Phoenix and
BA degree from Columbia University.
Seligman Frontier Fund
The portfolio managers responsible for the day-to-day management of the Fund
are:
Michael J. Alpert, Portfolio Manager
- Managed the Fund since 2004.
- Prior to RiverSource Investments acquisition of J. & W. Seligman & Co.
Incorporated (Seligman) in Nov. 2008, Mr. Alpert was a member of the Small
Company Growth Team since he joined Seligman in 1999.
- BA in economics, University of Connecticut and MBA in finance, The Wharton
School at the University of Pennsylvania
Stephan B. Yost
- Managed the Fund since 2001.
- Prior to RiverSource Investments acquisition of Seligman in Nov. 2008, Mr.
Yost was a member of the Small Company Growth Team since he joined Seligman in
2001. Mr. Yost provides assistance to Mr. Alpert in managing the Fund through
his research and contributions to the investment decisions with respect to
companies operating primarily in the healthcare sector, among other sectors.
- BS in economics, The Wharton School at the University of Pennsylvania.
Seligman Smaller-Cap Value Fund
The portfolio managers responsible for the day-to-day management of the Fund
are:
Neil T. Eigen, Portfolio Manager
- Managed the Fund since 1997.
- Prior to RiverSource Investments' acquisition of J. & W. Seligman & Co.
Incorporated (Seligman) in Nov. 2008, Mr. Eigen was head of the Seligman Value
Team since he joined Seligman in 1997. Mr. Eigen was also a Director and
Managing Director of Seligman and Director of Seligman Advisors, Inc. and
Seligman Services, Inc.
- Prior to joining Seligman, Mr. Eigen was a Senior Managing Director of Bear,
Stearns & Co., serving as Chief Investment Officer and Director of Equities of
Bear, Stearns Asset Management. Prior to that, he was Executive Vice President
and Senior Equity Manager at Integrated Resources Asset Management. Mr. Eigen
also spent six years at The Irving Trust Company as a Senior Portfolio Manager
and Chairman of the Equity Selection Committee.
- BS, New York University.
Richard S. Rosen, Portfolio Manager
- Managed the Fund since 1997.
- Prior to RiverSource Investments' acquisition of Seligman in Nov. 2008, Mr.
Rosen was a Managing Director of Seligman.
- Prior to joining Seligman in 1997, Mr. Rosen was a Senior Portfolio Manager at
Bear, Stearns Asset Management, and a Managing Director at Bear, Stearns & Co.
Inc.
- MBA, New York University.
Mr. Eigen and Mr. Rosen each have decision making authority with respect to the
investments of the Fund, although, as team leader of the Value Team, Mr. Eigen
typically makes the final decision with respect to investments made by the Fund.
The Merger SAI provides additional information about portfolio manager
compensation, management of other accounts and ownership of shares in the Fund.
C.6
RIVERSOURCE FAMILY OF FUNDS
THE RIVERSOURCE FAMILY OF FUNDS (EACH INDIVIDUALLY A "FUND" AND, COLLECTIVELY,
THE "FUNDS") INCLUDES "RIVERSOURCE" FUNDS, "RIVERSOURCE PARTNERS" FUNDS,
"SELIGMAN" FUNDS AND "THREADNEEDLE" FUNDS. (THE RIVERSOURCE FUNDS, RIVERSOURCE
PARTNERS FUNDS AND THREADNEEDLE FUNDS MAY BE COLLECTIVELY REFERRED TO AS THE
"RIVERSOURCE FUNDS".) THE FUNDS SHARE THE SAME BOARD OF DIRECTORS/TRUSTEES (THE
"BOARD") AND THE SAME POLICIES AND PROCEDURES INCLUDING THOSE SET FORTH IN THE
SERVICE SECTION OF THIS PROSPECTUS. FOR EXAMPLE, FOR PURPOSES OF CALCULATING THE
INITIAL SALES CHARGE ON THE PURCHASE OF CLASS A SHARES OF A FUND, AN INVESTOR OR
FINANCIAL ADVISOR SHOULD CONSIDER THE COMBINED MARKET VALUE OF ALL FUNDS IN THE
RIVERSOURCE FAMILY OF FUNDS OWNED BY THE INVESTOR AS DEFINED UNDER "INITIAL
SALES CHARGE -- RIGHTS OF ACCUMULATION (ROA)."
BUYING AND SELLING SHARES
The funds are available directly and through broker-dealers, banks and other
financial intermediaries or institutions (financial intermediaries), and through
certain qualified and non-qualified plans, wrap fee products or other investment
products sponsored by financial intermediaries. NOT ALL FINANCIAL INTERMEDIARIES
OFFER THE FUNDS. FINANCIAL INTERMEDIARIES THAT OFFER THE FUNDS MAY CHARGE YOU
ADDITIONAL FEES FOR THE SERVICES THEY PROVIDE AND THEY MAY HAVE DIFFERENT
POLICIES NOT DESCRIBED IN THIS PROSPECTUS. Some policy differences may include
different minimum investment amounts, exchange privileges, fund choices and
cutoff times for investments. Additionally, recordkeeping, transaction
processing and payments of distributions relating to your account may be
performed by the financial intermediaries through which your shares of the fund
are held. Since the fund (and its service providers) may not have a record of
your account transactions, you should always contact the financial intermediary
through which you purchased or at which you maintain your shares of the fund to
make changes to your account or to give instructions concerning your account, or
to obtain information about your account. The fund and its service providers,
including the distributor and the transfer agent, are not responsible for the
failure of one of these financial intermediaries to carry out its obligations to
its customers.
DESCRIPTION OF SHARE CLASSES
INVESTMENT OPTIONS -- CLASSES OF SHARES
The funds offer different classes of shares. There are differences among the
fees and expenses for each share class. See the "Fees and Expenses" table for
more information. Not everyone is eligible to buy every share class. After
determining which share classes you are eligible to buy, decide which share
class best suits your needs. Your financial advisor can help you with this
decision. The following table shows the key features of each share class. Not
all funds offer all classes of shares.
INVESTMENT OPTIONS SUMMARY
<Table>
<Caption>
CONTINGENT DISTRIBUTION PLAN
INITIAL DEFERRED SALES AND/OR ADMINISTRATION
AVAILABILITY(a) SALES CHARGE CHARGE (CDSC) SERVICE FEE(b) SERVICES FEE
--------------------------------------------------------------------------------------------------------------------------------
Class A Available to Yes. Payable at No.(c) Yes. No.
all investors. time of purchase. 0.25%(g)
Lower or no sales
charge for larger
investments.
--------------------------------------------------------------------------------------------------------------------------------
Class B(d)(e)(f) Available to No. Entire Maximum 5% CDSC Yes. No.
all investors. purchase price is during the first 1.00%(g)
invested in shares year decreasing to
of the fund. 0% after six
years.
--------------------------------------------------------------------------------------------------------------------------------
Class C(f) Available to No. Entire 1% CDSC may apply Yes. No.
all investors. purchase price is if you sell shares 1.00%(g)
invested in shares within one year
of the fund. after purchase.
--------------------------------------------------------------------------------------------------------------------------------
Class I Limited to No. No. No. No.
qualifying
institutional
investors.
--------------------------------------------------------------------------------------------------------------------------------
Class R2 Limited to No. No. Yes. Yes.
qualifying 0.50% 0.25%
institutional
investors.
--------------------------------------------------------------------------------------------------------------------------------
Class R3 Limited to No. No. Yes. Yes.
qualifying 0.25% 0.25%
institutional
investors.
--------------------------------------------------------------------------------------------------------------------------------
</Table>
C.7
S-6400-9
INVESTMENT OPTIONS SUMMARY (CONTINUED)
<Table>
<Caption>
CONTINGENT DISTRIBUTION PLAN
INITIAL DEFERRED SALES AND/OR ADMINISTRATION
AVAILABILITY(a) SALES CHARGE CHARGE (CDSC) SERVICE FEE(b) SERVICES FEE
--------------------------------------------------------------------------------------------------------------------------------
Class R4 Limited to No. No. No. Yes.
qualifying 0.25%
institutional
investors.
--------------------------------------------------------------------------------------------------------------------------------
Class R5 Limited to No. No. No. No.
qualifying
institutional
investors.
--------------------------------------------------------------------------------------------------------------------------------
Class W Limited to No. No. Yes. No.
qualifying 0.25%(g)
discretionary
managed accounts.
--------------------------------------------------------------------------------------------------------------------------------
Class Y Limited to No. No. No. Yes.
qualifying 0.15%
institutional
investors.
--------------------------------------------------------------------------------------------------------------------------------
</Table>
(a) See "Buying and Selling Shares, Determining which class of shares to
purchase" for more information on availability of share classes and eligible
investors. See "Buying and Selling Shares, Opening an Account" for
information on minimum investment and account balance requirements.
(b) For each of Class A, Class B, Class C, Class R2, Class R3 and Class W
shares, as applicable, each fund has adopted a plan under Rule 12b-1 of the
Investment Company Act of 1940, as amended, that allows it to pay
distribution and shareholder servicing-related expenses for the sale of
shares and the servicing of shareholders. This plan has been reviewed and
approved by the Board. Because these fees are paid out of fund assets on an
on-going basis, over time these fees will increase the cost of your
investment and may cost you more than paying other types of distribution
(sales) or servicing charges.
(c) A 1% CDSC may be assessed on Class A shares sold within 18 months after
purchase. See "Buying and Selling Shares, Sales Charges, Class
A -- contingent deferred sales charge" for more information. For all funds
except money market funds.
(d) Class B shares automatically convert to Class A shares. See "Buying and
Selling Shares, Sales Charges, Class B and Class C -- CDSC alternative" for
more information on the timing of conversion of Class B shares to Class A
shares. Timing of conversion will vary depending on the date of your
original purchase of the Class B shares.
(e) Class B shares of RiverSource Absolute Return Currency and Income Fund are
only available for exchanges from Class B shares of another fund in the
RiverSource Family of Funds. Class B shares of each of RiverSource Floating
Rate Fund, RiverSource Inflation Protected Securities Fund, RiverSource
Intermediate Tax-Exempt Fund, RiverSource Limited Duration Bond Fund and
RiverSource Short Duration U.S. Government Fund are closed to new investors
and new purchases. (Existing shareholders in these funds may continue to own
Class B shares and make exchanges into and out of existing accounts where
Class B shares of these funds are maintained.)
(f) The money market funds may offer Class B and Class C shares, but only to
facilitate exchanges with other funds offering Class B and Class C shares,
respectively.
(g) For RiverSource Cash Management Fund and RiverSource Tax-Exempt Money Market
Fund, Class A is 0.10%. For RiverSource Cash Management Fund, Class B is
0.85%, Class C is 0.75% and Class W is 0.10%.
DISTRIBUTION AND SERVICE FEES
The distribution and shareholder servicing fees for Class A, Class B, Class C,
Class R2, Class R3 and Class W shares, as applicable, are subject to the
requirements of Rule 12b-1 under the Investment Company Act of 1940, as amended,
and are used to reimburse the distributor for certain expenses it incurs in
connection with distributing the fund's shares and directly or indirectly
providing services to fund shareholders. These expenses include payment of
distribution and/or shareholder servicing fees to financial intermediaries that
sell shares of the fund or provide services to fund shareholders, up to 0.50% of
the average daily net assets of Class R2 shares sold and held through them and
up to 0.25%* of the average daily net assets of Class A, Class B, Class C, Class
R3 and Class W shares sold and held through them. For Class A, Class B, Class
R2, Class R3 and Class W shares, the distributor begins to pay these fees
immediately after purchase. For Class C shares, the distributor pays these fees
in advance for the first 12 months. Financial intermediaries also receive
distribution fees up to 0.75% of the average daily net assets of Class C shares
sold and held through them, which the distributor begins to pay 12 months after
purchase. For Class B shares, and, for the first 12 months following the sale of
Class C shares, the fund's distributor retains the distribution fee of up to
0.75% in order to finance the payment of sales commissions to financial
intermediaries, and to pay for other distribution related expenses. Financial
intermediaries may compensate their financial advisors with the shareholder
servicing and distribution fees paid to them by the distributor. IF YOU MAINTAIN
SHARES OF THE FUND DIRECTLY WITH THE FUND, WITHOUT WORKING DIRECTLY WITH A
FINANCIAL INTERMEDIARY OR FINANCIAL ADVISOR, DISTRIBUTION AND SERVICE FEES MAY
BE RETAINED BY THE DISTRIBUTOR AS REIMBURSEMENT FOR INCURRING CERTAIN
DISTRIBUTION AND SHAREHOLDER SERVICING RELATED EXPENSES.
* For RiverSource Cash Management Fund, financial intermediaries receive fees
up to 0.10% of the average daily net assets of Class A, Class B and Class W
shares sold and held through them.
PLAN ADMINISTRATION FEE
Class R2, Class R3, Class R4 and Class Y shares pay an annual plan
administration services fee for the provision of various administrative,
recordkeeping, communication and educational services. The fee for Class R2,
Class R3 and Class R4 shares is equal on an annual basis to 0.25% of average
daily net assets attributable to the respective class. The fee for Class Y
shares is equal on an annual basis to 0.15% of average daily net assets
attributable to the class.
C.8
DETERMINING WHICH CLASS OF SHARES TO PURCHASE
Each of the fund's classes represent an interest in the same portfolio of
investments. However, as set forth above, each class has its own sales charge
schedule, and its ongoing distribution and shareholder service fees may differ
from other classes. When deciding which class of shares to buy, you should
consider, among other things:
- The amount you plan to invest.
- How long you intend to remain invested in the fund or another fund in the
RiverSource Family of Funds.
- Whether you may be eligible for reduced or no sales charges when you buy or
sell shares.
Your authorized financial intermediary or financial advisor will be able to help
you decide which class of shares best meets your needs.
CLASS A, CLASS B AND CLASS C SHARES*
Class B shares of RiverSource Absolute Return Currency and Income Fund are not
currently available for new purchases. However, if you own Class B shares of
another fund in the RiverSource Family of Funds, you may exchange into Class B
shares of RiverSource Absolute Return Currency and Income Fund, if you meet the
minimum investment and account balance requirements set forth in "Opening an
Account," subject to the limitations set forth in this section. New purchases of
Class B shares will not be permitted if your rights of accumulation are $50,000
or higher, and new purchases of Class C shares will not be permitted if your
rights of accumulation are $1,000,000 or higher. See "Sales Charges, Initial
Sales Charge -- Rights of Accumulation" for information on rights of
accumulation.
Class B shares have a higher annual distribution fee than Class A shares and a
contingent deferred sales charge (CDSC) for six years. Class B shares convert to
Class A shares. Class B shares purchased through reinvested dividends and
distributions will convert to Class A shares in the same proportion as the other
Class B shares. See "Class B and Class C -- CDSC alternative" for information on
timing of Class B share conversion to Class A shares.
Class C shares have a higher annual distribution fee than Class A shares and a
CDSC for one year. Class C shares have no sales charge if you hold the shares
for longer than one year. Unlike Class B shares, Class C shares do not convert
to Class A shares. As a result, you will pay a distribution fee for as long as
you hold Class C shares.
If you choose a share class with a CDSC (Class B or Class C), you should
consider the length of time you intend to hold your shares. To help you
determine which investment is best for you, consult your financial intermediary
or financial advisor.
* For money market funds, new investments must be made in Class A shares of
the fund. The money market funds offer Class B and Class C shares only to
facilitate exchanges between classes of these shares in other funds.
CLASS I SHARES.
The following eligible investors may purchase Class I shares:
- Any fund distributed by the distributor, if the fund seeks to achieve its
investment objective by investing primarily in shares of funds in the
RiverSource Family of Funds.
Class I shares may be purchased, sold or exchanged only through the distributor
or an authorized financial intermediary.
CLASS R AND CLASS Y SHARES.
The following eligible institutional investors may purchase Class R2, Class R3,
Class R4, Class R5 and Class Y shares:
- Qualified employee benefit plans.
- Trust companies or similar institutions, and charitable organizations that
meet the definition in Section 501(c)(3) of the Internal Revenue Code.
- Non-qualified deferred compensation plans whose participants are included in a
qualified employee benefit plan described above.
- State sponsored college savings plans established under Section 529 of the
Internal Revenue Code.
- Health Savings Accounts created pursuant to public law 108-173.
Additionally, if approved by the distributor, the following eligible
institutional investors may purchase Class R5 shares:
- Institutional or corporate accounts above a threshold established by the
distributor (currently $1 million per fund or $10 million in all funds in the
RiverSource Family of Funds).
- Bank trust departments.
Class R and Class Y shares generally are not available to retail non-retirement
accounts, traditional and Roth IRAs, Coverdell Educational Savings Accounts,
SEPs, SARSEPs, SIMPLE IRAs and individual 403(b) plans.
C.9
Class R shares may be purchased, sold or exchanged only through the distributor
or an authorized financial intermediary.
CLASS W SHARES.
The following eligible investors may purchase Class W shares:
- Investors purchasing through authorized investment programs managed by
investment professionals, including discretionary managed account programs.
Class W shares may be purchased, sold or exchanged only through the distributor
or an authorized financial intermediary.
Shares originally purchased in a discretionary managed account may continue to
be held in Class W outside of a discretionary managed account, but no additional
Class W purchases may be made and no exchanges to Class W shares of another fund
may be made outside of a discretionary managed account.
IN ADDITION, FOR CLASS I, CLASS R, CLASS W AND CLASS Y SHARES, THE DISTRIBUTOR,
IN ITS SOLE DISCRETION, MAY ACCEPT OR AUTHORIZE FINANCIAL INTERMEDIARIES TO
ACCEPT INVESTMENTS FROM OTHER PURCHASERS NOT LISTED ABOVE.
Please consult your financial advisor for assistance in selecting the
appropriate class of shares. For more information, see the SAI.
SALES CHARGES
FOR FUNDS OTHER THAN MONEY MARKET FUNDS
CLASS A -- INITIAL SALES CHARGE ALTERNATIVE:
Your purchase price for Class A shares is generally the net asset value (NAV)
plus a front-end sales charge. The distributor receives the sales charge and re-
allows a portion of the sales charge to the financial intermediary through which
you purchased the shares. The distributor retains the balance of the sales
charge. The distributor retains the full sales charge you pay when you purchase
shares of the fund directly from the fund (not through an authorized financial
intermediary). Sales charges vary depending on the amount of your purchase.
INITIAL SALES CHARGE(A) FOR CLASS A SHARES
For equity funds and funds-of-funds (equity)*
<Table>
<Caption>
MAXIMUM REALLOWANCE
AS A % OF AS A % OF AS A % OF
TOTAL MARKET VALUE PURCHASE PRICE(b) NET AMOUNT INVESTED PURCHASE PRICE
--------------------------------------------------------------------------------------------------------------
Up to $49,999 5.75% 6.10% 5.00%
$50,000--$99,999 4.75 4.99 4.00
$100,000--$249,999 3.50 3.63 3.00
$250,000--$499,999 2.50 2.56 2.15
$500,000--$999,999 2.00 2.04 1.75
$1,000,000 or more 0.00 0.00 0.00(c),(d)
</Table>
For fixed income funds except those listed below and funds-of-funds (fixed
income)*
<Table>
<Caption>
MAXIMUM REALLOWANCE
AS A % OF AS A % OF AS A % OF
TOTAL MARKET VALUE PURCHASE PRICE(b) NET AMOUNT INVESTED PURCHASE PRICE
--------------------------------------------------------------------------------------------------------------
Up to $49,999 4.75% 4.99% 4.00%
$50,000--$99,999 4.25 4.44 3.50
$100,000--$249,999 3.50 3.63 3.00
$250,000--$499,999 2.50 2.56 2.15
$500,000--$999,999 2.00 2.04 1.75
$1,000,000 or more 0.00 0.00 0.00(c),(d)
</Table>
C.10
For RiverSource Absolute Return Currency and Income Fund, RiverSource Floating
Rate Fund, RiverSource Inflation Protected Securities Fund, RiverSource
Intermediate Tax-Exempt Fund, RiverSource Limited Duration Bond Fund and
RiverSource Short Duration U.S. Government Fund
<Table>
<Caption>
MAXIMUM REALLOWANCE
AS A % OF AS A % OF AS A % OF
TOTAL MARKET VALUE PURCHASE PRICE(b) NET AMOUNT INVESTED PURCHASE PRICE
--------------------------------------------------------------------------------------------------------------
Up to $49,999 3.00% 3.09% 2.50%
$50,000--$99,999 3.00 3.09 2.50
$100,000--$249,999 2.50 2.56 2.15
$250,000--$499,999 2.00 2.04 1.75
$500,000--$999,999 1.50 1.52 1.25
$1,000,000 or more 0.00 0.00 0.00(c),(d)
</Table>
* "Funds-of-funds (equity)" includes -- RiverSource Portfolio Builder
Aggressive Fund, RiverSource Portfolio Builder Moderate Aggressive Fund,
RiverSource Portfolio Builder Moderate Fund, RiverSource Portfolio Builder
Total Equity Fund, RiverSource Retirement Plus 2010 Fund, RiverSource
Retirement Plus 2015 Fund, RiverSource Retirement Plus 2020 Fund,
RiverSource Retirement Plus 2025 Fund, RiverSource Retirement Plus 2030
Fund, RiverSource Retirement Plus 2035 Fund, RiverSource Retirement Plus
2040 Fund, RiverSource Retirement Plus 2045 Fund, Seligman TargETFund 2045,
Seligman TargETFund 2035, Seligman TargETFund 2025, Seligman TargETFund 2015
and Seligman TargETFund Core. "Funds-of-funds (fixed income)"
includes -- RiverSource Income Builder Basic Income Fund, RiverSource Income
Builder Enhanced Income Fund, RiverSource Income Builder Moderate Income
Fund, RiverSource Portfolio Builder Conservative Fund and RiverSource
Portfolio Builder Moderate Conservative Fund.
(a) Because of rounding in the calculation of the offering price, the portion of
the sales charge retained by the distributor may vary and the actual sales
charge you pay may be more or less than the sales charge calculated using
these percentages.
(b) Purchase price includes the sales charge.
(c) Although there is no sales charge for purchases with a total market value
over $1,000,000, and therefore no re-allowance, the distributor may pay a
financial intermediary the following out of its own resources: a sales
commission of up to 1.00% for a sale of $1,000,000 to $3,999,999; a sales
commission up to 0.50% for a sale of $4,000,000 to $49,999,999; and a sales
commission up to 0.25% for a sale of $50,000,000 or more.
(d) For certain eligible employee benefit plans defined under section 401(a),
401(k), 457 and 403(b) which meet eligibility rules for the waiver of
applicable sales charges, the distributor may pay the following out of its
own resources: a sales commission of 1.00% for a sale of $1 to $3,999,999
received in eligible employee benefit plans; a sales commission up to 0.50%
for a sale of $4,000,000 to $49,999,999; and a sales commission up to 0.25%
for a sale of $50,000,000 or more. See "Initial Sales Charge -- Waivers of
the sales charge for Class A shares" for employee benefit plan eligibility
rules.
There is no initial sales charge on reinvested dividends or capital gain
distributions.
INITIAL SALES CHARGE -- RIGHTS OF ACCUMULATION (ROA). You may be able to reduce
the sales charge on Class A shares, based on the combined market value of
accounts in your ROA group. Your ROA group includes the current market values of
the following investments which are eligible to be added together for purposes
of determining the sales charge on your next purchase:
- Your current investment in a fund; and
- Previous investments you and members of your household have made in Class A,
Class B or Class C shares in the fund and other funds in the RiverSource
Family of Funds, provided your investment was subject to a sales charge. Your
household consists of you, your spouse or domestic partner and your unmarried
children under age 21, all of whom share a mailing address.
The following accounts are eligible to be included in your ROA group in order to
determine the sales charge on your purchase:
- Individual or joint accounts;
- Roth and traditional IRAs, SEPs, SIMPLEs and TSCAs, provided they are invested
in Class A, Class B or Class C shares that were subject to a sales charge;
- UGMA/UTMA accounts for which you, your spouse, or your domestic partner is
parent or guardian of the minor child;
- Revocable trust accounts for which you or a member of your household,
individually, is the beneficial owner/grantor;
- Accounts held in the name of your, your spouse's, or your domestic partner's
sole proprietorship or single owner limited liability company or S
corporation; and
- Qualified retirement plan assets, provided that you are the sole owner of the
business sponsoring the plan, are the sole participant (other than a spouse)
in the plan, and have no intention of adding participants to the plan.
The following accounts are NOT eligible to be included in your ROA group in
order to determine the sales charge on your purchase:
- Accounts of pension and retirement plans with multiple participants, such as
401(k) plans (which are combined to reduce the sales charge for the entire
pension or retirement plan and therefore are not used to reduce the sales
charge for your individual accounts);
- Investments in Class A shares where the sales charge is waived, for example,
purchases through wrap accounts;
C.11
- Investments in Class I, Class R2, Class R3, Class R4, Class R5, Class W or
Class Y shares;
- Investments in 529 plans, donor advised funds, variable annuities, variable
life insurance products, wrap accounts or managed separate accounts; and
- Charitable and irrevocable trust accounts.
If you purchase fund shares through different financial intermediaries, and you
want to include those assets toward a reduced sales charge, you must inform your
financial intermediary in writing about the other accounts when placing your
purchase order. Contact your financial intermediary to determine what
information is required.
Unless you provide your financial intermediary in writing with information about
all of the accounts that may count toward a sales charge reduction, there can be
no assurance that you will receive all of the reductions for which you may be
eligible. You should request that your financial intermediary provide this
information to the fund when placing your purchase order.
For more information on ROA, please see the SAI.
INITIAL SALES CHARGE -- LETTER OF INTENT (LOI). Generally, if you intend to
invest $50,000 or more (including any existing ROA) over a period of up to 13
months, you may be able to reduce the front-end sales charge(s) for investments
in Class A shares by completing and filing an LOI. The required form of LOI may
vary by financial intermediary. Existing ROA can be included in your LOI. Each
purchase of fund shares normally subject to an initial sales charge made during
the 13-month period will be made at the public offering price applicable to a
single transaction of the total dollar amount indicated by the LOI. Five percent
of the commitment amount will be placed in escrow. At the end of the 13-month
period, the LOI will end and the shares will be released from escrow. If you do
not invest the commitment amount by the end of the 13 months, the remaining
amount of the unpaid sales charge will be redeemed from the escrowed shares and
the remaining balance released from escrow.
Existing ROA Example. Shareholder currently has $60,000 ROA in the funds.
Shareholder completes an LOI to invest $100,000 in the funds (ROA eligible
accounts). Shareholder only needs to invest an additional $40,000 in the funds'
Class A shares (any non-money market fund in the RiverSource Family of Funds) in
order to fulfill the LOI commitment and receive reduced front-end sales
charge(s) over the next 13 months.
Notification Obligation. You must request the reduced sales charge when you buy
shares. If you do not complete and file an LOI, or do not request the reduced
sales charge at the time of purchase, you will not be eligible for the reduced
sales charge. You should request that your financial intermediary provide this
information to the fund when placing your purchase order. For more detail on
LOIs, please contact your financial intermediary or see the SAI.
INITIAL SALES CHARGE -- WAIVERS OF THE SALES CHARGE FOR CLASS A SHARES. Sales
charges do not apply to:
- current or retired Board members, officers or employees of the funds or
RiverSource Investments or its affiliates, their spouses or domestic partners,
children, parents and their spouse's or domestic partner's parents.
- current or retired Ameriprise Financial Services, Inc. financial advisors,
employees of financial advisors, their spouses or domestic partners, children,
parents and their spouse's or domestic partner's parents.
- registered representatives and other employees of affiliated or unaffiliated
financial intermediaries having a selling agreement with the distributor,
including their spouses, domestic partners, children, parents and their
spouse's or domestic partner's parents.
- portfolio managers employed by subadvisers of the funds, including their
spouses or domestic partners, children, parents and their spouse's or domestic
partner's parents.
- partners and employees of outside legal counsel to the funds or the funds'
directors or trustees who regularly provide advice and services to the funds,
or to their directors or trustees.
- direct rollovers from qualified employee benefit plans, provided that the
rollover involves a transfer to Class A shares in the same fund.
- purchases made:
- with dividend or capital gain distributions from a fund or from the same
class of another fund in the RiverSource Family of Funds;
- through or under a wrap fee product or other investment product sponsored by
a financial intermediary that charges an account management fee that has, or
that clear trades through a financial intermediary that has, a selling
agreement with the distributor;
- through state sponsored college savings plans established under Section 529
of the Internal Revenue Code; or
- through bank trust departments.
C.12
- separate accounts established and maintained by an insurance company which are
exempt from registration under Section 3(c)(11).
- purchases made through "employee benefit plans" created under section 401(a),
401(k), 457 and 403(b) which:
- have at least $1 million in plan assets at the time of investment; and
- have a plan level or omnibus account that is maintained with the fund or its
transfer agent; and
- transact directly with the fund or its transfer agent through a third party
administrator or third party recordkeeper.
For more information regarding waivers of sales charge for Class A purchases,
please see the SAI.
The distributor may, in its sole discretion, authorize the waiver of sales
charges for additional classes of investors. Policies related to reducing or
waiving the sales charge may be modified or withdrawn at any time.
Unless you provide your financial intermediary with information in writing about
all of the factors that may count toward a waiver of the sales charge, there can
be no assurance that you will receive all of the waivers for which you may be
eligible. You should request that your financial intermediary provide this
information to the fund when placing your purchase order.
Because the current prospectus is available on the funds' website (for
RiverSource funds) at riversource.com/funds or (for Seligman funds) at
seligman.com free of charge, information regarding breakpoint discounts is not
separately disclosed on the website.
CDSCS AND THE COMBINATION OF TARGET DATE FUNDS WITH SELIGMAN TARGETFUND CORE
Each of Seligman TargETFund 2045, Seligman TargETFund 2035, Seligman TargETFund
2025 and Seligman TargETFund 2015 (the Target Date Funds) will automatically be
combined with Seligman TargETFund Core during their respective target year. The
investment manager expects each of these combinations to be effected as an
acquisition of the assets and liabilities of the applicable Target Date Fund in
exchange for shares of Seligman TargETFund Core at net asset value, with the
shares of Seligman TargETFund Core then distributed to shareholders of the
applicable Target Date Fund. For the purpose of calculating CDSCs, holding
periods in respect of shares of a Target Date Fund will be carried over to
shares of Seligman TargETFund Core acquired as a result of the combination of a
Target Date Fund with Seligman TargETFund Core.
CLASS A -- CONTINGENT DEFERRED SALES CHARGE
For Class A shares purchased without a sales charge where a commission was
separately paid by the distributor to an authorized financial intermediary
effecting the purchase, a 1% CDSC may be charged if you sell your shares within
18 months after purchase. A CDSC will be based on the original purchase cost or
the current market value of the shares being sold, whichever is less.
CDSC -- WAIVERS OF THE CDSC FOR CLASS A SHARES. The CDSC will be waived on sales
of shares:
- to which no sales commission or transaction fee was paid to an authorized
financial intermediary at the time of purchase.
- purchased through reinvestment of dividends and capital gain distributions.
- in the event of the shareholder's death.
- from a monthly, quarterly or annual systematic redemption plan of up to an
annual amount of 12% of the account value on a per fund basis.
- in an account that has been closed because it falls below the minimum account
balance.
- that result from required minimum distributions taken from retirement accounts
upon the shareholders attainment of
age 70 1/2.
- that result from returns of excess contributions or excess deferral amounts
made to a retirement plan participant.
- of RiverSource funds purchased prior to Dec. 1, 2008.
- initially purchased by an employee benefit plan that is not connected with a
plan level termination.
The distributor may, in its sole discretion, authorize the waiver of the CDSC
for additional classes of investors. Policies relating to waiving the CDSC may
be modified or withdrawn at any time.
CLASS B AND CLASS C -- CDSC ALTERNATIVE
The money market funds (except RiverSource Tax-Exempt Money Market Fund) offer
Class B and Class C shares, but only to facilitate exchanges with other funds
offering Class B and Class C shares, respectively. For example, if you own Class
B or Class C shares of another fund, but want to hold your money in a money
market fund, you may exchange into Class B or Class C shares of a money market
fund. Funds that offer Class B and Class C shares have limitations on the amount
you may
C.13
invest in those share classes. If you are considering purchasing Class B or
Class C shares of a fund, please see the prospectus for that fund for any
effective purchase limitations.
Although you may not purchase Class B and Class C shares of the money market
funds directly, if you exchange into Class B or Class C shares of a money market
fund from another fund, you will be subject to the rules governing CDSC set
forth in this section.
To minimize the amount of CDSC you may pay when you sell your shares, the fund
assumes that shares acquired through reinvested dividends and capital gain
distributions (which are not subject to CDSC) are sold first. Shares that have
been in your account long enough so that they are not subject to a CDSC are sold
next. After these shares are exhausted, shares will be sold in the order they
were purchased (earliest to latest).
FOR CLASS B, the CDSC is based on the sale amount and the number of years
between purchase and sale. The following table shows how CDSC percentages on
sales decline over time:
<Table>
<Caption>
IF THE SALE IS MADE DURING THE: THE CDSC PERCENTAGE RATE IS:*
First year 5%
Second year 4%
Third year 3%**
Fourth year 3%
Fifth year 2%
Sixth year 1%
Seventh or eighth year 0%
</Table>
* Because of rounding in the calculation, the portion of the CDSC retained by
the distributor may vary and the actual CDSC you pay may be more or less
than the CDSC calculated using these percentages.
** For shares purchased in a RiverSource fund on or prior to June 12, 2009, the
CDSC percentage for the third year is 4%.
Although there is no front-end sales charge when you buy Class B shares, the
distributor pays a sales commission of 4% to financial intermediaries that sell
Class B shares. A portion of this commission may, in turn, be paid to your
financial advisor. The distributor receives any CDSC imposed when you sell your
Class B shares.
You may not make additional purchases of Class B shares if your ROA exceeds
$49,999.99.
Class B shares purchased in a RiverSource fund prior to May 21, 2005 age on a
calendar year basis. Class B shares purchases made in a RiverSource fund
beginning May 21, 2005 age on a daily basis. For example, a purchase made on
Nov. 12, 2004 completed its first year on Dec. 31, 2004 under calendar year
aging. However, a purchase made on Nov. 12, 2005 completed its first year on
Nov. 11, 2006 under daily aging.
Class B shares originally purchased in a RiverSource fund prior to May 21, 2005
will convert to Class A shares in the ninth calendar year of ownership. Class B
shares originally purchased in a Seligman fund on or prior to June 12, 2009 will
convert to Class A shares in the month prior to the ninth year of ownership.
Class B shares purchased in a RiverSource fund beginning May 21, 2005 and Class
B shares purchased in a Seligman fund beginning June 13, 2009 will convert to
Class A shares one month after the completion of the eighth year of ownership.
FOR CLASS C, a 1% CDSC may be charged if you sell your shares within one year
after purchase. Although there is no front-end sales charge when you buy Class C
shares, the distributor pays a total amount up to 1% (including sales commission
and advance of service fees) to financial intermediaries that sell Class C
shares. See "Buying and Selling Shares -- Distribution and Service Fees." A
portion of this commission may, in turn, be paid to your financial advisor. The
distributor receives any CDSC imposed when you sell your Class C shares. You may
not make additional purchases of Class C shares if your ROA exceeds $999,999.99.
For both Class B and Class C shares, the amount of any CDSC you pay will be
based on the lower of the original purchase price of those shares or current net
asset value. Because the CDSC is imposed only on sales that reduce your total
purchase payments, you do not have to pay a CDSC on any amount that represents
appreciation in the value of your shares, income earned by your shares, or
capital gains. In addition, the CDSC on your sale, if any, will be based on your
oldest purchase payment. The CDSC on the next amount sold will be based on the
next oldest purchase payment.
EXAMPLE
Assume you had invested $10,000 in Class B shares and that your investment had
appreciated in value to $12,000 after 3 1/2 years, including reinvested
dividends and capital gain distributions. You could sell up to $2,000 worth of
shares without paying a CDSC ($12,000 current value less $10,000 purchase
amount). If you sold $2,500 worth of shares, the CDSC would apply to the $500
representing part of your original purchase price. The CDSC rate would be 3%
because the sale was made during the fourth year after the purchase.
C.14
CDSC -- WAIVERS OF THE CDSC FOR CLASS B SHARES. The CDSC will be waived on sales
of shares:
- in the event of the shareholder's death.
- that result from required minimum distributions taken from retirement accounts
upon the shareholders' attainment of age 70 1/2.
- sold under an approved substantially equal periodic payment arrangement.
- by certain other investors, including certain institutions as set forth in
more detail in the SAI.
For more information regarding waivers of the CDSC for Class B shares, please
see the SAI.
The distributor may, in its sole discretion, authorize the waiver of the CDSC
for additional classes of investors. Policies relating to waiving the CDSC may
be modified or withdrawn at any time.
CDSC -- WAIVERS OF THE CDSC FOR CLASS C SHARES. The CDSC will be waived on sales
of shares:
- in the event of the shareholder's death.
- to which no sales commission or transaction fee was paid to an authorized
financial intermediary at the time of purchase.
- that result from required minimum distributions taken from retirement accounts
upon the shareholders' attainment of age 70 1/2.
- initially purchased by an eligible employee benefit plan that are not
connected with a plan level termination.
- by certain other investors, including certain institutions as set forth in
more detail in the SAI.
For more information regarding waivers of the CDSC for Class C shares, please
see the SAI.
The distributor may, in its sole discretion, authorize the waiver of the CDSC
for additional classes of investors. Policies relating to waiving the CDSC may
be modified or withdrawn at any time.
CLASS I, CLASS R2, CLASS R3, CLASS R4, CLASS R5, CLASS W AND CLASS Y -- NO SALES
CHARGE. For each of Class I, Class R2, Class R3, Class R4, Class R5 and Class W
there is no initial sales charge or CDSC.
OPENING AN ACCOUNT
Financial institutions are required by law to obtain certain personal
information from each person who opens an account in order to verify the
identity of the person. As a result, when you open an account you will be asked
to provide your name, permanent street address, date of birth, and Social
Security or Employer Identification number. You may also be asked for other
identifying documents or information. If you do not provide this information,
the fund or the financial intermediary through which you are investing in the
fund may not be able to open an account for you. If the fund or the financial
intermediary through which you are investing in the fund is unable to verify
your identity, your account may be closed, or other steps may be taken, as
deemed appropriate.
When you buy shares, your order will be priced at the next NAV calculated after
your order is accepted by the fund or an authorized financial intermediary. Any
applicable sales charge will be added to the purchase price for Class A shares.
You may establish and maintain your account with an authorized financial
intermediary or directly with the fund. The fund may appoint servicing agents to
accept purchase orders and to accept exchange (and sale) orders on its behalf.
Accounts established with the fund will be supported by the fund's transfer
agent.
METHODS OF PURCHASING SHARES
These methods of purchasing shares generally apply to Class A, Class B, and
Class C shares.
CLASS B SHARES OF RIVERSOURCE ABSOLUTE RETURN CURRENCY AND INCOME FUND IS
CURRENTLY CLOSED TO INVESTORS FOR NEW PURCHASES. CLASS B SHARES FOR RIVERSOURCE
FLOATING RATE FUND, RIVERSOURCE INFLATION PROTECTED SECURITIES FUND, RIVERSOURCE
INTERMEDIATE TAX-EXEMPT FUND, RIVERSOURCE LIMITED DURATION BOND FUND AND
RIVERSOURCE SHORT DURATION U.S. GOVERNMENT FUND ARE CLOSED TO NEW INVESTORS AND
NEW PURCHASES. EXISTING SHAREHOLDERS IN THESE FUNDS MAY CONTINUE TO OWN CLASS B
SHARES AND MAKE EXCHANGES INTO AND OUT OF EXISTING ACCOUNTS WHERE CLASS B SHARES
OF THESE FUNDS ARE MAINTAINED.
ACCOUNT ESTABLISHED WITH YOUR FINANCIAL INTERMEDIARY
ALL REQUESTS The financial intermediary through which you buy shares may
have different policies not described in this prospectus,
including different minimum investment amounts and minimum
account balances.
-------------------------------------------------------------------------------
C.15
METHODS OF PURCHASING SHARES (CONTINUED)
ACCOUNT ESTABLISHED WITH THE FUND
BY MAIL You or the financial intermediary through which you buy
shares may establish an account with the fund. To establish
an account in this fashion, complete a fund account
application with your financial advisor or investment
professional, and mail the account application to the address
below. Account applications may be obtained (for RiverSource
funds) at riversource.com/funds or (for Seligman funds) at
seligman.com or may be requested by calling (800) 221-2450.
Make your check payable to the fund. The fund does not accept
cash, credit card convenience checks, money orders,
traveler's checks, starter checks, third or fourth party
checks, or other cash equivalents.
Mail your check and completed application to:
REGULAR MAIL RIVERSOURCE FAMILY OF FUNDS
C/O BOSTON FINANCIAL
P.O. BOX 8041
BOSTON, MA 02266-8041
EXPRESS MAIL RIVERSOURCE FAMILY OF FUNDS
C/O BOSTON FINANCIAL
30 DAN ROAD
CANTON, MA 02021-2809
If you already have an account, include your name, account
number, and the name of the fund and class of shares you wish
to purchase along with your check. You can make scheduled
investments in the fund by moving money from your checking
account or savings account. See the Minimum Investment and
Account Balance chart below for more information regarding
scheduled investment plans.
--------------------------------------------------------------------------------
BY WIRE OR ACH Fund shares purchased in an account established and
maintained with the fund may be paid for by federal funds
wire. Before sending a wire, call (800) 221-2450 to notify
the fund's transfer agent of the wire and to receive further
instructions.
If you are establishing an account with a wire purchase, you
are required to send a signed account application to the
address above. Please include the wire control number or your
new account number on the application. Your bank or financial
intermediary may charge additional fees for wire
transactions.
--------------------------------------------------------------------------------
BY EXCHANGE Call (800) 221-2450 or send signed written instructions to
the address above.
--------------------------------------------------------------------------------
C.16
MINIMUM INVESTMENT AND ACCOUNT BALANCE
RIVERSOURCE RIVERSOURCE
120/20 DISCIPLINED
CONTRARIAN SMALL CAP
EQUITY FUND VALUE FUND
THREADNEEDLE RIVERSOURCE
FOR ALL FUNDS, GLOBAL EXTENDED FLOATING RATE
CLASSES AND ALPHA FUND FUND
ACCOUNTS EXCEPT RIVERSOURCE RIVERSOURCE
THOSE LISTED TO ABSOLUTE RETURN INFLATION
THE RIGHT TAX QUALIFIED CURRENCY AND PROTECTED
(NONQUALIFIED) ACCOUNTS INCOME FUND SECURITIES FUND CLASS W
---------------------------------------------------------------------------------------------------------------
INITIAL INVESTMENT $2,000 $1,000 $10,000 $5,000 $500
---------------------------------------------------------------------------------------------------------------
ADDITIONAL INVESTMENTS $100 $100 $100 $100 None
---------------------------------------------------------------------------------------------------------------
ACCOUNT BALANCE* $1,000 None $5,000 $2,500 $500
*If your fund account balance falls below the minimum account balance for
any reason, including a market decline, you may be asked to increase it to
the minimum account balance or establish a scheduled investment plan. If
you do not do so within 30 days, your shares may be automatically redeemed
and the proceeds mailed to you.
-------------------------------------------------------------------------------
MINIMUM INVESTMENT AND ACCOUNT BALANCE -- SCHEDULED INVESTMENT PLANS
RIVERSOURCE RIVERSOURCE
120/20 DISCIPLINED
CONTRARIAN SMALL CAP
EQUITY FUND VALUE FUND
THREADNEEDLE RIVERSOURCE
FOR ALL FUNDS, GLOBAL EXTENDED FLOATING RATE
CLASSES AND ALPHA FUND FUND
ACCOUNTS EXCEPT RIVERSOURCE RIVERSOURCE
THOSE LISTED TO ABSOLUTE RETURN INFLATION
THE RIGHT TAX QUALIFIED CURRENCY AND PROTECTED
(NONQUALIFIED) ACCOUNTS INCOME FUND SECURITIES FUND CLASS W
---------------------------------------------------------------------------------------------------------------
INITIAL INVESTMENT $100(a) $100(b) $10,000 $5,000 $500
---------------------------------------------------------------------------------------------------------------
ADDITIONAL INVESTMENTS $100 $50 $100 $100 None
---------------------------------------------------------------------------------------------------------------
ACCOUNT BALANCE** None(b) None $5,000 $2,500 $500
**If your fund account balance is below the minimum initial investment
described above, you must make payments at least monthly.
(a)Money Market Funds -- $2,000
(b)Money Market Funds -- $1,000
-------------------------------------------------------------------------------
These minimums may be waived for accounts that are managed by an investment
professional, for accounts held in approved discretionary or non-discretionary
wrap programs, for accounts that are a part of an employer-sponsored retirement
plan, or for other account types if approved by the distributor.
The fund reserves the right to modify its minimum account requirements at any
time, with or without prior notice.
Please contact your financial intermediary for information regarding wire or
electronic funds transfer.
IMPORTANT: Payments sent by electronic fund transfers (ACH), a bank
authorization or check that are not guaranteed may take up to 14 days to clear.
If you request a sale within 14 days of purchase, this may cause your sale
request to fail to process if the requested amount includes unguaranteed funds.
EXCHANGING OR SELLING SHARES
You may exchange or sell shares by having your financial intermediary process
your transaction. If you maintain your account directly with your financial
intermediary, you must contact that financial intermediary to exchange or sell
shares of the fund. If your account was established with the fund, there are a
variety of methods you may use to exchange or sell shares of the fund.
WAYS TO REQUEST AN EXCHANGE OR SALE OF SHARES
ACCOUNT ESTABLISHED WITH YOUR FINANCIAL INTERMEDIARY
ALL REQUESTS You can exchange or sell shares by having your financial
intermediary process your transaction. The financial
intermediary through which you purchased shares may have
different policies not described in this prospectus,
including different transaction limits, exchange policies and
sale procedures.
--------------------------------------------------------------------------------
C.17
WAYS TO REQUEST AN EXCHANGE OR SALE OF SHARES (CONTINUED)
ACCOUNT ESTABLISHED WITH THE FUND
BY MAIL Mail your exchange or sale request to:
REGULAR MAIL RIVERSOURCE FAMILY OF FUNDS
C/O BOSTON FINANCIAL
P.O. BOX 8041
BOSTON, MA 02266-8041
EXPRESS MAIL RIVERSOURCE FAMILY OF FUNDS
C/O BOSTON FINANCIAL
30 DAN ROAD
CANTON, MA 02021-2809
Include in your letter:
- your name
- the name of the fund(s)
- your account number
- the class of shares to be exchanged or sold
- your Social Security number or Employer Identification
number
- the dollar amount or number of shares you want to exchange
or sell
- specific instructions regarding delivery or exchange
destination
- signature(s) of registered account owner(s)
- any special documents the transfer agent may require in
order to process your order
Corporate, trust or partnership accounts may need to send
additional documents.
Payment will be mailed to the address of record and made
payable to the names listed on the account, unless your
request specifies differently and is signed by all owners.
A Medallion Signature Guarantee is required if:
- Amount is over $50,000.
- You want your check made payable to someone other than the
registered account owner(s).
- Your address of record has changed within the last 30 days.
- You want the check mailed to an address other than the
address of record.
- You want the proceeds sent to a bank account not on file.
- You are the beneficiary of the account and the account
owner is deceased (additional documents may be required).
A Medallion Signature Guarantee assures that a signature is
genuine and not a forgery. The financial intermediary
providing the Guarantee is financially liable for the
transaction if the signature is a forgery. Eligible
guarantors include commercial banks, trust companies, savings
associations, and credit unions as defined by the Federal
Deposit Insurance Act. Note: A guarantee from a notary public
is not acceptable.
NOTE: Any express mail delivery charges you pay will vary
depending on domestic or international delivery instructions.
--------------------------------------------------------------------------------
BY TELEPHONE Call (800) 221-2450. Unless you elect not to have telephone
exchange and sale privileges, they will automatically be
available to you. Reasonable procedures will be used to
confirm authenticity of telephone exchange or sale requests.
Telephone privileges may be modified or discontinued at any
time. Telephone exchange and sale privileges automatically
apply to all accounts except custodial, corporate, qualified
retirement accounts and trust accounts which the current
trustee is not listed. You may request that these privileges
NOT apply by writing to the address above.
Payment will be mailed to the address of record and made
payable to the names listed on the account.
Telephone sale requests are limited to $50,000 per day.
--------------------------------------------------------------------------------
C.18
WAYS TO REQUEST AN EXCHANGE OR SALE OF SHARES (CONTINUED)
ACCOUNT ESTABLISHED WITH THE FUND (CONT.)
BY WIRE OR ACH You can wire money from your fund account to your bank
account. Make sure we have your bank account information on
file. If we do not have this information, you will need to
send written instructions with your bank's name and a voided
check or savings account deposit slip.
Call (800) 221-2450 or send a letter of instruction, with a
Medallion Signature Guarantee if required, to the address
above.
A service fee may be charged against your account for each
wire sent.
Minimum amount:
by ACH: $100
by wire: $500
Your bank or financial intermediary may charge additional
fees for wire transactions.
--------------------------------------------------------------------------------
BY SCHEDULED You may elect to receive regular periodic payments through an
PAYOUT PLAN automatic sale of shares. See the SAI for more information.
--------------------------------------------------------------------------------
CHECK REDEMPTION SERVICE
Class A shares of the money market funds offer check writing privileges. If you
have $2000 in a money market fund, you may request checks which may be drawn
against your account. You can elect this service on your initial application,
or, thereafter. Call (800) 221-2450 for the appropriate forms to establish this
service. If you own Class A shares that were both in another fund at NAV because
of the size of the purchase, and then exchanged into a money market fund, check
redemptions may be subject to a CDSC.
EXCHANGES
Generally, you may exchange your fund shares for shares of the same class of any
other publicly offered fund in the RiverSource Family of Funds without a sales
charge. For complete information on the fund you are exchanging into, including
fees and expenses, read that fund's prospectus carefully. Your exchange will be
priced at the next NAV calculated after your transaction request is received in
good order. You may be subject to a sales charge if you exchange from a money
market fund into an equity or fixed income fund.
IF YOU HOLD YOUR FUND SHARES IN AN ACCOUNT WITH AMERIPRISE FINANCIAL SERVICES,
YOU MAY HAVE LIMITED EXCHANGEABILITY WITHIN THE RIVERSOURCE FAMILY OF FUNDS.
MARKET TIMING
SHORT-TERM TRADING AND OTHER SO-CALLED MARKET TIMING PRACTICES ARE FREQUENT
TRADING PRACTICES BY CERTAIN SHAREHOLDERS INTENDED TO PROFIT AT THE EXPENSE OF
OTHER SHAREHOLDERS BY SELLING SHARES OF A FUND SHORTLY AFTER PURCHASE. MARKET
TIMING MAY ADVERSELY IMPACT A FUND'S PERFORMANCE BY PREVENTING THE INVESTMENT
MANAGER FROM FULLY INVESTING THE ASSETS OF THE FUND, DILUTING THE VALUE OF
SHARES HELD BY LONG-TERM SHAREHOLDERS, OR INCREASING THE FUND'S TRANSACTION
COSTS.
FOR A FUND ORGANIZED AS A FUND-OF-FUNDS, ITS ASSETS CONSIST PRIMARILY OF SHARES
OF THE UNDERLYING FUNDS IN WHICH IT INVESTS. THE UNDERLYING FUNDS MAY BE MORE
SUSCEPTIBLE TO THE RISKS OF MARKET TIMING. FUNDS THAT INVEST DIRECTLY IN
SECURITIES THAT TRADE INFREQUENTLY MAY BE VULNERABLE TO MARKET TIMERS WHO SEEK
TO TAKE ADVANTAGE OF INEFFICIENCIES IN THE SECURITIES MARKETS. FUNDS AND THE
UNDERLYING FUNDS THAT INVEST IN SECURITIES THAT TRADE ON OVERSEAS SECURITIES
MARKETS MAY BE VULNERABLE TO MARKET TIMERS WHO SEEK TO TAKE ADVANTAGE OF CHANGES
IN THE VALUES OF SECURITIES BETWEEN THE CLOSE OF OVERSEAS MARKETS AND THE CLOSE
OF U.S. MARKETS, WHICH IS GENERALLY THE TIME AT WHICH A FUND'S NAV IS
CALCULATED. TO THE EXTENT THAT A FUND OR UNDERLYING FUND HAS SIGNIFICANT
HOLDINGS OF SMALL CAP STOCKS, FLOATING RATE LOANS, HIGH YIELD BONDS, TAX-EXEMPT
SECURITIES OR FOREIGN SECURITIES, THE RISKS OF MARKET TIMING MAY BE GREATER FOR
THE FUND THAN FOR OTHER FUNDS. SEE "PRINCIPAL INVESTMENT STRATEGIES" FOR A
DISCUSSION OF THE TYPES OF SECURITIES IN WHICH YOUR FUND INVESTS. SEE "PRICING
AND VALUING OF FUND SHARES" FOR A DISCUSSION OF THE FUNDS' POLICY ON FAIR VALUE
PRICING, WHICH IS INTENDED, IN PART, TO REDUCE THE FREQUENCY AND EFFECT OF
MARKET TIMING.
C.19
THE FUNDS' BOARD HAS ADOPTED A POLICY THAT IS DESIGNED TO DETECT AND DETER
MARKET TIMING THAT MAY BE HARMFUL TO THE FUNDS. EACH FUND SEEKS TO ENFORCE THIS
POLICY THROUGH ITS SERVICE PROVIDERS AS FOLLOWS:
- The fund tries to distinguish market timing from trading that it believes is
not harmful, such as periodic rebalancing for purposes of asset allocation or
dollar cost averaging or other purchase and exchange transactions not believed
to be inconsistent with the best interest of fund shareholders or the Board's
policy. The fund uses a variety of techniques to monitor for and detect
abusive trading practices. These techniques may vary depending on the type of
fund, the class of shares and where the shares are maintained. Under the
fund's procedures, there is no set number of transactions in the fund that
constitutes market timing. Even one purchase and subsequent sale by related
accounts may be market timing. Generally, the fund seeks to restrict the
exchange privilege of an investor who makes more than three exchanges into or
out of the fund in any 90-day period. Accounts held by a retirement plan or a
financial intermediary for the benefit of its participants or clients, which
typically engage in daily transactions, are not subject to this limit,
although the fund may seek the assistance of financial intermediaries in
applying similar restrictions on their participants or clients. The fund's
ability to monitor and discourage abusive trading practices in omnibus
accounts is more limited.
- The fund may rely on the monitoring policy of a financial intermediary, for
example, a retirement plan administrator or similar financial intermediary
authorized to distribute the funds, if it determines the policy and procedures
of such financial intermediaries are sufficient to protect the fund and its
shareholders.
- If an investor's trading activity is determined to be market timing or
otherwise harmful to existing shareholders, the fund reserves the right to
modify or discontinue the investor's exchange privilege or reject the
investor's purchases or exchanges, including purchases or exchanges accepted
by a financial intermediary. The fund may treat accounts it believes to be
under common control as a single account for these purposes, although it may
not be able to identify all such accounts.
- Although the fund does not knowingly permit market timing, it cannot guarantee
that it will be able to identify and restrict all short-term trading activity.
The fund receives purchase and sale orders through financial intermediaries
where market timing activity may not always be successfully detected.
Other exchange policies:
- Exchanges must be made into the same class of shares of the share class being
exchanged out of.
- Exchanges into RiverSource Tax-Exempt Money Market Fund may be made only from
Class A shares.
- If your exchange creates a new account, it must satisfy the minimum investment
amount for new purchases.
- Once the fund receives your exchange request, you cannot cancel it after the
market closes.
- Shares of the purchased fund may not be used on the same day for another
exchange or sale.
- New investments in Class A shares of a money market fund may be exchanged for
either Class A, Class B or Class C shares of any other publicly offered fund
in the RiverSource Family of Funds.
- If you exchange shares from Class A shares of a money market fund to another
fund in the RiverSource Family of Funds, any further exchanges must be between
shares of the same class. For example, if you exchange from Class A shares of
a money market fund into Class B shares of another fund in the RiverSource
Family of Funds, you may not exchange from Class B shares of that fund back to
Class A shares of a money market fund. Exchange rules for money market funds
are illustrated in the following tables.
- Shares of Class W originally purchased, but no longer held in a discretionary
managed account, may not be exchanged for Class W shares of another fund. You
may continue to hold these shares in the fund. Changing your investment to a
different fund will be treated as a sale and purchase, and you will be subject
to applicable taxes on the sale and sales charges on the purchase of the new
fund.
- If your shares are subject to a CDSC, you will not be charged a CDSC upon the
exchange of those shares. Any CDSC will be deducted when you sell the shares
you received from the exchange. The CDSC imposed at that time will be based on
the period that begins when you bought shares of the original fund and ends
when you sell the shares of the fund you exchanged to.
C.20
<Table>
<Caption>
TO OTHER FUNDS
FROM A MONEY MARKET FUND -----------------------------
CLASS A CLASS B CLASS C
------------------------------------------------------------------------------------------------
Class A Yes Yes Yes
Class B No Yes No
Class C No No Yes
</Table>
<Table>
<Caption>
TO A MONEY MARKET FUND
FROM OTHER FUNDS -----------------------------
CLASS A CLASS B CLASS C
------------------------------------------------------------------------------------------------
Class A Yes No No
Class B No Yes No
Class C No No Yes
</Table>
If your initial investment was in a money market fund and you exchange into an
equity or fixed income fund, you will pay an initial sales charge if you
exchange into Class A and be subject to a CDSC if you exchange into Class B or
Class C.
If your initial investment was in Class A shares of an equity or fixed income
fund and you exchange shares into a money market fund, you may exchange that
amount to another fund, including dividends earned on that amount, without
paying a sales charge.
SELLING SHARES
You may sell your shares at any time. The payment will be sent within seven days
after your request is received in good order.
When you sell shares, the amount you receive may be more or less than the amount
you invested. Your sale price will be the next NAV calculated after your request
is received in good order, minus any applicable CDSC.
REPURCHASES. You can change your mind after requesting a sale of shares and use
all or part of the sale proceeds to purchase new shares of a fund in the
RiverSource Family of Funds. If your original purchase was in Class A or Class
B, you may use all or part of the sale proceeds to purchase new Class A shares
in any fund account linked together for ROA purposes. Your repurchase will be in
Class A shares at NAV, up to the amount of the sale proceeds. For a Class A
repurchase on shares that were originally charged a CDSC, the amount of the CDSC
will be reinvested at the NAV on the date the repurchase is processed.
Repurchases of Class B shares will also be in Class A shares at NAV. Any CDSC
paid upon redemption of your Class B shares will not be reimbursed. If your
original purchase was in Class C, you will be allowed to reinvest in the same
Class C account and fund you originally purchased. In a Class C repurchase, the
CDSC you paid will be reinvested and the shares will be deemed to have the
original cost and purchase date for purposes of applying the CDSC (if any) to
subsequent redemptions. Systematic withdrawals and purchases will be excluded
from this policy.
In order for you to take advantage of this repurchase waiver, you must notify
your financial intermediary or the fund's transfer agent if your account is held
at the fund within 90 days of the date your sale request was processed. Contact
your financial intermediary for information on required documentation. The
repurchase privilege may be modified or discontinued at any time and use of this
option may have tax consequences.
If you sold shares of a Seligman fund on or before February 3, 2009 and wish to
repurchase shares, you have the option of taking advantage of the current
repurchase policy (described above) within 90 days of the date your sale request
was processed, or you may use all or part of your sale proceeds to purchase
shares of the fund you sold or any other fund in the RiverSource Family of Funds
without paying an initial sales charge or, if you paid a CDSC when you sold your
shares, receiving a credit for the applicable CDSC, within 120 days of the date
your sale request was processed. Contact your financial intermediary or, if you
opened an account directly with the fund, the transfer agent, for more
information on the required documentation to complete a repurchase transaction.
The fund reserves the right to redeem in kind.
For more details and a description of other sales policies, please see the SAI.
C.21
PRICING AND VALUING OF FUND SHARES
For classes of shares sold with an initial sales charge, the public offering or
purchase price is the net asset value plus the sales charge. For funds or
classes of shares sold without an initial sales charge, the public offering
price is the NAV.
Orders in good form are priced at the NAV next determined after you place your
order. Good form or good order means that your instructions have been received
in the form required by the fund. This may include, for example, providing the
fund name and account number, the amount of the transaction and all required
signatures.
The NAV is the value of a single share of the fund. The NAV is determined by
dividing the value of the fund's assets, minus any liabilities, by the number of
shares outstanding. The NAV is calculated as of the close of business on the New
York Stock Exchange (NYSE), normally 4:00 p.m. Eastern time, on each day that
the NYSE is open. For a fund organized as a fund-of-funds, the assets will
consist primarily of shares of the underlying funds, which are valued at their
NAVs. Securities are valued primarily on the basis of market quotations and
floating rate loans are valued primarily on the basis of indicative bids. Both
market quotations and indicative bids are obtained from outside pricing services
approved and monitored under procedures adopted by the Board. Certain short-term
securities with maturities of 60 days or less are valued at amortized cost.
When reliable market quotations or indicative bids are not readily available,
investments are priced at fair value based on procedures adopted by the Board.
These procedures are also used when the value of an investment held by a fund or
underlying fund is materially affected by events that occur after the close of a
securities market but prior to the time as of which the fund's or underlying
fund's NAV is determined. Valuing investments at fair value involves reliance on
judgment. The fair value of an investment is likely to differ from any available
quoted or published price. To the extent that a fund or an underlying fund has
significant holdings of small cap stocks, high yield bonds, floating rate loans,
tax-exempt securities or foreign securities that may trade infrequently, fair
valuation may be used more frequently than for other funds. The funds use an
unaffiliated service provider to assist in determining fair values for foreign
securities.
Foreign investments are valued in U.S. dollars. Some of a fund's or an
underlying fund's securities may be listed on foreign exchanges that trade on
weekends or other days when the fund does not price its shares. In that event,
the NAV of the fund's or underlying fund's shares may change on days when
shareholders will not be able to purchase or sell the fund's or underlying
fund's shares.
For money markets funds -- The fund's investments are valued at amortized cost,
which approximates market value, as explained in the SAI. Although the fund
cannot guarantee it will always be able to maintain a constant net asset value
of $1 per share, it will use its best efforts to do so.
DISTRIBUTIONS AND TAXES
As a shareholder you are entitled to your share of your fund's net income and
net gains. Each fund distributes dividends and capital gains to qualify as a
regulated investment company and to avoid paying corporate income and excise
taxes.
DIVIDENDS AND CAPITAL GAIN DISTRIBUTIONS
Your fund's net investment income is distributed to you as dividends. Dividends
may be composed of qualified dividend income, which is eligible for preferential
tax rates under current tax law, as well as other ordinary dividend income,
which may include dividends which are non-qualified dividends, interest income
and short-term capital gains. Because of the types of income earned by fixed
income funds, it is unlikely the funds will distribute qualified dividend
income. Generally, capital gains are realized when a security is sold for a
higher price than was paid for it. Generally, capital losses are realized when a
security is sold for a lower price than was paid for it. Typically, each
realized capital gain or loss is long-term or short-term depending on the length
of time the fund held the security. Realized capital gains and losses offset
each other. The fund offsets any net realized capital gains by any available
capital loss carryovers. Net short-term capital gains, if any, are included in
net investment income and are taxable as ordinary income when distributed to the
shareholder. Net realized long-term capital gains, if any, are distributed by
the end of the calendar year as capital gain distributions. If the fund's
distributions exceed its current and accumulated earnings and profits, that
portion of the fund's distributions will be treated as a return of capital to
the shareholders to the extent of their basis in their shares. A return of
capital will generally not be taxable; however, any amounts received in excess
of basis are treated as capital gain. Forms 1099 sent to shareholders report any
return of capital.
Certain derivative instruments subject the fund to special tax rules, the effect
of which may be to accelerate income to the fund, defer fund losses, cause
adjustments in the holding periods of fund securities, convert capital gains
into ordinary income and convert short-term capital losses into long-term
capital losses. These rules could therefore affect the amount, timing and
character of distributions to shareholders.
For Seligman TargETFund 2045, Seligman TargETFund 2035, Seligman TargETFund
2025, Seligman TargETF 2015 and Seligman TargETFund Core (the Seligman
TargETFunds) -- The Funds may purchase or sell (write) options. In general,
C.22
option premiums which may be received by the Funds are not immediately included
in the income of the Funds. Instead, such premiums are taken into account when
the option contract expires, the option is exercised by the holder, or the Funds
transfer or otherwise terminate the option. If an option written by a Fund is
exercised and such Fund sells or delivers the underlying security, such Fund
generally will recognize capital gain or loss equal to (a) the sum of the
exercise price and the option premium received by the Fund minus (b) the Fund's
basis in the security. Such gain or loss generally will be short-term or long-
term depending upon the holding period of the underlying security. Gain or loss
with respect to any termination of a Fund's obligation under an option other
than through the exercise of the option and the related sale or delivery of the
underlying security generally will be short-term gain or loss. Thus, for
example, if an option written by a Fund expires unexercised, such Fund generally
will recognize short-term gain equal to the premium received.
The Seligman TargETFunds generally will pay any dividends from its net
investment income and distributes any net capital gains realized on investments
at least annually (Seligman TargETFund Core generally will pay dividends from
its net investment income on a quarterly basis). Because each Seligman
TargETFund may sell underlying ETFs, US government securities and short-term
debt instruments: (a) to accommodate redemptions of its shares; (b) in respect
of the Target Date Funds, to implement the process of migration; and (c) to
adjust the percentages of its assets invested in each underlying ETF, US
government securities, short-term debt instruments, cash and cash equivalents in
response to economic, market or other conditions or events, and changes in
Seligman Time Horizon Matrix (the asset allocation methodology utilized by the
Seligman TargETFunds), each Seligman TargETFund may generate net capital gains
(including short-term capital gains that are generally taxed to shareholders at
ordinary income tax rates) for investors that may be higher than the net capital
gains ordinarily incurred by an investor through an investment in another asset
allocation fund that has broader investment ranges or an asset allocation
strategy designed by the investor. In addition, due to federal income tax laws,
each Seligman TargETFund may not fully utilize capital losses (to offset capital
gains) from the sale of underlying ETFs at a loss. In addition, underlying ETFs
may distribute capital gains to the Seligman TargETFunds.
REINVESTMENTS
Dividends and capital gain distributions are automatically reinvested in
additional shares in the same class of the fund unless you request distributions
in cash. The financial intermediary through which you purchased shares may have
different policies.
Distributions are reinvested at the next calculated NAV after the distribution
is paid. If you choose cash distributions, you will receive cash only for
distributions declared after your request has been processed.
TAXES
If you buy shares shortly before the record date of a distribution, you may pay
taxes on money earned by the fund before you were a shareholder. You will pay
the full pre-distribution price for the shares, then receive a portion of your
investment back as a distribution, which may be taxable.
For tax purposes, an exchange is considered a sale and purchase, and may result
in a gain or loss. A sale is a taxable transaction. Generally, if you sell
shares for less than their cost, the difference is a capital loss or if you sell
shares for more than their cost, the difference is a capital gain. Your gain may
be short term (for shares held for one year or less) or long term (for shares
held for more than one year).
You may not create a tax loss or reduce a tax gain, based on paying a sales
charge, by exchanging shares before the 91st day after the day of purchase. If
you buy Class A shares and exchange into another fund before the 91st day after
the day of purchase, you may not be able to include the sales charge in your
calculation of tax gain or loss on the sale of the first fund you purchased. The
sales charge may be included in the calculation of your tax gain or loss on a
subsequent sale of the second fund you purchased. For more information, see the
SAI.
REITs often do not provide complete tax information until after the calendar
year-end; generally mid to late January and continuing through early February.
Consequently, if your fund has significant investments in REITs, you may not
receive your Form 1099-DIV until February. Other RiverSource funds tax
statements are generally mailed in January.
FOR SELIGMAN TARGETFUNDS. Each of the Target Date Funds will automatically be
combined with Seligman TargETFund Core during their respective target years. The
investment manager expects each of these combinations to be effected as an
acquisition of the assets and liabilities of the applicable Target Date Fund in
exchange for shares of Seligman TargETFund Core at net asset value, with the
shares of Seligman TargETFund Core then distributed to shareholders of the
applicable Target Date Fund. Based on current tax rules, the investment manager
expects the combination to be effected in a non-taxable transaction. Changes in
such tax rules or other applicable law could negatively impact the combination
of a Target Date Fund with Seligman TargETFund Core.
FOR TAXABLE FUNDS. Distributions related to shares not held in IRAs or other
retirement accounts are subject to federal income tax and may be subject to
state and local taxes in the year they are declared. You must report
distributions on your tax returns, even if they are reinvested in additional
shares.
C.23
Shares held in an IRA or qualified retirement account are generally subject to
different tax rules. Taking a distribution from your IRA or qualified retirement
plan may subject you to federal taxes, withholding, penalties and reporting
requirements. Please consult your tax advisor.
Income received by a fund may be subject to foreign tax and withholding. Tax
conventions between certain countries and the U.S. may reduce or eliminate these
taxes.
FOR TAX-EXEMPT FUNDS. Dividends distributed from interest earned on tax-exempt
securities (exempt-interest dividends) are exempt from federal income taxes but
may be subject to state and local taxes and potentially the alternative minimum
tax. Dividends distributed from net capital gains, if any, and other income
earned are not exempt from federal income taxes. Any taxable distributions are
taxable in the year the fund declares them regardless of whether you take them
in cash or reinvest them.
Interest on certain private activity bonds is a preference item for purposes of
the individual and corporate alternative minimum tax. To the extent the fund
earns such income, it will flow through to its shareholders and may affect those
shareholders who are subject to the alternative minimum tax. See the SAI for
more information.
Because interest on municipal bonds and notes is tax-exempt for federal income
tax purposes, any interest on money you borrow that is used directly or
indirectly to purchase fund shares is not deductible on your federal income tax
return. You should consult a tax advisor regarding its deductibility for state
and local income tax purposes.
FOR A FUND ORGANIZED AS A FUND-OF-FUNDS. Because most of the fund's investments
are shares of underlying funds, the tax treatment of the fund's gains, losses,
and distributions may differ from the tax treatment that would apply if either
the fund invested directly in the types of securities held by the underlying
funds or the fund shareholders invested directly in the underlying funds. As a
result, fund shareholders may recognize higher amounts of capital gain
distributions or ordinary income dividends than they otherwise would.
IMPORTANT: This information is a brief and selective summary of some of the tax
rules that apply to an investment in a fund. Because tax matters are highly
individual and complex, you should consult a qualified tax advisor.
GENERAL INFORMATION
AVAILABILITY AND TRANSFERABILITY OF FUND SHARES
Please consult with your financial intermediary to determine the availability of
the funds. The funds may only be purchased or sold directly or through financial
intermediaries authorized by the distributor to offer the funds. NOT ALL
FINANCIAL INSTITUTIONS ARE AUTHORIZED TO SELL THE RIVERSOURCE FAMILY OF FUNDS
AND CERTAIN FINANCIAL INTERMEDIARIES THAT OFFER THE RIVERSOURCE FAMILY OF FUNDS
MAY NOT OFFER ALL FUNDS ON ALL INVESTMENT PLATFORMS. If you set up an account at
a financial intermediary that does not have, and is unable to obtain, a selling
agreement with the distributor, you will not be able to transfer fund holdings
to that account. In that event, you must either maintain your fund holdings with
your current financial intermediary, find another financial intermediary with a
selling agreement, or sell your shares, paying any applicable CDSC. Please be
aware that transactions in taxable accounts are taxable events and may result in
income tax liability.
ADDITIONAL SERVICES AND COMPENSATION
In addition to acting as the fund's investment manager, RiverSource Investments
and its affiliates also receive compensation for providing other services to the
funds.
Administration Services. Ameriprise Financial, 200 Ameriprise Financial Center,
Minneapolis, Minnesota 55474, provides or compensates others to provide
administrative services to the funds. These services include administrative,
accounting, treasury, and other services. Fees paid by a fund for these services
are included under "Other expenses" in the expense table under "Fees and
Expenses."
Distribution and Shareholder Services. RiverSource Fund Distributors, Inc.,
50611 Ameriprise Financial Center, Minneapolis, Minnesota 55474, (the
distributor), provides underwriting and distribution services to the funds.
Under the Distribution Agreement and related distribution and shareholder
servicing plans, the distributor receives distribution and shareholder servicing
fees. The distributor may retain a portion of these fees to support its
distribution and shareholder servicing activity. The distributor reallows the
remainder of these fees (or the full fee) to the financial intermediaries that
sell fund shares and provide services to shareholders. Fees paid by a fund for
these services are set forth under "Distribution and/or service (12b-1) fees" in
the expense table under "Fees and Expenses." More information on how these fees
are used is set forth under "Investment Options -- Classes of Shares" and in the
SAI. The distributor also administers any sales charges paid by an investor at
the time of purchase or at the time of sale. See "Shareholder Fees (fees paid
directly from your investment)" under "Fees and Expenses" for the scheduled
sales charge of each share class. See "Buying and Selling Shares, Sales Charges"
for
C.24
variations in the scheduled sales charges, and for how these sales charges are
used by the distributor. See "Other Investment Strategies and Risks" for the
funds' policy regarding directed brokerage.
Transfer Agency Services. RiverSource Service Corporation, 734 Ameriprise
Financial Center, Minneapolis, Minnesota 55474 (the transfer agent or
RiverSource Service Corporation), provides or compensates others to provide
transfer agency services to the funds. The funds pay the transfer agent a fee
that varies by class, as set forth in the SAI, and reimburses the transfer agent
for its out-of-pocket expenses incurred while providing these transfer agency
services to the funds. Fees paid by a fund for these services are included under
"Other expenses" in the expense table under "Fees and Expenses." RiverSource
Service Corporation pays a portion of these fees to financial intermediaries
that provide sub-recordkeeping and other services to fund shareholders. The SAI
provides additional information about the services provided and the fee
schedules for the transfer agent agreements.
Plan Administration Services. Under a Plan Administration Services Agreement,
the fund pays for plan administration services, including services such as
implementation and conversion services, account set-up and maintenance,
reconciliation and account recordkeeping, education services and administration
to various plan types, including 529 plans, retirement plans and Health Savings
Accounts. Fees paid by a fund for these services are included under "Other
expenses" in the expense table under "Fees and Expenses."
PAYMENTS TO FINANCIAL INTERMEDIARIES
The distributor and its affiliates make or support additional cash payments out
of their own resources (including profits earned from providing services to the
fund) to financial intermediaries, in connection with agreements between the
distributor and financial intermediaries pursuant to which these financial
intermediaries sell fund shares and provide services to their clients who are
shareholders of the fund. These payments and intercompany allocations
(collectively, "payments") do not change the price paid by investors in the fund
or fund shareholders for the purchase or ownership of fund shares of the fund,
and these payments are not reflected in the fees and expenses of the fund, as
they are not paid by the fund.
In exchange for these payments, a financial intermediary may elevate the
prominence or profile of the fund within the financial intermediary's
organization, and may provide the distributor and its affiliates with preferred
access to the financial intermediary's registered representatives or preferred
access to the financial intermediary's customers. These arrangements are
sometimes referred to as marketing and/or sales support payments, program and/or
shareholder servicing payments, or revenue sharing payments. These arrangements
create potential conflicts of interest between a financial intermediary's
pecuniary interest and its duties to its customers, for example, if the
financial intermediary receives higher payments from the sale of a certain fund
than it receives from the sale of other funds, the financial intermediary or its
representatives may be incented to recommend or sell shares of the fund where it
receives or anticipates receiving the higher payment instead of other investment
options that may be more appropriate for the customer. Employees of Ameriprise
Financial and its affiliates, including employees of affiliated broker-dealers,
may be separately incented to recommend or sell shares of the fund, as employee
compensation and business unit operating goals at all levels are tied to the
company's success. Certain employees, directly or indirectly, may receive higher
compensation and other benefits as investment in the fund increases. In
addition, management, sales leaders and other employees may spend more of their
time and resources promoting Ameriprise Financial and its subsidiary companies,
including RiverSource Investments and the distributor, and the products they
offer, including the fund.
These payments are typically negotiated based on various factors including, but
not limited to, the scope and quality of the services provided by the financial
intermediary, its reputation in the industry, its ability to attract and retain
assets, its access to target markets, its customer relationships, the profile
the fund may obtain within the financial intermediary, and the access the
distributor or other representatives of the fund may have within the financial
intermediary for advertisement, training or education, including opportunities
to present at or sponsor conferences for the registered representatives of the
financial intermediary and its customers.
These payments are usually calculated based on a percentage of fund assets owned
through the financial intermediary and/or as a percentage of fund sales
attributable to the financial intermediary. Certain financial intermediaries
require flat fees instead of, or in addition to, these asset-based fees as
compensation for including or maintaining a fund on their platforms, and, in
certain situations, may require the reimbursement of ticket or operational
charges -- fees that a financial intermediary charges its registered
representatives for effecting transactions in the fund. The amount of payment
varies by financial intermediary (e.g., initial platform set-up fees, ongoing
maintenance or service fees, or asset or sales based fees). The amount of
payments also varies by the type of sale. For instance, purchases of one fund
may warrant a greater or lesser amount of payments than purchases of another
fund. Additionally, sale and maintenance of shares on a stand alone basis may
result in a greater or lesser amount of payments than the sale and maintenance
of shares made through a plan, wrap or other fee-based program. Payments to
affiliates may include payments as compensation to employees of RiverSource
Investments who are licensed by the distributor in respect of certain sales and
solicitation activity on behalf of the fund. These payments may be and often are
significant. Additional information concerning the amount and calculation of
these payments is available in the fund's SAI.
C.25
Payments to affiliated broker-dealers are within the range of the payments the
distributor pays to similarly-situated third party financial intermediaries and
the payments such affiliated broker-dealers receive from third party fund
sponsors related to the sale of their sponsored funds. However, because of the
large amount of fund assets (from the RiverSource Family of Funds, in aggregate)
currently held in customer accounts of the affiliated broker-dealers, the
distributor and its affiliates, in the aggregate, pay significantly more in
absolute dollars than other third-party fund sponsors pay to the affiliated
broker-dealers for the sale and servicing of their sponsored funds. This level
of payment creates potential conflicts of interest which the affiliated broker-
dealers seek to mitigate by disclosure and implementation of internal controls,
as well as the rules and regulations of applicable regulators.
From time to time, to the extent permitted by SEC and FINRA rules and by other
applicable laws and regulations, the distributor and its affiliates may make
other reimbursements or payments to financial intermediaries or their registered
representatives, including non-cash compensation, in the form of gifts of
nominal value, occasional meals, tickets, or other entertainment, support for
due diligence trips, training and educational meetings or conference
sponsorships, support for recognition programs, and other forms of non-cash
compensation permissible under regulations to which these financial
intermediaries and their representatives are subject. To the extent these are
made as payments instead of reimbursement, they may provide profit to the
financial intermediary to the extent the cost of such services was less than the
actual expense of the service.
The financial intermediary through which you are purchasing or own shares of the
fund has been authorized directly or indirectly by the distributor to sell the
fund and/or to provide services to you as a shareholder of the fund. Investors
and current shareholders may wish to take such payment arrangements into account
when considering and evaluating any recommendations they receive relating to
fund shares. If you have questions regarding the specific details regarding the
payments your financial intermediary may receive from the distributor or its
affiliates related to your purchase or ownership of the fund, please contact
your financial intermediary. The SAI contains additional detail regarding
payments made by the distributor to financial intermediaries.
The payments described in this section are in addition to fees paid by the fund
to the distributor under 12b-1 plans, which fees may be used to compensate
financial intermediaries for the distribution of fund shares and the servicing
of fund shareholders, or paid by the fund to the transfer agent under the
transfer agent agreement or plan administration agreement, which fees may be
used to support networking or servicing fees to compensate financial
intermediaries for supporting shareholder account maintenance, sub-accounting,
plan recordkeeping or other services provided directly by the financial
intermediary to shareholders or plans and plan participants, including
retirement plans, 529 plans, Health Savings Account plans, or other plans, where
participants beneficially own shares of the fund.
Financial institutions may separately charge you additional fees. See "Buying
and Selling Shares."
ADDITIONAL MANAGEMENT INFORMATION
AFFILIATED PRODUCTS. RiverSource Investments serves as investment manager to all
funds in the RiverSource Family of Funds, including those that are structured to
provide asset-allocation services to shareholders of those funds by investing in
shares of other funds (funds of funds) in the RiverSource Family of Funds
(collectively referred to as underlying funds) and to discretionary managed
accounts (collectively referred to as affiliated products) that invest
exclusively in underlying funds. These affiliated products, individually or
collectively, may own a significant percentage of the outstanding shares of the
underlying funds, and RiverSource Investments seeks to balance potential
conflicts between the affiliated products and the underlying funds in which they
invest. The affiliated products investment in the underlying funds may also have
the effect of creating economies of scale (including lower expense ratios)
because the affiliated products may own substantial portions of the shares of
underlying funds and, comparatively, a redemption of underlying fund shares by
one or more affiliated products could cause the expense ratio of an underlying
fund to increase as its fixed costs would be spread over a smaller asset base.
Because of these large positions of the affiliated products, the underlying
funds may experience relatively large purchases or redemptions. Although
RiverSource Investments may seek to minimize the impact of these transactions,
for example, by structuring them over a reasonable period of time or through
other measures, underlying funds may experience increased expenses as they buy
and sell securities to manage these transactions. When RiverSource Investments
structures transactions over a reasonable period of time in order to manage the
potential impact of the buy and sell decisions for the affiliated products,
these affiliated products, including funds of funds, may pay more or less for
shares of the underlying funds than if the transactions were executed in one
transaction. In addition, substantial redemptions by the affiliated products
within a short period of time could require the underlying fund to liquidate
positions more rapidly than would otherwise be desirable, which may have the
effect of reducing or eliminating potential gain or causing the underlying fund
to realize a loss. Substantial redemptions may also adversely affect the ability
of the investment manager to implement the underlying fund's investment
strategy. RiverSource Investments also has an economic conflict of interest in
determining the allocation of the affiliated products' assets among the
underlying funds as it earns different fees from the underlying funds.
RiverSource Investments monitors expense levels of the funds and is committed to
offering funds that are competitively priced. RiverSource
C.26
Investments reports to the Board on the steps it has taken to manage any
potential conflicts. See the SAI for information on the percent of the fund
owned by affiliated products.
CASH RESERVES. A fund may invest its daily cash balance in a money market fund
selected by RiverSource Investments, including but not limited to RiverSource
Short-Term Cash Fund (Short-Term Cash Fund), a money market fund established for
the exclusive use of funds in the RiverSource Family of Funds and other
institutional clients of RiverSource Investments. While Short-Term Cash Fund
does not pay an advisory fee to RiverSource Investments, it does incur other
expenses, and is expected to operate at a very low expense ratio. A fund will
invest in Short-Term Cash Fund or any other money market fund selected by
RiverSource Investments only to the extent it is consistent with the fund's
investment objectives and policies. Short-Term Cash Fund is not insured or
guaranteed by the FDIC or any other government agency.
FUND HOLDINGS DISCLOSURE. The Board has adopted policies and procedures that
govern the timing and circumstances of disclosure to shareholders and third
parties of information regarding the securities owned by a fund. A description
of these policies and procedures is included in the SAI.
LEGAL PROCEEDINGS. Ameriprise Financial and certain of its affiliates have
historically been involved in a number of legal, arbitration and regulatory
proceedings, including routine litigation, class actions, and governmental
actions, concerning matters arising in connection with the conduct of their
business activities. Ameriprise Financial believes that the fund is not
currently the subject of, and that neither Ameriprise Financial nor any of its
affiliates are the subject of, any pending legal, arbitration or regulatory
proceedings that are likely to have a material adverse effect on the fund or the
ability of Ameriprise Financial or its affiliates to perform under their
contracts with the fund. Information regarding certain pending and settled legal
proceedings may be found in the fund's shareholder reports and in the SAI.
Additionally, Ameriprise Financial is required to make 10-Q, 10-K and, as
necessary, 8-K filings with the Securities and Exchange Commission on legal and
regulatory matters that relate to Ameriprise Financial and its affiliates.
Copies of these filings may be obtained by accessing the SEC website at
www.sec.gov.
C.27
EXHIBIT D
COMPARISON OF ORGANIZATIONAL DOCUMENTS
This chart highlights material differences between the terms of the Articles of
Incorporation and By-Laws of the Funds organized as Maryland Corporations and
those organized as Minnesota Corporations, as follows:
<Table>
<Caption>
FUNDS ORGANIZED AS A MINNESOTA CORPORATION: FUNDS ORGANIZED AS A MARYLAND CORPORATION:
------------------------------------------- ---------------------------------------------------------
- RiverSource Mid Cap Growth Fund, Buying Fund, a series - RiverSource Government Money Market Fund, Inc., Buying
of RiverSource Equity Series, Inc. Fund
- RiverSource Mid Cap Value Fund, Buying Fund, a series - Seligman Frontier Fund, Inc., Buying Fund
of RiverSource Investment Series, Inc.
- RiverSource Partners Aggressive Growth Fund, Selling - Seligman Global Smaller Companies Fund, Selling Fund, a
Fund, a series of RiverSource Managers Series, Inc. series of Seligman Global Fund Series, Inc.
- RiverSource Partners International Small Cap Fund, - Seligman Smaller-Cap Value Fund, Buying Fund, a Series
Selling Fund, a series of RiverSource Managers Series, of Seligman Value Fund Series, Inc.
Inc.
- RiverSource Partners Select Value Fund, Selling Fund, a
series of RiverSource Managers Series, Inc.
- RiverSource Partners Small Cap Equity Fund, Selling
Fund, a series of RiverSource Managers Series, Inc.
- RiverSource Partners Small Cap Growth Fund, Selling
Fund, a series of RiverSource Strategy Series, Inc.
- RiverSource Tax-Exempt Money Market Fund, Selling Fund,
a series of RiverSource Tax-Exempt Money Market Series,
Inc.
</Table>
<Table>
<Caption>
--------------------------------------------------------------------------------------------------
FUNDS ORGANIZED AS A MARYLAND FUNDS ORGANIZED AS A MINNESOTA
POLICY CORPORATION CORPORATION
--------------------------------------------------------------------------------------------------
SHAREHOLDER Under the Maryland General Corporation Under Minnesota law, a shareholder's
LIABILITY: Law ("MGCL"), a stockholder of a liability to the corporation or its
corporation is not obligated to the creditors is limited to paying the
corporation or its creditors with amount agreed to be paid for the shares
respect to the stock, except to the which the shareholder holds or has
extent that the subscription price or agreed to purchase.
other agreed upon price for the stock
has not been paid or liability is
otherwise imposed under the MGCL.
--------------------------------------------------------------------------------------------------
SHAREHOLDER On each matter submitted to vote of the At all meetings of the shareholders,
VOTING stockholders, each holder of a share of each shareholder of record entitled to
RIGHTS: any series or class issued by the vote is entitled to one vote for each
corporation ("Common Stock") is dollar of net asset value (number of
entitled to one vote for each share shares owned times net asset value per
standing held irrespective of the share) and each fractional dollar
series of Common Stock ("Series") and amount is entitled to a proportionate
all shares of all Series will vote as a fractional vote.
single class ("Single Class Voting");
except, that (a) as to any matter Shareholders have the power to vote (i)
requiring a separate vote of any Series for the election of directors; (ii) on
by the 1940 Act or would be required most amendments to the corporation's
under the MGCL, the requirements as to Articles of Incorporation and on
a separate vote by that Series apply in certain amendments to the corporation's
lieu of Single Class Voting as By-Laws; (iii) on certain proposed
described above; (b) in the event that mergers and exchanges to which the
the separate vote requirements referred corporation is a party; (iv) on the
to in (a) above apply with respect to proposed sale of all or substantially
one or more Series, then, subject to all of the corporation's property and
(c) below, the shares of all other assets not in the usual and regular
Series will vote as a single class; and course of its business; and (v) on the
(c) as to any matter which does not proposed dissolution of the
affect the interest of a particular corporation.
Series, only the holders of shares of
the one or more affected Series will be At all elections of directors, each
entitled to vote. Holders of shares of shareholder is entitled to as many
Common Stock of the corporation are not votes equal to the number of dollars of
be entitled to cumulative voting in the net asset value of shares owned
election of directors or on any other multiplied by the number of directors
matter. to be elected and may cast all of such
votes for a single director or may
As to any matter with respect to which distribute them among the number to be
a separate vote of any class is voted for, or any two or more of them.
required by the 1940 Act or by MGCL
(including, without limitation, The standard form of certifying
approval of any plan, agreement or resolution creating rights and
other arrangement relating to preferences for series of capital stock
expenses), such requirement as to a provides that each share may be voted
separate vote by the class applies in by series (i) as required by the
lieu of single class voting, and, if provisions of the 1940 Act, as amended,
permitted by the 1940 Act or any rules, and all rules and regulations
regulations or orders thereunder and promulgated thereunder; (ii) when the
MGCL, all classes of a particular Board of Directors (the "Board")
Series vote together as a single class determines that a matter affects series
on any matter that has the same effect in a materially different way; or (iii)
on each class of that Series. As to any when the Board determines a matter
matter that does not affect the affects only one or some of the series.
interest of a particular class, only In addition, under Minnesota law,
the holders of shares of the affected shareholders are entitled to vote as
class are entitled to vote. separate series or classes with respect
to certain amendments to the
corporation's Articles of Incorporation
and on certain mergers and exchanges to
which the corporation is a party.
--------------------------------------------------------------------------------------------------
SHAREHOLDER Regular stockholder meetings are not Regular shareholder meetings are not
MEETINGS: required, unless stockholders are required; however, a majority of
required to meet for the purposes of directors present at a duly held
electing directors pursuant to the 1940 meeting may call a regular meeting of
Act. shareholders by fixing the date, time
and place for a meeting.
The chairman of the board, president,
chief executive officer or Board of
Directors may call a
--------------------------------------------------------------------------------------------------
</Table>
D.1
<Table>
<Caption>
--------------------------------------------------------------------------------------------------
FUNDS ORGANIZED AS A MARYLAND FUNDS ORGANIZED AS A MINNESOTA
POLICY CORPORATION CORPORATION
--------------------------------------------------------------------------------------------------
special meeting of the stockholders. In If a regular meeting of shareholders
addition, a special meeting of has not been held during the
stockholders shall be called by the immediately preceding 15 months, a
secretary of the corporation on the shareholder or shareholders holding
written request of stockholders holding three percent or more of the voting
at least a majority of the voting power power of all shares entitled to vote
of all shares entitled to vote. The may demand a regular meeting of
stockholders must send written notice shareholders by written notice of
to the secretary and other procedural demand given to the chief executive
requirements must be met. officer or chief financial officer.
Within 30 days after receipt of the
The secretary of the Corporation will demand by one of those officers, the
also call a special meeting of the Board must cause a regular meeting of
stockholders on the written request of shareholders to be called and held on
stockholders entitled to cast not less notice no later than 90 days after
than a majority of all the votes receipt of the demand, all at the
entitled to be cast at such meeting. expense of the Fund.
Any stockholder of record seeking to
have stockholders request a special Special meetings of the shareholders
meeting must send written notice to the may be called at any time as provided
secretary (the "Record Date Request for by the laws of the State of
Notice") requesting the Board of Minnesota.
Directors to fix a record date to
determine the stockholders entitled to In addition, a special meeting of
request a special meeting (the "Request shareholders may be called at any time
Record Date"). The Record Date Request by a shareholder or shareholders
Notice must state the purpose of the holding ten percent or more of the
meeting and the matters proposed to be voting power of all shares entitled to
acted on it, signed by one or more vote, except that a special meeting for
stockholders of record as of the date the purpose of considering any action
of signature, bear the date of to directly or indirectly facilitate or
signature of each such stockholder (or effect a business combination must be
their agent) and state all information called by 25% or more of the voting
that must be disclosed in solicitations power of all shares entitled to vote.
of proxies for election of directors in
an election contest (even if an
election contest is not involved), or
is otherwise required, pursuant to
Regulation 14A (or any successor
provision) under the Securities
Exchange Act of 1934, as amended (the
"Exchange Act"). Upon receiving the
Record Date Request Notice, the Board
of Directors may fix a Request Record
Date that may not precede and also not
be more than ten days after the close
of business on the date on which the
resolution fixing the Request Record
Date is adopted by the Board of
Directors. If the Board of Directors,
within ten days after the date on which
a valid Record Date Request Notice is
received, fails to adopt a resolution
fixing the Request Record Date, the
Request Record Date shall be the close
of business on the tenth day after the
first date on which the Record Date
Request Notice is received by the
secretary.
In order for any stockholder to request
a special meeting, one or more written
requests for a special meeting signed
by stockholders of record (or their
agents) as of the Request Record Date
entitled to cast not less than a
majority (the "Special Meeting
Percentage") of all of the votes
entitled to be cast at such meeting
(the "Special Meeting Request") must be
delivered to the secretary.
Additionally, the Special Meeting
Request (a) shall set forth the purpose
of the meeting and the matters proposed
to be acted on at it (which is limited
to the lawful matters set forth in the
Record Date Request Notice received by
the secretary), (b) shall bear the date
of signature of each such stockholder
(or such agent) signing the Special
Meeting Request, (c) shall set forth
the name and address, as they appear in
the Corporation's books, of each
stockholder signing such request (or on
whose behalf the Special Meeting
Request is signed) and the class,
series and number of all shares of
stock of the Corporation which are
owned by each such stockholder, and the
nominee holder for, and number of,
shares owned by such stockholder
beneficially but not of record, (d)
shall be sent to the secretary by
registered mail, return receipt
requested, and (e) shall be received by
the secretary within 60 days after the
Request Record Date. Any stockholder
requesting a special stock holder
meeting may revoke his, her or its
request for a special meeting at any
time by written revocation delivered to
the secretary.
The secretary will inform the
requesting stockholders of the
reasonably estimated cost of preparing
and mailing the notice of meeting
(including the Corporation's proxy
materials). The secretary shall not be
required to call a special meeting upon
stockholder request and such meeting
shall not be held unless, in addition
to the aforementioned documents, the
secretary receives payment of such
reasonably estimated cost prior to the
mailing of any notice of the meeting.
Any stockholder requested meeting may
not be more than 90 days after the
record date for the meeting.
--------------------------------------------------------------------------------------------------
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</Table>
D.2
<Table>
<Caption>
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FUNDS ORGANIZED AS A MARYLAND FUNDS ORGANIZED AS A MINNESOTA
POLICY CORPORATION CORPORATION
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SHAREHOLDER The presence in person or by proxy of The holders of at least ten percent
QUORUM: the holders of record of one-third of (10%) of the shares outstanding and
the shares of all Series and classes entitled to vote, present in person or
issued and outstanding and entitled to by proxy, constitute a quorum, but the
vote at a meeting constitute a quorum holders of a smaller amount may adjourn
except as otherwise provided by law or without further notice, other than by
the Articles of Incorporation. Where notice at the time, until a quorum is
the holders of shares of any Series or secured at any such adjourned meeting.
class are entitled to vote as a Series In case a quorum is not present, the
or class (a "Separate Class") or where meeting may be adjourned without notice
the holders of shares of two or more other than by notice at the meeting. At
(but not all) Series or class are any adjourned meeting at which a quorum
required to vote as a single Series or may be present, any business may be
class (a "Combined Class"), the transacted which might have been
presence in person or by proxy of the transacted at the meeting as originally
holders of one-third of the shares of called.
that Separate Class or Combined Class
issued and outstanding and entitled to
vote at the meeting constitutes a
quorum for that vote.
If a quorum is not present or
represented at the meeting, the holders
of a majority of the shares present in
person or by proxy and entitled to vote
have the power to adjourn the meeting
without notice other than announcement
at the meeting, until a quorum is
present. If, however, such quorum shall
not be present at any meeting of the
stockholders, the stockholders or the
chairman of the meeting shall have the
power to adjourn the meeting from time
to time to a date not more than 120
days after the original record date
without notice other than announcement
at the meeting. At any adjourned
meeting at which a quorum may be
present, any business may be transacted
which might have been transacted at the
meeting as originally called.
The absence from any meeting of
stockholders of the number of shares in
excess of one-third of the shares of
all Series and classes, or of the
affected Series, class or classes, as
the case may be, which may be required
by the laws of the State of Maryland,
the 1940 Act or any other applicable
law or the Articles of Incorporation,
for action upon any given matter will
not prevent action of such meeting upon
any other matter or matters which may
properly come before the meeting, if
there shall be present thereat, in
person or by proxy, holders of the
number of shares required for action in
respect of such other matter or
matters. Notwithstanding any provision
of law requiring any action to be taken
or authorized by the holders of a
greater proportion than a majority of
the shares of all Series and classes or
of the shares of a particular Series,
class or classes, as the case may be,
entitled to vote thereon, such action
will be valid and effective if taken or
authorized by the affirmative vote of
the holders of a majority of the shares
of all Series and classes or of such
particular Series, Class or classes, as
the case may be, outstanding and
entitled to vote thereon.
The stockholders present either in
person or by proxy, at a meeting which
has been duly called and convened, may
continue to transact business until
adjournment, notwithstanding the
withdrawal of enough stockholders to
leave less than a quorum.
--------------------------------------------------------------------------------------------------
SHAREHOLDER Under the MGCL, if authorized by the An action required or permitted to be
CONSENT: charter of the corporation, the holders taken at a shareholder meeting may be
of common stock entitled to vote taken by written action signed, or
generally in the election of directors consented to by authorized electronic
may take action or consent to any communication, by all of the
action by delivering a consent in shareholders entitled to vote on that
writing or by electronic transmission action. Such a written action is not
of the stockholders entitled to cast effective if it is signed or consented
not less than the minimum number of to by fewer than all the shareholders
votes that would be necessary to entitled to vote on the action.
authorize or take the action at a
stockholders meeting. The corporation's
charter does not authorize such action;
therefore, any action required or
permitted of stockholders must be taken
at a meeting.
--------------------------------------------------------------------------------------------------
NOTICE TO In general, stockholders entitled to In general, shareholders who are
SHAREHOLDERS vote at or notice of a stockholder entitled to vote at a shareholder
OF RECORD meeting must be given written notice of meeting must be given notice of the
DATE: at least 10 days and not more than 90 meeting at least 10 and not more than
days before the meeting. Unless 60 days before the meeting. In certain
otherwise required by statute, any cases, the notice of meeting must
business may be conducted at the annual include specified information required
meeting without being designated in the by Minnesota law. The Board can
notice. No business may be transacted establish a record date for determining
at a special meeting of stockholders the shareholders who are entitled to
except as specifically designated in vote at
the notice.
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</Table>
D.3
<Table>
<Caption>
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FUNDS ORGANIZED AS A MARYLAND FUNDS ORGANIZED AS A MINNESOTA
POLICY CORPORATION CORPORATION
--------------------------------------------------------------------------------------------------
a shareholder meeting. The record date
The Board of Directors may set a record cannot be more than 60 days before the
date for the purpose of determining the date of the meeting.
stockholders entitled to notice of or
to vote at a stockholder meeting. The
record date cannot be more than 90 days
or less than 10 days before the date of
the meeting. Instead of fixing a record
date, the Board of Directors may close
the stock transfer books for not more
than 20 days. If the stock transfer
books are closed for this purpose, they
must be closed for at least 10 days
before the date of the meeting.
--------------------------------------------------------------------------------------------------
SHAREHOLDER A stockholder may cast the votes by the At each shareholder meeting, the polls
PROXIES: stockholder in person or by proxy may be opened and closed, the proxies
executed by the stockholder or by the and ballots may be received and taken
stockholder's duly authorized agent in in charge, and all questions touching
any manner permitted or not prohibited the qualification of voters, the
by law. The proxy or evidence of validity of proxies, and acceptances or
authorization of the proxy must be rejections of votes may be decided by
filed with the secretary of the two inspectors of election.
corporation before or at the meeting.
No proxy is valid more than eleven Minnesota law provides that
months after its date unless otherwise shareholders can submit proxies in
provided in the proxy. writing or by telephonic transmission
or authenticated electronic
communication. It also provides that
the Board can establish procedures
whereby a record holder can certify in
writing that another person is the
beneficial owner of shares, and the
beneficial owner then can vote the
shares or appoint a proxy.
--------------------------------------------------------------------------------------------------
DIRECTORS' The corporation may amend the Articles The Articles of Incorporation, or any
POWER TO of Incorporation if a majority of all provision hereof, may be amended,
AMEND the shares at the time issued and altered, changed or repealed in a
ARTICLES OF outstanding of all classes or the manner prescribed by the laws of the
INCORPORATI- affected class or classes entitled to State of Minnesota.
ON: vote in favor of the amendment, or
consent in writing to such amendment. The Board, acting without shareholder
approval, can amend the corporation's
Articles of Incorporation to (i) change
the name of the corporation; (ii)
increase or decrease, but not below the
number of then-outstanding shares, the
aggregate number of shares the
corporation has authority to issue,
including shares of any class or
series; and (iii) amend or cancel a
certificate fixing the rights and
preferences of a class or series of
shares, but only when no shares of that
class or series are outstanding.
In all other cases, the corporation's
Articles of Incorporation only can be
amended with the approval of the
requisite shareholders.
--------------------------------------------------------------------------------------------------
TERMINATION Under the MGCL, a majority of the In order to dissolve a Minnesota
OF entire board of directors of the corporation, the affirmative vote of a
CORPORATION: corporation proposing to dissolve the majority of the voting power of all
corporation shall (1) adopt a shares entitled to vote is required. In
resolution which declares that order to discontinue an individual
dissolution of the corporation is class or series of shares without
advisable; and (2) direct that the dissolving the corporation, an
proposed dissolution be submitted for amendment to the corporation's Articles
consideration at either an annual or a of Incorporation would be required. In
special meeting of the stockholders. order to adopt such an amendment,
Under the MGCL, unless the shareholders must approve the amendment
corporation's charter provides a lesser by the affirmative vote of the greater
proportion of votes, but in no case of (i) a majority of the voting power
less than a majority of all votes of the shares of that class or series
entitled to be cast on the proposal, present and entitled to vote or (ii) a
the proposed dissolution shall be majority of the voting power of the
approved by the stockholders of the minimum number of shares of such class
corporation by the affirmative vote of or series entitled to vote that would
two-thirds of all the votes entitled to constitute a quorum for the transaction
be cast on the matter. Each Seligman of business at the meeting (a
Fund's charter provides that "Minnesota Statutory Vote").
notwithstanding any provision of law
requiring any action to be taken or The Board, acting without a shareholder
authorized by the holders of a greater vote, does not have the power to
proportion than a majority of the dissolve the corporation or to
shares of all series and classes or of discontinue an individual class or
the shares of a particular series, series of shares.
class or classes, as the case may be,
entitled to vote thereon, such action
shall be valid and effective if taken
or authorized by the affirmative vote
of the holders of a majority of the
shares of all series and classes or of
such particular series, class or
classes, as the case may be,
outstanding and entitled to vote
thereon.
--------------------------------------------------------------------------------------------------
MERGER OR Under the MGCL, unless the In most cases, any merger or exchange
CONSOLIDATI- corporation's charter provides a lesser in which a Minnesota corporation is not
ON OF proportion of votes, but in no case the continuing entity, and any sale of
CORPORATION: less than a majority of all votes all or substantially all of the
entitled to be cast on the proposal, corporation's property and assets not
any consolidation, merger, share in the usual and regular course of its
exchange, or transfer requires the business, requires the affirmative vote
affirmative vote of two-thirds of all of a majority of the voting power of
the votes entitled to be cast on the all shares entitled to vote.
matter. Each Seligman Fund's charter
provides that notwithstanding any
provision of law requiring any action
to be taken or authorized by the
holders of a greater
--------------------------------------------------------------------------------------------------
</Table>
D.4
<Table>
<Caption>
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FUNDS ORGANIZED AS A MARYLAND FUNDS ORGANIZED AS A MINNESOTA
POLICY CORPORATION CORPORATION
--------------------------------------------------------------------------------------------------
proportion than a majority of the Any sale of the assets belonging to an
shares of all series and classes or of individual series of shares of a
the shares of a particular series, Minnesota corporation in exchange for
class or classes, as the case may be, shares of another corporation or trust
entitled to vote thereon, such action or shares of another series of the
shall be valid and effective if taken corporation, while leaving other series
or authorized by the affirmative vote of the corporation outstanding, would
of the holders of a majority of the require an amendment to the
shares of all series and classes or of corporation's Articles of
such particular series, class or Incorporation. In order to adopt such
classes, as the case may be, an amendment, shareholders of that
outstanding and entitled to vote series would have to approve the
thereon. amendment by a Minnesota Statutory
Vote.
A stockholder who has not received
payment for his stock in connection
with a merger, consolidation, share
exchange or transfer may petition a
court of equity in the county where the
principal office of the corporation is
located or where the resident agent of
the successor is located, for an
appraisal to determine the fair value
of the stock.
--------------------------------------------------------------------------------------------------
REMOVAL OF Under the MGCL, stockholders of the Under Minnesota law, the Board can
DIRECTORS: corporation may remove any director, remove a director by a majority vote of
with or without cause, by the the remaining directors, but only if
affirmative vote of a majority of all the director was appointed by the Board
the votes entitled to be cast generally to fill a vacancy and has not
for the election of directors. subsequently been elected by
shareholders.
In all other cases, a director can only
be removed by shareholder vote. In
general, such removal requires the
affirmative vote of the holders of a
majority of the voting power of all
shares entitled to vote at an election
of directors. However, where a
corporation has cumulative voting (as
do the Funds), unless the entire Board
is removed simultaneously, a director
is not removed from the Board if there
are cast against removal of the
director the votes of a proportion of
the voting power sufficient to elect
the director at an election of the
entire Board under cumulative voting.
--------------------------------------------------------------------------------------------------
DIRECTOR The Board of Directors may appoint from From time to time the Board may, by
COMMITTEES: among its members an Executive resolution passed by a majority of the
Committee, an Audit Committee, a Board whole Board, appoint any other
Operations Committee, a Nominating committee or committees for any purpose
Committee and other committees, or purposes, which committee or
composed of one or more directors to committees will have such powers as
serve at the pleasure of the Board of specified in the resolution of
Directors. Any director may give notice appointment.
to the Board of Directors at any time
of his or her resignation from any The corporation's By-Laws provide that
committee on which he or she serves. the Board may, by resolution passed by
a majority of the whole Board,
The Board of Directors may delegate to designate an Executive Committee of two
committees appointed pursuant to the or more directors, which may meet at
Articles of Incorporation any of the stated times or on notice to all by any
powers of the Board of Directors, of their number during intervals
except as prohibited by law. between meetings of the Board. The
Executive Committee will advise with
Any action required or permitted to be and aid the officers of the Fund in all
taken at any meeting of a committee of matters concerning its interests and
the Board of Directors may be taken the management of its business, and
without a meeting, if a consent to such generally perform such duties and
action in writing or by electronic exercise such powers as may be
transmission is given by each member of delegated to it from time to time by
the committee and filed with the the Board.
minutes of proceedings of such
committee. The Board also may, by resolution
passed by a majority of the whole
Subject to the previous sections, the Board, appoint any other committee or
Board of Directors has the power at any committees for any purpose or purposes,
time to change the membership of any which committee or committees will have
committee, to fill all vacancies, to such powers as specified in the
designate alternate members to replace resolution of appointment. The quorum
any absent or disqualified member or to for such committee established by the
dissolve any such committee. Subject to Board is two members regardless of the
the power of the Board of Directors, number of members serving on the
the members of a committee have the committee. Under Minnesota law, the
power to fill any vacancies on such members of such other committees do not
committee. need to be directors.
--------------------------------------------------------------------------------------------------
DIRECTOR The Fund's Articles of Incorporation To the full extent permitted by the
LIABILITY: provide that a director or officer of laws of the State of Minnesota, as now
the corporation will not be liable to existing or hereafter amended, no
the corporation or its stockholders for director of the Fund will be liable to
monetary damages for breach of the Fund or to its shareholders for
fiduciary duty as a director or monetary damages for breach of
officer, except to the extent such fiduciary duty as a director but such
exemption from liability or limitation limit on liability will be permitted by
thereof is not permitted by law only to the extent allowable under the
(including the 1940 Act). provisions of the 1940 Act.
Under the MGCL, the foregoing provision Under Minnesota law, the foregoing
is not effective to eliminate a provision is not effective to eliminate
director's personal liability to the a director's personal liability to the
Funds or its shareholders for, among Funds or its shareholders for, among
other things, any act or omission of other things, (i) any breach of the
the director that was material to the director's duty of loyalty to the
matter giving rise to a threatened, corporation or its shareholders; (ii)
pending or completed action, suit or acts or omissions not in good faith or
proceeding, whether civil, criminal,
administrative, or investigative
("Proceeding"),
--------------------------------------------------------------------------------------------------
</Table>
D.5
<Table>
<Caption>
--------------------------------------------------------------------------------------------------
FUNDS ORGANIZED AS A MARYLAND FUNDS ORGANIZED AS A MINNESOTA
POLICY CORPORATION CORPORATION
--------------------------------------------------------------------------------------------------
and (1) was committed in bad faith; or that involve intentional misconduct or
(2) was the result of active and knowing violation of law; or (iii) any
deliberate dishonesty; or (ii) the transaction from which the director
director actually received an improper derived an improper personal benefit.
personal benefit in money, property, or
services; or (iii) in the case of any
criminal proceeding, the director had
reasonable cause to believe that the
act or omission was unlawful.
Under the MGCL, the charter of a
Maryland corporation may include any
provision expanding or limiting the
liability of its directors to the
corporation or its stockholders for
money damages, but may not include any
provision that restricts or limits the
liability of its directors to the
corporation or its stockholders: (A) to
the extent that it is proved that the
person actually received an improper
benefit or profit in money, property,
or services for the amount of the
benefit or profit in money, property,
or services actually received; or (B)
to the extent that a judgment or other
final adjudication adverse to the
person is entered in a proceeding based
on a finding in the proceeding that the
person's action, or failure to act, was
the result of active and deliberate
dishonesty and was material to the
cause of action adjudicated in the
proceeding.
--------------------------------------------------------------------------------------------------
DIRECTOR The corporation will indemnify to the The Fund will indemnify any person who
INDEMNIFICA- fullest extent permitted by law any was or is a party and is threatened to
TION: person made or threatened to be made a be made a party, by reason of the fact
party to any action, suit or that she or he is or was a director,
proceeding, whether criminal, civil, officer, employee or agent of the Fund,
administrative or investigative, by or is or was serving at the request of
reason of the fact that such person is the Fund as a director, officer,
or was a director, officer or employee employee or agent of another company,
of the corporation or serves or served partnership, joint venture, trust or
at the request of the corporation any other enterprise, to any threatened,
other enterprise as a director, officer pending or completed action, suit or
or employee. To the fullest extent proceeding, wherever brought, and the
permitted by law, expenses incurred by Fund may purchase liability insurance
any such person in defending any such and advance legal expenses, all to the
action, suit or proceeding will be paid fullest extent permitted by the laws of
or reimbursed by the corporation the State of Minnesota. Any
promptly, provided that such person indemnification hereunder will not be
agrees to repay such expenses if it is exclusive of any other rights of
ultimately determined that such person indemnification to which the directors,
is not entitled to be indemnified by officers, employees or agents might
the corporation. The Articles of otherwise be entitled. No
Incorporation may not be amended to indemnification will be made in
adversely affect this protection. These violation of the 1940 Act.
provisions do not waive compliance with
the Securities Act of 1933 or the 1940 Under Minnesota law, a corporation is
Act or other valid rule, regulation or required to indemnify and advance
order of the SEC. expenses to present and former
directors against judgments, penalties,
Under the MGCL, a corporation may fines, settlements and reasonable
indemnify a director made a party to expenses, including attorneys' fees and
any Proceeding by reason of service in disbursements, if they are made parties
that capacity unless found liable under to a legal proceeding by virtue of
provisions (1) and (2) under "Director/ their position as directors. However,
Trustee Liability". Indemnification may indemnification and advances are not
be against judgments, penalties, fines, required or permitted if a director
settlements, and reasonable expenses engaged in specified disabling conduct.
actually incurred by the director in
connection with the proceeding. The corporation's Articles of
However, if the proceeding was one by Incorporation and By-Laws provide that
or in the right of the corporation, each person made or threatened to be
indemnification may not be made in made a party to or who is involved
respect of any proceeding in which the (including, without limitation, as a
director shall have been adjudged to be witness) in any actual or threatened
liable to the corporation. action, suit or proceeding whether
civil, criminal, administrative,
The Corporation's By-Laws provide to arbitration, or investigative,
the maximum extent permitted by including a proceeding by or in the
Maryland law, as in effect from time to right of the Fund by reason of the
time, the Corporation shall indemnify former or present capacity as a
and, without requiring a preliminary director or officer of the Fund or who,
determination of the ultimate while a director or officer of the
entitlement to indemnification, shall Fund, is or was serving at the request
pay or reimburse reasonable expenses in of the Fund or whose duties as a
advance of final disposition of a director or officer involve or involved
proceeding to (a) any individual who is service as a director, officer,
a present or former director or officer partner, trustee or agent of another
of the Corporation and who is made, or organization or employee benefit plan,
threatened to be made, a party to the whether the basis of any proceeding is
proceeding by reason of his or her alleged action in an official capacity
service in any such capacity or (b) any or in any capacity while serving as a
individual who, while a director or director, officer, partner, trustee or
officer of the Corporation and at the agent, will be indemnified and held
request of the Corporation, serves or harmless by the Fund to the full extent
has served as a director, officer, authorized by laws of the State of
partner or trustee of another Minnesota, as the same or may hereafter
corporation, or a real estate be amended (but, in the case of any
investment trust, partnership, joint such amendment, only to the extent that
venture, trust, employee benefit plan such amendment permits the Fund to
or other enterprise and who is made, or provide broader indemnification rights
threatened to be made, a party to the than the law permitted the Fund to
proceeding by reason of his or her provide prior to such amendment), or by
service in any such capacity. The any other applicable law as then in
Corporation may, with the approval of effect, against judgments, penalties,
its Board of Directors or any duly fines including, without limitation,
authorized committee thereof, provide excise taxes assessed against the
such indemnification and advance for person with respect to an employee
expenses to a person who served a benefit plan, settlements and
predecessor of the Corporation in any reasonable expenses, including
of the capacities described in (a) or attorneys' fees and disbursements,
(b) above and to any employee or agent incurred in connection therewith and
of the Corporation or a predecessor of the indemnification will continue as to
the Corporation. The termination of any any person who has ceased to be a
claim, action, suit or other director or officer and will inure to
the benefit of the person's heirs,
executors and administrators provided,
however, in an action brought against
--------------------------------------------------------------------------------------------------
</Table>
D.6
<Table>
<Caption>
--------------------------------------------------------------------------------------------------
FUNDS ORGANIZED AS A MARYLAND FUNDS ORGANIZED AS A MINNESOTA
POLICY CORPORATION CORPORATION
--------------------------------------------------------------------------------------------------
proceeding involving any person, by the Fund to enforce rights to
judgment, settlement (whether with or indemnification, the director or
without court approval) or conviction officer will be indemnified only if the
or upon a plea of guilty or nolo action was authorized by the Board of
contendere, or its equivalent, shall the Fund. The right to indemnification
not create a presumption that such conferred by these provisions is a
person did not meet the standards of contract right and includes the right
conduct required for indemnification or to be paid by the Fund in advance of
payment of expenses to be required or the final disposition of a proceeding
permitted under Maryland law, the By- for expenses incurred in connection
laws or the charter of the Corporation. therewith provided, however, such
Any indemnification or advance of payment of expenses will be made only
expenses made pursuant to the By-laws upon receipt of a written undertaking
shall be subject to applicable by the director or officer to repay all
requirements of the 1940 Act. The amounts so paid if it is ultimately
indemnification and payment of expenses determined that the director or officer
provided in the By-laws shall not be is not entitled to indemnification.
deemed exclusive of or limit in any way
other rights to which any person Each person who upon written request to
seeking indemnification or payment of the Funds has not received payment
expenses may be or may become entitled within thirty days may at any time
under any bylaw, regulation, insurance, thereafter bring suit against the Funds
agreement or otherwise. to recover any unpaid amount and, to
the extent successful, in whole or in
part, will be entitled to be paid the
expenses of prosecuting such suit. Each
person will be presumed to be entitled
to indemnification upon filing a
written request for payment and the
Fund will have the burden of proof to
overcome the presumption that the
director or officer is not so entitled.
Neither the determination by the Fund,
whether by the Board, special legal
counsel or by shareholder, nor the
failure of the Fund to have made any
determination will be a defense or
create the presumption that the
director or officer is not entitled to
indemnification.
The right to indemnification and to the
payment of expenses prior to any final
determination will not be exclusive of
any other right which any person may
have or hereinafter acquire under any
statute, provision of the Articles of
Incorporation, by-law, agreement, vote
of shareholders or otherwise and
notwithstanding any provisions in the
Funds' By-Laws, the Funds are not
obligated to make any payment with
respect to any claim for which payment
is required to be made to or on behalf
of the director or officer under any
insurance policy, except with respect
to any excess beyond the amount of
required payment under such insurance
and no indemnification will be made in
violation of the provisions of the 1940
Act.
--------------------------------------------------------------------------------------------------
DIVIDENDS: The Board of Directors may declare and The corporation's Articles of
pay dividends and distributions from Incorporation provide that the
income and capital gains, accrued or directors may declare and pay dividends
unrealized, from the assets belonging in their discretion at any time and
to a Series, at such times and in such from time to time to the extent and
manner as they may determine in their from such sources as permitted by the
discretion. laws of the State of Minnesota. Under
Minnesota law, the Board can authorize
Dividends and distributions on shares a dividend if it determines that the
of a particular Series may be paid to corporation will be able to pay its
the holders of shares of the Series at debts in the ordinary course of
such times, in such manner and from business after paying the dividend.
such of the income and capital gains,
accrued or realized, from the assets
belonging to that Series, after
providing for actual and accrued
liabilities belonging to that Series,
as the Board of Directors may
determine.
Dividends and other distributions upon
the stock of the corporation may be
authorized by the Board of Directors,
subject to the provisions of law and
the charter of the corporation.
Dividends and other distributions may
be paid in cash, property or stock of
the corporation, subject to the
provisions of law and the charter.
--------------------------------------------------------------------------------------------------
CAPITALIZAT- The Board of Directors has the power The amount of total authorized capital
ION: and authority to increase or decrease, stock of the Corporation is
from time to time, the aggregate number $100,000,000, consisting of
of shares of stock, or of any Series or 10,000,000,000 shares of par value of
class of stock, that the corporation one cent ($0.01) per share. Any or all
has the authority to issue. of said shares of capital stock may be
issued in such classes or series with
With respect to RiverSource Government such designations, preferences and
Money Market Fund, Inc., the total relative, participating, optional or
number of shares of capital stock which other special rights, or
the corporation has authority to issue qualifications, limitations or
is 1,400,000,000 shares (par value of restrictions thereof, as is stated and
$0.01 per share), amounting to an expressed in a resolution or
aggregate par value of $14,000,000. resolutions providing for the issue of
such class or series of stock as may be
With respect to Seligman Frontier Fund, adopted from time to time by the Fund's
Inc., the total number of shares of Board.
capital stock which the corporation has
authority to issue is 500,000,000
shares (par value of $0.10 per share),
--------------------------------------------------------------------------------------------------
</Table>
D.7
<Table>
<Caption>
--------------------------------------------------------------------------------------------------
FUNDS ORGANIZED AS A MARYLAND FUNDS ORGANIZED AS A MINNESOTA
POLICY CORPORATION CORPORATION
--------------------------------------------------------------------------------------------------
amounting to an aggregate par value of
$50,000,000.
With respect to Seligman Global Fund
Series, Inc., of which Seligman Global
Smaller Companies Fund is a part, the
total number of shares of all Series
and classes of stock which the
corporation has the authority to issue
is 2,000,000,000 shares of common stock
(par value of $0.001 per share),
amounting to an aggregate par value of
$2,000,000.
With respect to Seligman Value Fund
Series, Inc., of which Seligman
Smaller-Cap Value Fund is a part, the
total number of shares of all Series
and classes of stock which the
corporation has the authority to issue
is 2,000,000,000 shares of common stock
(par value of $0.001 per share),
amounting to an aggregate par value of
$2,000,000.
--------------------------------------------------------------------------------------------------
NUMBER OF The number of directors will never be There may be no less than two and not
DIRECTORS; less than the greater of three and the more than fifteen directors, as
VACANCIES: minimum number required by the MGCL, determined from time to time by the
nor more than 20, and the tenure of a Board. If a vacancy occurs on the Board
directorship will not be affected by by reason of death, resignation or
any decrease in the number of otherwise, such vacancy may be filled
directors. for the unexpired term by a majority
vote of the remaining directors, even
Any vacancy occurring in the Board of if the remaining number of directors is
Directors for any cause other than by less than a quorum.
reason of an increase in the number of
directors may be filled by a majority
of the remaining members of the Board
of Directors, even if such majority is
less than a quorum. Any vacancy
occurring by reason of an increase in
the number of directors may be filled
by a majority of the entire Board of
Directors then in office. A director
elected by the Board of Directors to
fill a vacancy will be elected to hold
office until the next annual meeting of
stockholders and until his or her
successor is elected and qualifies.
--------------------------------------------------------------------------------------------------
INDEPENDENT The Articles of Incorporation and By- The corporation's By-Laws require the
CHAIR OF THE Laws do not require an independent Board to elect one independent member
BOARD: chair of the Board of Directors. to serve as Chair of the Board whose
duties include serving as the lead
independent director.
--------------------------------------------------------------------------------------------------
INSPECTION Under the MGCL, any stockholder or his The Articles of Incorporation and By-
OF BOOKS AND agent may inspect and copy during usual Laws do not give shareholders any right
RECORDS: business hours the corporation's By- to inspect the books and records of the
laws, minutes of the proceedings of the corporation.
stockholders, annual statements of
affairs, and voting trust agreements on Minnesota law requires the corporation
file at the corporation's principal (each Fund) to keep (i) a share
office. register containing the names and
addresses of its shareholders and the
In addition, one or more persons who number and classes of shares held by
together are and for at least six each; (ii) records of all proceedings
months have been stockholders of record of shareholders for the last three
of a least 5 percent of the outstanding years; (iii) records of all proceedings
stock of any class of the corporation of the Board for the last three years;
may, in person or by agent, on written (iv) its Articles of Incorporation and
request, inspect and copy during usual By-Laws, as amended; (v) certain
business hours the corporation's books financial statements that Minnesota law
of account and its stock ledger, requires that the corporation (each
present to any officer or resident Fund) to prepare; (vi) all reports to
agent of the corporation a written shareholders generally within the last
request for a statement of its affairs, three years; and (vii) a statement of
and in the case of any corporation the names and usual business addresses
which does not maintain the original or of its directors and principal
a duplicate stock ledger at its officers. The Fund's shareholders and
principal office, present to any beneficial owners have the right, upon
officer or resident agent of the written demand stating the purpose, at
corporation a written request for a any reasonable time to examine and copy
list of its stockholders. those records which are reasonably
related to the stated purpose, provided
A stockholder with the right, under that the stated purpose is reasonably
applicable law, to inspect the related to the person's interest as a
corporation's books of account, stock shareholder or beneficial owner.
ledger, or other specified documents of
the corporation has no right to make an
inspection if the Board of Directors
determines that the stockholder has an
improper purpose for requesting the
inspection.
--------------------------------------------------------------------------------------------------
</Table>
D.8
EXHIBIT E
RIVERSOURCE FAMILY OF FUNDS PRIVACY NOTICE
The RiverSource Family of Funds, which includes RiverSource, Seligman, and
Threadneedle branded funds (collectively, the "funds"), are committed to
respecting shareholders' rights of privacy and we have adopted the following
policy to maintain the confidentiality of the information you share with us:
INFORMATION WE COLLECT
We know that you expect us to conduct and process your business in a manner that
is both accurate and efficient. To do so, we may collect information about you
such as your name, address, Social Security number and the names of your
beneficiaries. This information is collected from applications or other forms
that you provide to us or the financial intermediaries that distribute the
funds. We also collect information about your transactions in the funds. In
addition, we may obtain information about you from third parties in order to
service your account. Financial intermediaries which distribute the funds and
service your account, whether or not affiliated with us, may have a customer
relationship with you and may independently collect information from you. This
Privacy Notice does not apply to their independent collection or use of
information about you.
INFORMATION WE DISCLOSE
We do not disclose any nonpublic personal information about our customers or
former customers to anyone, except in two circumstances. We disclose information
to companies, whether or not affiliated with us, that help us by providing
services to you including companies that market funds on our behalf. We also
disclose information when we are permitted or required by law to do so, such as
when information is provided to the IRS for tax purposes.
SECURITY
We maintain physical, electronic, and procedural safeguards to protect your
personal information. In addition, we insist that the distributors and other
companies that perform services for us limit access to your personal information
to authorized employees and agents, and maintain appropriate physical,
electronic and procedural safeguards.
This privacy notice applies to each fund in the RiverSource Family of Funds, to
Seligman Premium Technology Growth Fund, to Tri-Continental Corporation and to
RiverSource LaSalle International Real Estate Fund. It also applies to
RiverSource Investments, LLC, RiverSource Fund Distributors, Inc. and
RiverSource Service Corporation with respect to the investment advisory,
distribution and shareholder services each may provide to the funds.
E.1
PROXY PROXY
RIVERSOURCE FUNDS
SELIGMAN FUNDS
NOTICE OF A JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 15, 2010
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE FUND(S) LISTED BELOW.
The undersigned hereby constitutes and appoints Stephen R. Lewis, Jr., Scott R. Plummer and Christopher O. Petersen, and each of
them, as proxies for the undersigned, with full power of substitution and resubstitution, and hereby authorizes said proxies, and
each of them, to represent and vote, as designated on the reverse side, all shares of the Fund(s) listed below held of record by the
undersigned on January 15, 2010 at the Joint Special Meeting of Shareholders to be held on March 15, 2010 (the Meeting), and at any
adjournment thereof. The undersigned hereby revokes any previous proxies with respect to such shares of the undersigned.
THIS PROXY CARD, WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER(S) AND, IN THE
DISCRETION OF THE PROXIES NOTED ABOVE, UPON ANY AND ALL OTHER BUSINESS AS MAY PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT
THEREOF, INCLUDING, BUT NOT LIMITED TO, PROPOSING AND/OR VOTING ON ADJOURNMENT OF THE MEETING WITH RESPECT TO THE PROPOSAL(S),
INCLUDING, BUT NOT LIMITED TO, IN THE EVENT THAT SUFFICIENT VOTES IN FAVOR OF ANY PROPOSAL ARE NOT RECEIVED. IF THIS PROXY CARD IS
SIGNED, DATED AND RETURNED WITH NO VOTING INSTRUCTION AS TO THE PROPOSAL(S) ON WHICH SHARES REPRESENTED BY THE UNDERSIGNED ARE
ENTITLED TO VOTE, SUCH SHARES SHALL BE VOTED FOR THE PROPOSAL(S).
VOTE VIA TELEPHONE: 1-866-241-6192
VOTE VIA THE INTERNET: WWW.PROXY-DIRECT.COM
999 9999 9999 999 _________________________
NOTE: Please sign exactly as your name appears on
this Proxy Card and date it. If signing for estates,
trusts or corporations, title or capacity should be
stated. If shares are held jointly, each holder must
sign.
----------------------------------------------------
Signature
----------------------------------------------------
Additional Signature (if held jointly)
----------------------------------------------------
Date RSF_20876_112009
FUND FUND
RiverSource Partners Aggressive Growth Fund RiverSource Partners Select Value Fund
RiverSource Partners Small Cap Equity Fund RiverSource Partners Small Cap Growth Fund
Seligman Global Smaller Companies Fund RiverSource Tax-Exempt Money Market Fund
VOTING OPTIONS
READ YOUR PROXY STATEMENT AND HAVE IT AT HAND WHEN VOTING.
(GRAPHIC) (GRAPHIC) (GRAPHIC) (GRAPHIC)
VOTE ON THE INTERNET VOTE BY PHONE VOTE BY MAIL VOTE IN PERSON
LOG ON TO: CALL 1-866-241-6192 VOTE, SIGN AND DATE THIS PROXY ATTEND SHAREHOLDER MEETING
WWW.PROXY-DIRECT.COM FOLLOW THE RECORDED CARD AND RETURN IN THE MARQUETTE HOTEL
FOLLOW THE ON-SCREEN INSTRUCTIONS POSTAGE-PAID ENVELOPE 710 MARQUETTE AVENUE
INSTRUCTIONS AVAILABLE 24 HOURS MINNEAPOLIS, MN 55402
AVAILABLE 24 HOURS ON MARCH 15, 2010
PLEASE VOTE BY FILLING IN THE APPROPRIATE BOX(ES) BELOW. THIS PROXY CARD CONTAINS PROPOSALS RELATING TO MULTIPLE FUNDS. IF YOU DO
NOT OWN SHARES OF A FUND, "NOT APPLICABLE" IS NOTED UNDER THAT PROPOSAL. YOU ARE ONLY PERMITTED TO VOTE ON PROPOSALS RELATING TO
FUND(S) FOR WHICH YOU OWN SHARES. IF YOU DO NOT INDICATE YOUR VOTING INSTRUCTION FOR THE PROPOSALS THAT YOU ARE ENTITLED TO VOTE,
YOUR PROXY WILL BE VOTED FOR EACH SUCH PROPOSAL THAT YOU ARE ENTITLED TO VOTE.
PLEASE MARK BOXES BELOW IN BLUE OR BLACK INK AS FOLLOWS. EXAMPLE: [X]
[ ] Mark this box to vote FOR ALL Proposals of fund(s) for which you own shares. (No other vote is necessary.)
1. To approve an Agreement and Plan of Reorganization between RiverSource Partners Aggressive Growth Fund and RiverSource Mid Cap
Growth Fund.
FOR AGAINST ABSTAIN
RiverSource Partners Aggressive Growth Fund [ ] [ ] [ ]
2. To approve an Agreement and Plan of Reorganization between RiverSource Partners Select Value Fund and RiverSource Mid Cap Value
Fund.
FOR AGAINST ABSTAIN
RiverSource Partners Select Value Fund [ ] [ ] [ ]
3. To approve an Agreement and Plan of Reorganization between RiverSource Partners Small Cap Equity Fund and Seligman Smaller-Cap
Value Fund.
FOR AGAINST ABSTAIN
RiverSource Partners Small Cap Equity Fund [ ] [ ] [ ]
4. To approve an Agreement and Plan of Reorganization between RiverSource Partners Small Cap Growth Fund and Seligman Frontier
Fund.
FOR AGAINST ABSTAIN
RiverSource Partners Small Cap Growth Fund [ ] [ ] [ ]
5. To approve an Agreement and Plan of Reorganization between Seligman Global Smaller Companies Fund and RiverSource Partners
International Small Cap Fund.
FOR AGAINST ABSTAIN
Seligman Global Smaller Companies Fund [ ] [ ] [ ]
6. To approve an Agreement and Plan of Reorganization between RiverSource Tax-Exempt Money Market Fund and RiverSource Government
Money Market Fund (formerly Seligman Cash Management Fund).
FOR AGAINST ABSTAIN
RiverSource Tax-Exempt Money Market Fund [ ] [ ] [ ]
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR BOTH RIVERSOURCE AND SELIGMAN FUNDS
SHAREHOLDER MEETING TO BE HELD ON MARCH 15, 2010.
THE PROXY STATEMENT FOR THIS MEETING IS AVAILABLE AT HTTPS://WWW.PROXY-DIRECT.COM/RFS20876
EVERY VOTE IS IMPORTANT! PLEASE VOTE TODAY USING ONE OF THE FOUR AVAILABLE OPTIONS!
RSF_20876_112009
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND
RIVERSOURCE PARTNERS SELECT VALUE FUND
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND
SELIGMAN GLOBAL SMALLER COMPANIES FUND
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND
LOGO
Jan. , 2010
HERE IS A BRIEF OVERVIEW OF THE CHANGES BEING RECOMMENDED FOR YOUR FUND. WE
ENCOURAGE YOU TO READ THE FULL TEXT OF THE ENCLOSED COMBINED PROXY
STATEMENT/PROSPECTUS.
Q: WHY AM I BEING ASKED TO VOTE?
Mutual funds are required to get shareholders' approval for certain kinds of
changes, like the reorganizations proposed in this combined proxy
statement/prospectus.
Q: IS MY VOTE IMPORTANT?
Absolutely! While the Board of Directors (the "Board") of each Fund listed above
has reviewed these reorganizations and recommends that you approve them, you
have the right to voice your opinion. Until a Fund is sure that a quorum has
been reached, it will continue to contact shareholders asking them to vote.
Q: WHAT AM I BEING ASKED TO VOTE ON?
Shareholders are being asked to vote on the reorganization (a "Reorganization")
of one or more funds in the RiverSource Family of Funds (each a "Selling Fund"
and together, the "Selling Funds") into a corresponding fund in the RiverSource
Family of Funds (each a "Buying Fund" and together, the "Buying Funds") as noted
in the table below:
<Table>
<Caption>
SELLING FUND BUYING FUND
RiverSource Partners Aggressive Growth Fund RiverSource Mid Cap Growth Fund
RiverSource Partners Select Value Fund RiverSource Mid Cap Value Fund
RiverSource Partners Small Cap Equity Fund Seligman Smaller-Cap Value Fund
RiverSource Partners Small Cap Growth Fund Seligman Frontier Fund
Seligman Global Smaller Companies Fund RiverSource Partners International Small Cap
Fund
RiverSource Tax-Exempt Money Market Fund RiverSource Government Money Market Fund
(formerly Seligman Cash Management Fund)
</Table>
If the Reorganization of your Selling Fund is approved by shareholders and the
other closing conditions are met, your shares of the Selling Fund will, in
effect, be converted into shares of the corresponding Buying Fund with the same
aggregate net asset value as your Selling Fund shares at the time of the
Reorganization. (Selling Funds and Buying Funds may be individually or
collectively referred to as a "Fund" or the "Funds.")
We encourage you to read the full text of the combined proxy
statement/prospectus to obtain a more detailed understanding of the issues.
Q: WHY ARE THE REORGANIZATIONS BEING PROPOSED?
The Reorganization of each Selling Fund into a corresponding Buying Fund would
generally result in a larger combined fund with the same or similar investment
objectives, principal investment strategies and investment policies, which will
allow for more focused distribution, potentially increasing sales of and
economies of scale in the combined fund. Additionally, following the
Reorganization, for nearly all classes of shares of the combined fund, net
expenses will be the same or lower than they would have been for the Selling
Fund.
Q: IF APPROVED, WHEN WILL THE REORGANIZATIONS HAPPEN?
The Reorganizations will take place as soon as practicable following shareholder
approval, and are expected to close before the end of the second quarter of
2010.
Q: HOW DOES THE BOARD RECOMMEND THAT I VOTE?
After careful consideration, the Board of each Selling Fund recommends that you
vote FOR the Reorganization of your Selling Fund.
Q: HOW DO I VOTE?
You can vote in one of four ways:
- By telephone
- By internet
- By mail with the enclosed proxy card
- In person at the meeting
Please refer to the enclosed proxy card for the telephone number and internet
address.
Q: WHOM SHOULD I CALL IF I HAVE QUESTIONS?
If you have questions about any of the proposals described in the combined proxy
statement/prospectus or about voting procedures, please call the Funds' proxy
solicitor, Computershare Fund Services, toll free at 1 (866)-859-8682.
STATEMENT OF ADDITIONAL INFORMATION
RIVERSOURCE EQUITY SERIES, INC.
RiverSource Mid Cap Growth Fund
RIVERSOURCE INTERNATIONAL MANAGERS SERIES, INC.
RiverSource Partners International Small Cap Fund
RIVERSOURCE INVESTMENT SERIES, INC.
RiverSource Mid Cap Value Fund
RIVERSOURCE GOVERNMENT MONEY MARKET FUND, INC.
SELIGMAN FRONTIER FUND, INC.
SELIGMAN VALUE FUND SERIES, INC.
Seligman Smaller-Cap Value Fund
JAN. , 2010
This Statement of Additional Information (the "SAI") is not a prospectus. It
should be read in conjunction with the proxy statement/prospectus, dated the
same date as this SAI, which may be obtained by contacting your Fund's proxy
solicitor, Computershare Fund Services, toll free at (866) 438-8932.
This SAI relates to the proposed reorganizations (each a "Reorganization") of a
fund in the RiverSource Family of Funds (each a "Selling Fund" and together, the
"Selling Funds") into a corresponding fund in the RiverSource Family of Funds
(each a "Buying Fund" and together, the "Buying Funds") as noted in the table
below:
<Table>
<Caption>
SELLING FUND BUYING FUND
------------------------------------------------------------------------------------------------
RiverSource Partners Aggressive Growth Fund RiverSource Mid Cap Growth Fund
------------------------------------------------------------------------------------------------
RiverSource Partners Select Value Fund RiverSource Mid Cap Value Fund
------------------------------------------------------------------------------------------------
RiverSource Partners Small Cap Equity Fund Seligman Smaller-Cap Value Fund
------------------------------------------------------------------------------------------------
RiverSource Partners Small Cap Growth Fund Seligman Frontier Fund
------------------------------------------------------------------------------------------------
Seligman Global Smaller Companies Fund RiverSource Partners International Small Cap Fund
------------------------------------------------------------------------------------------------
RiverSource Tax-Exempt Money Market Fund RiverSource Government Money Market Fund
(formerly Seligman Cash Management Fund)
------------------------------------------------------------------------------------------------
</Table>
This SAI incorporates by reference the following described Buying and Selling
Fund documents, each of which has been previously filed and accompanies this
SAI.
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of RiverSource Partners Aggressive Growth Fund, for the period ended May
31, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of RiverSource Mid Cap Growth Fund, for the period ended Nov. 30, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of RiverSource Partners Select Value Fund, for the period ended May 31,
2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of RiverSource Mid Cap Value Fund for the period ended Sept. 30, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of RiverSource Partners Small Cap Equity Fund, for the period ended May
31, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of Seligman Smaller-Cap Value Fund, for the period ended Dec. 31, 2008,
and the unaudited financial statements included in the Semiannual Report
to Shareholders of Seligman Smaller-Cap Value Fund, for the period ended
June 30, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of RiverSource Partners Small Cap Growth Fund, for the period ended March
31, 2009, and the unaudited financial statements included in the
Semiannual Report to Shareholders of RiverSource Partners Small Cap Growth
Fund, for the period ended Sept. 30, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of Seligman Frontier Fund, for the period ended Oct. 31, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of Seligman Global Smaller Companies Fund, for the period ended Oct. 31,
2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of RiverSource Partners International Small Cap Fund, for the period ended
Oct. 31, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of RiverSource Tax-Exempt Money Market Fund, for the period ended Dec. 31,
2008, and the unaudited financial statements included in the Semiannual
Report to Shareholders of RiverSource Tax-Exempt Money Market Fund, for
the period ended June 30, 2009;
- the Report of the Independent Registered Public Accounting Firm and the
audited financial statements included in the Annual Report to Shareholders
of RiverSource Government Money Market Fund (formerly Seligman Cash
Management Fund), for the period ended Dec. 31, 2008, and the unaudited
financial statements included in the Semiannual Report to Shareholders of
RiverSource Government Money Market Fund, for the period ended June 30,
2009;
- the most recent SAI for RiverSource Mid Cap Growth Fund, RiverSource Mid
Cap Value Fund and RiverSource Partners International Small Cap Fund,
Seligman Frontier Fund, dated Dec. 30, 2009, as supplemented today;
- the most recent SAI for RiverSource Government Money Market Fund, dated
May 1, 2009, as supplemented today; and
- the most recent SAI for Seligman Smaller-Cap Value Fund, dated May 1,
2009, as supplemented today.
2
TABLE OF CONTENTS
<Table>
For Proposal 1:
Riversource Mid Cap Growth Fund Pro Forma Financials
Introduction to Proposed Fund Reorganization.................................. 4
Pro Forma Combining Statement of Assets and Liabilities....................... 5
Pro Forma Combining Statement of Operations................................... 6
Notes to Pro Forma Financial Statements....................................... 7
Combined Portfolio of Investments............................................. 9
For Proposal 2:
Riversource Mid Cap Value Fund Pro Forma Financials
Introduction to Proposed Fund Reorganization.................................. 19
Pro Forma Combining Statement of Assets and Liabilities....................... 20
Pro Forma Combining Statement of Operations................................... 21
Notes to Pro Forma Financial Statements....................................... 22
Combined Portfolio of Investments............................................. 24
For Proposal 3:
Seligman Smaller-Cap Value Fund Pro Forma Financials
Introduction to Proposed Fund Reorganization.................................. 34
Pro Forma Combining Statement of Assets and Liabilities....................... 35
Pro Forma Combining Statement of Operations................................... 36
Notes to Pro Forma Financial Statements....................................... 37
Combined Portfolio of Investments............................................. 39
For Proposal 4:
Seligman Frontier Fund Pro Forma Financials
Introduction to Proposed Fund Reorganization.................................. 53
Pro Forma Combining Statement of Assets and Liabilities....................... 54
Pro Forma Combining Statement of Operations................................... 55
Notes to Pro Forma Financial Statements....................................... 56
Combined Portfolio of Investments............................................. 58
For Proposal 5:
Riversource Partners International Small Cap Fund Pro Forma Financials
Introduction to Proposed Fund Reorganization.................................. 70
Pro Forma Combining Statement of Assets and Liabilities....................... 71
Pro Forma Combining Statement of Operations................................... 72
Notes to Pro Forma Financial Statements....................................... 73
Combined Portfolio of Investments............................................. 75
For Proposal 6:
Riversource Government Money Market Fund Financials
Introduction to Proposed Fund Reorganization.................................. 91
Pro Forma Combining Statement of Assets and Liabilities....................... 92
Pro Forma Combining Statement of Operations................................... 93
Notes to Pro Forma Financial Statements....................................... 94
Combined Portfolio of Investments............................................. 96
</Table>
3
RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (SELLING FUND)
INTRODUCTION TO PROPOSED FUND REORGANIZATION
May 31, 2009
The accompanying unaudited pro forma combining statement of assets and
liabilities and the statement of operations reflect the accounts of the two
funds at, and for, the 12-month period ending May 31, 2009. These statements
have been derived from financial statements prepared for the RiverSource Mid Cap
Growth Fund and the RiverSource Partners Aggressive Growth Fund as of May 31,
2009. RiverSource Mid Cap Growth Fund invests primarily in common stocks of mid-
capitalization companies. RiverSource Partners Aggressive Growth Fund invests
primarily in equity securities of medium-sized U.S. companies.
Under the proposed Agreement and Plan of Reorganization, share classes of
RiverSource Partners Aggressive Growth Fund would be exchanged for share classes
of RiverSource Mid Cap Growth Fund.
<Table>
<Caption>
SELLING FUND BUYING FUND
-------------------------------------------------------------------------------------------------
RiverSource Partners Aggressive Growth Fund Class A RiverSource Mid Cap Growth Fund Class A
-------------------------------------------------------------------------------------------------
RiverSource Partners Aggressive Growth Fund Class B RiverSource Mid Cap Growth Fund Class B
-------------------------------------------------------------------------------------------------
RiverSource Partners Aggressive Growth Fund Class C RiverSource Mid Cap Growth Fund Class C
-------------------------------------------------------------------------------------------------
RiverSource Partners Aggressive Growth Fund Class I RiverSource Mid Cap Growth Fund Class I
-------------------------------------------------------------------------------------------------
RiverSource Partners Aggressive Growth Fund Class R2 RiverSource Mid Cap Growth Fund Class R2*
-------------------------------------------------------------------------------------------------
RiverSource Partners Aggressive Growth Fund Class R3 RiverSource Mid Cap Growth Fund Class R3*
-------------------------------------------------------------------------------------------------
RiverSource Partners Aggressive Growth Fund Class R4 RiverSource Mid Cap Growth Fund Class R4
-------------------------------------------------------------------------------------------------
RiverSource Partners Aggressive Growth Fund Class R5 RiverSource Mid Cap Growth Fund Class R5*
-------------------------------------------------------------------------------------------------
</Table>
* The inception date for the RiverSource Mid Cap Growth Fund Class R2, Class
R3 and Class R5 shares is expected to be in the first quarter of 2010.
The pro forma combining statements have been prepared to give effect to the
proposed transaction on the historical operations of the accounting survivor,
RiverSource Mid Cap Growth Fund, as if the transaction had occurred at the
beginning of the fiscal year ending May 31, 2009.
4
RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF ASSETS AND LIABILITIES
<Table>
<Caption>
RIVERSOURCE
RIVERSOURCE MID CAP RIVERSOURCE
RIVERSOURCE PARTNERS GROWTH FUND MID CAP
MID CAP AGGRESSIVE PRO FORMA GROWTH FUND
GROWTH FUND GROWTH FUND ADJUSTMENTS PRO FORMA COMBINED
MAY 31, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED)
ASSETS
Investments in securities, at cost
Unaffiliated issuers $ 593,561,022 $ 287,884,679 $ -- $ 881,445,701
Affiliated money market fund $ 20,728,928 $ 6,267,942 $ -- $ 26,996,870
Investments of cash collateral received for
securities on loan $ 159,610,178 $ 82,868,414 $ -- $ 242,478,592
-------------------------------------------------------------
Investments in securities, at value
Unaffiliated issuers* $ 571,196,328 $ 306,793,303 $ -- $ 877,989,631
Affiliated money market fund $ 20,728,928 $ 6,267,942 $ -- $ 26,996,870
Investments of cash collateral received for
securities on loan $ 159,610,178 $ 82,868,414 $ -- $ 242,478,592
Cash 3,601 -- -- 3,601
Capital shares receivable 743,985 43,345 -- 787,330
Dividends and accrued interest receivable 413,205 213,488 -- 626,693
Receivable for investment securities sold 6,836,358 8,344,564 -- 15,180,922
-------------------------------------------------------------------------------------------------------------------
Total assets 759,532,583 404,531,056 -- 1,164,063,639
-------------------------------------------------------------------------------------------------------------------
LIABILITIES
Options contracts written, at value (premiums
received $383,869 for RiverSource Mid Cap Growth
Fund) 571,080 -- -- 571,080
Capital shares payable 240,084 254,974 -- 495,058
Payable for investment securities purchased 6,308,437 10,346,962 -- 16,655,399
Payable upon return of securities loaned 159,610,178 82,868,414 -- 242,478,592
Unrealized depreciation on forward foreign currency
contracts -- 26,187 -- 26,187
Accrued investment management services fees 11,111 7,461 -- 18,572
Accrued distribution fees 98,833 46,965 -- 145,798
Accrued transfer agency fees 3,573 3,218 -- 6,791
Accrued administrative services fees 942 503 -- 1,445
Accrued plan administration services fees 635 35 -- 670
Other accrued expenses 150,252 137,929 -- 288,181
-------------------------------------------------------------------------------------------------------------------
Total liabilities 166,995,125 93,692,648 -- 260,687,773
-------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 592,537,458 $ 310,838,408 $ -- $ 903,375,866
-------------------------------------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value (Note 3) $ 816,369 $ 507,141 $ (80,748) $ 1,242,762
Additional paid-in capital (Note 3) 759,368,800 828,516,956 80,748 1,587,966,504
Undistributed (excess of distributions over) net
investment income (675,066) 7,612 -- (667,454)
Accumulated net realized gain (loss) (144,420,740) (537,082,868) -- (681,503,608)
Unrealized appreciation (depreciation) on
investments and on translation of assets and
liabilities in foreign currencies (22,551,905) 18,889,567 -- (3,662,338)
-------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding capital stock $ 592,537,458 $ 310,838,408 $ -- $ 903,375,866
-------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding
shares: Class A $ 455,229,789 $ 207,169,730 $ -- $ 662,399,519
Class B $ 55,763,638 $ 30,452,015 $ -- $ 86,215,653
Class C $ 3,958,929 $ 1,762,044 $ -- $ 5,720,973
Class I $ 74,343,026 $ 71,268,211 $ -- $ 145,611,237
Class R2 $ -- $ 75,006 $ -- $ 75,006
Class R3 $ -- $ 16,916 $ -- $ 16,916
Class R4 $ 3,242,076 $ 90,922 $ -- $ 3,332,998
Class R5 $ -- $ 3,564 $ -- $ 3,564
Shares outstanding
(Note 3): Class A shares 61,864,663 33,798,503 (5,650,442) 90,012,724
Class B shares 9,081,214 5,204,722 (245,110) 14,040,826
Class C shares 644,286 301,006 (14,028) 931,264
Class I shares 9,618,813 11,379,715 (2,160,024) 18,838,504
Class R2 shares -- 12,246 (2,055) 10,191
Class R3 shares -- 2,736 (438) 2,298
Class R4 shares 427,917 14,618 (2,623) 439,912
Class R5 shares -- 572 (111) 461
Net asset value per share of outstanding capital
stock: Class A $ 7.36 $ 6.13 $ -- $ 7.36
Class B $ 6.14 $ 5.85 $ -- $ 6.14
Class C $ 6.14 $ 5.85 $ -- $ 6.14
Class I $ 7.73 $ 6.26 $ -- $ 7.73
Class R2 $ -- $ 6.12 $ -- $ 7.36
Class R3 $ -- $ 6.18 $ -- $ 7.36
Class R4 $ 7.58 $ 6.22 $ -- $ 7.58
Class R5 $ -- $ 6.23 $ -- $ 7.73
-------------------------------------------------------------------------------------------------------------------
* Including securities on loan, at value $ 159,106,813 $ 82,380,459 $ -- $ 241,487,272
-------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
5
RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
<Table>
<Caption>
RIVERSOURCE RIVERSOURCE
RIVERSOURCE RIVERSOURCE MID CAP MID CAP
MID CAP PARTNERS AGGRESSIVE GROWTH FUND GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA ADJUSTMENTS PRO FORMA COMBINED
YEAR ENDED MAY 31, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED)
INVESTMENT INCOME
Income:
Dividends $ 6,081,527 $ 2,337,208 $ -- $ 8,418,735
Interest 11,811 198 -- 12,009
Income distributions from affiliated
money market fund 359,498 120,455 -- 479,953
Fee income from securities
lending -- net 1,559,999 191,657 -- 1,751,656
Less foreign taxes withheld (7,152) (13,341) -- (20,493)
--------------------------------------------------------------------------------------------------------------------------
Total income 8,005,683 2,636,177 -- 10,641,860
--------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees
(Note 2) 3,971,795 3,280,397 (642,561)(a) 6,609,631
Distribution fees
Class A 1,149,120 637,734 -- 1,786,854
Class B 610,936 400,332 -- 1,011,268
Class C 34,970 20,799 -- 55,769
Class R2 -- 367 -- 367
Class R3 -- 16 -- 16
Transfer agency fees (Note 2)
Class A 1,223,725 1,073,857 113,304(b) 2,410,886
Class B 175,033 174,900 16,032(b) 365,965
Class C 9,760 9,071 884(b) 19,715
Class R2 -- 37 -- 37
Class R3 -- 3 -- 3
Class R4 1,861 73 -- 1,934
Class R5 -- 2 -- 2
Administrative services fees (Note 2) 349,587 232,850 (14,855)(c) 567,582
Plan administration services fees
Class R2 -- 183 -- 183
Class R3 -- 16 -- 16
Class R4 9,301 365 -- 9,666
Compensation of board members 16,784 10,979 -- 27,763
Custodian fees 119,770 90,270 -- 210,040
Printing and postage 121,205 121,100 -- 242,305
Registration fees (Note 2) 54,259 50,980 (25,490)(d) 79,749
Professional fees (Note 2) 37,405 35,118 (26,220)(e) 46,303
Other 35,306 17,874 -- 53,180
--------------------------------------------------------------------------------------------------------------------------
Total expenses 7,920,817 6,157,323 (578,906) 13,499,234
Expenses waived/reimbursed by
RiverSource Investments, LLC (Note
2) (2,630) (1,319,659) 1,320,230(f) (2,059)
Earnings and bank fee credits on cash
balances (Note 2) (7,882) (4,328) 12,210(g) --
--------------------------------------------------------------------------------------------------------------------------
Total net expenses 7,910,305 4,833,336 753,534 13,497,175
--------------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net 95,378 (2,197,159) (753,534) (2,855,315)
--------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (167,290,327) (167,062,145) -- (334,352,472)
Foreign currency transactions -- 1,226,575 -- 1,226,575
Options contracts written 577,378 -- -- 577,378
--------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (166,712,949) (165,835,570) -- (332,548,519)
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities
in foreign currencies (62,917,084) (97,905,763) -- (160,822,847)
--------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments and
foreign currencies (229,630,033) (263,741,333) -- (493,371,366)
--------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $(229,534,655) $(265,938,492) $ (753,534) $(496,226,681)
--------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
6
RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (SELLING FUND)
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited as to May 31, 2009)
1. BASIS OF COMBINATION
The unaudited pro forma combining statement of assets and liabilities and the
statement of operations reflect the accounts of the two funds at, and for, the
12-month period ending May 31, 2009. These statements have been derived from
financial statements prepared for the RiverSource Mid Cap Growth Fund and the
RiverSource Partners Aggressive Growth Fund as of May 31, 2009.
Each Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The primary investments
of each Fund are as follows:
RiverSource Mid Cap Growth Fund invests primarily in common stocks of mid-
capitalization companies.
RiverSource Partners Aggressive Growth Fund invests primarily in equity
securities of medium-sized U.S. companies.
The pro forma statements give effect to the proposed transfer of the assets and
liabilities of RiverSource Partners Aggressive Growth Fund in exchange for Class
A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5 shares
of RiverSource Mid Cap Growth Fund under U.S. generally accepted accounting
principles. The pro forma statements reflect estimates for the combined
RiverSource Mid Cap Growth Fund based on the increased asset level of the
Reorganization and associated economies of scale, adjusted to reflect current
fees.
The pro forma combining statements should be read in conjunction with the
historical financial statements of the funds incorporated by reference in the
Statement of Additional Information.
The pro forma statement of operations give effect to the proposed transaction on
the historical operations of the accounting survivor, RiverSource Mid Cap Growth
Fund, as if the transaction had occurred at the beginning of the year presented.
2. PRO FORMA ADJUSTMENTS
(a) To reflect the change in investment management services fees due to the
Reorganization.
(b) To adjust for closed account fees for each RiverSource Partners Aggressive
Growth Fund shareholder account that will be closed on the system as a
result of the Reorganization.
(c) To reflect the change in administrative services fees due to the
Reorganization.
(d) To reflect the reduction in registration fees due to the Reorganization.
(e) To reflect the reduction in audit fees due to the Reorganization.
(f) To adjust the expense reimbursement to reflect the net reduction in fees
resulting from the Reorganization per the agreement (through Nov. 30, 2009)
by RiverSource Investments, LLC and its affiliates to waive certain fees and
absorb certain expenses of the combined fund.
(g) To reflect the elimination of the earnings and bank fee credits on cash
balances.
7
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional Class
A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5 shares
of RiverSource Mid Cap Growth Fund at May 31, 2009, in connection with the
Reorganization. The following table reflects the number of RiverSource Mid Cap
Growth Fund shares assumed to be issued to the shareholders of the RiverSource
Partners Aggressive Growth Fund.
<Table>
<Caption>
RIVERSOURCE PARTNERS RIVERSOURCE MID CAP
AGGRESSIVE GROWTH FUND GROWTH FUND TOTAL PRO FORMA
SHARES ISSUED SHARES OUTSTANDING SHARES OUTSTANDING
--------------------------------------------------------------------------------------------------------------------
Class A 28,148,061 61,864,663 90,012,724
--------------------------------------------------------------------------------------------------------------------
Class B 4,959,612 9,081,214 14,040,826
--------------------------------------------------------------------------------------------------------------------
Class C 286,978 644,286 931,264
--------------------------------------------------------------------------------------------------------------------
Class I 9,219,691 9,618,813 18,838,504
--------------------------------------------------------------------------------------------------------------------
Class R2* 10,191 N/A 10,191
--------------------------------------------------------------------------------------------------------------------
Class R3* 2,298 N/A 2,298
--------------------------------------------------------------------------------------------------------------------
Class R4 11,995 427,917 439,912
--------------------------------------------------------------------------------------------------------------------
Class R5* 461 N/A 461
--------------------------------------------------------------------------------------------------------------------
</Table>
* The inception date for the RiverSource Mid Cap Growth Fund Class R2, Class
R3 and Class R5 shares is expected to be in the first quarter of 2010.
8
COMBINED PORTFOLIO OF INVESTMENTS
RiverSource Mid Cap Growth Fund
MAY 31, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (97.0%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE RIVERSOURCE RIVERSOURCE
RIVERSOURCE PARTNERS MID CAP RIVERSOURCE PARTNERS MID CAP
MID CAP AGGRESSIVE GROWTH FUND MID CAP AGGRESSIVE GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA COMBINED GROWTH FUND GROWTH FUND PRO FORMA COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
AEROSPACE & DEFENSE (0.7%)
BE Aerospace -- 44,071 44,071(b) $ -- $ 655,776 $ 655,776
Precision Castparts 29,322 40,013 69,335 2,421,118 3,303,874 5,724,992
-----------------------------------------------------
Total 2,421,118 3,959,650 6,380,768
-----------------------------------------------------
AIR FREIGHT & LOGISTICS (0.7%)
CH Robinson
Worldwide 52,950(d) 52,007 104,957 2,690,919 2,642,996 5,333,915
Expeditors Intl of
Washington -- 23,566(d) 23,566 -- 773,200 773,200
-----------------------------------------------------
Total 2,690,919 3,416,196 6,107,115
-----------------------------------------------------
AIRLINES (1.2%)
AMR 573,431 -- 573,431(b) 2,551,768 -- 2,551,768
Continental
Airlines Cl B 259,461(d) 71,080(d) 330,541(b) 2,418,177 662,466 3,080,643
Delta Air Lines 442,388 -- 442,388(b) 2,570,274 -- 2,570,274
UAL 554,783 -- 554,783(b) 2,585,289 -- 2,585,289
-----------------------------------------------------
Total 10,125,508 662,466 10,787,974
-----------------------------------------------------
AUTO COMPONENTS (0.1%)
Autoliv -- 33,610(d) 33,610(c) -- 933,686 933,686
-----------------------------------------------------
AUTOMOBILES (0.1%)
Harley-Davidson -- 41,096(d) 41,096 -- 697,399 697,399
-----------------------------------------------------
BEVERAGES (0.1%)
Hansen Natural -- 35,740(d) 35,740(b) -- 1,310,943 1,310,943
-----------------------------------------------------
BIOTECHNOLOGY (2.1%)
Alexion
Pharmaceuticals -- 95,251(d) 95,251(b) -- 3,476,662 3,476,662
BioMarin
Pharmaceutical 318,375(d) -- 318,375(b) 4,450,882 -- 4,450,882
Celera 453,570(d) -- 453,570(b) 3,433,525 -- 3,433,525
Genzyme 65,497(d) -- 65,497(b) 3,873,493 -- 3,873,493
Myriad Genetics -- 25,040 25,040(b) -- 905,446 905,446
OSI Pharmaceuticals 64,046(d) -- 64,046(b) 2,164,755 -- 2,164,755
United Therapeutics -- 13,180(d) 13,180(b) -- 1,056,377 1,056,377
-----------------------------------------------------
Total 13,922,655 5,438,485 19,361,140
-----------------------------------------------------
CAPITAL MARKETS (2.8%)
Greenhill & Co -- 6,754(d) 6,754 -- 496,419 496,419
Janus Capital Group 123,031(d) 168,516(d) 291,547 1,247,534 1,708,752 2,956,286
Jefferies Group -- 58,877(d) 58,877 -- 1,273,510 1,273,510
Lazard Cl A -- 39,649(d) 39,649(c) -- 1,121,274 1,121,274
Legg Mason 118,302(d) -- 118,302 2,280,863 -- 2,280,863
Morgan Stanley -- 80,661(d) 80,661 -- 2,445,642 2,445,642
Northern Trust 17,185(d) 40,910(d) 58,095 990,715 2,358,462 3,349,177
T Rowe Price Group -- 65,460(d) 65,460 -- 2,655,711 2,655,711
TD Ameritrade
Holding 339,232 105,458 444,690(b) 5,780,513 1,797,004 7,577,517
Waddell & Reed
Financial Cl A -- 35,673(d) 35,673 -- 870,421 870,421
-----------------------------------------------------
Total 10,299,625 14,727,195 25,026,820
-----------------------------------------------------
</Table>
9
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE RIVERSOURCE RIVERSOURCE
RIVERSOURCE PARTNERS MID CAP RIVERSOURCE PARTNERS MID CAP
MID CAP AGGRESSIVE GROWTH FUND MID CAP AGGRESSIVE GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA COMBINED GROWTH FUND GROWTH FUND PRO FORMA COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
CHEMICALS (2.2%)
Agrium -- 21,676 21,676(c) $ -- $ 1,066,893 $ 1,066,893
Airgas 47,028 24,370 71,398 1,987,403 1,029,876 3,017,279
Celanese Series A -- 93,127 93,127 -- 1,910,034 1,910,034
CF Inds Holdings -- 37,350 37,350 -- 2,899,853 2,899,853
Ecolab -- 39,720 39,720 -- 1,483,542 1,483,542
Monsanto -- 18,792 18,792 -- 1,543,763 1,543,763
Mosaic 31,306(e) 19,725 51,031 1,712,438 1,078,958 2,791,396
Potash Corp of
Saskatchewan 16,044(e) -- 16,044(c) 1,858,537 -- 1,858,537
Scotts Miracle-Gro
Cl A -- 45,162(d) 45,162 -- 1,549,057 1,549,057
Syngenta -- 5,077 5,077(c) -- 1,238,611 1,238,611
Terra Inds -- 15,573 15,573 -- 432,774 432,774
-----------------------------------------------------
Total 5,558,378 14,233,361 19,791,739
-----------------------------------------------------
COMMERCIAL BANKS (1.2%)
TCF Financial 691,607(d) -- 691,607 9,931,476 -- 9,931,476
Zions
Bancorporation 64,972(d) -- 64,972 888,817 -- 888,817
-----------------------------------------------------
Total 10,820,293 -- 10,820,293
-----------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (0.5%)
Copart 80,447(d) -- 80,447(b) 2,468,918 -- 2,468,918
Stericycle -- 15,650(d) 15,650(b) -- 782,187 782,187
Tetra Tech -- 32,824(d) 32,824(b) -- 842,592 842,592
-----------------------------------------------------
Total 2,468,918 1,624,779 4,093,697
-----------------------------------------------------
COMMUNICATIONS EQUIPMENT (4.2%)
Ciena 1,208,194(d,e) -- 1,208,194(b) 13,290,135 -- 13,290,135
CommScope -- 22,373 22,373(b) -- 587,068 587,068
Corning -- 163,139 163,139 -- 2,398,143 2,398,143
F5 Networks 29,863(d) 81,190(d) 111,053(b) 948,449 2,578,595 3,527,044
Juniper Networks 302,077 100,110(d) 402,187(b) 7,470,364 2,475,720 9,946,084
Motorola 225,808 -- 225,808 1,368,396 -- 1,368,396
ORBCOMM 771,620(d) -- 771,620(b) 1,188,295 -- 1,188,295
Riverbed Technology 231,191(d) 31,580(d) 262,771(b) 4,644,627 634,442 5,279,069
-----------------------------------------------------
Total 28,910,266 8,673,968 37,584,234
-----------------------------------------------------
COMPUTERS & PERIPHERALS (0.6%)
NetApp 74,883(d) -- 74,883(b) 1,460,219 -- 1,460,219
Seagate Technology 399,374 -- 399,374(c) 3,478,547 -- 3,478,547
Western Digital -- 35,727 35,727(b) -- 887,816 887,816
-----------------------------------------------------
Total 4,938,766 887,816 5,826,582
-----------------------------------------------------
CONSTRUCTION AND ENGINEERING (4.0%)
AECOM Technology -- 90,409(d) 90,409(b) -- 2,884,951 2,884,951
Chicago Bridge &
Iron 310,541 -- 310,541(c) 4,009,084 -- 4,009,084
EMCOR Group 196,936(d) -- 196,936(b) 4,425,152 -- 4,425,152
Fluor 86,901 -- 86,901 4,082,609 -- 4,082,609
Foster Wheeler 108,254 -- 108,254(b) 2,870,896 -- 2,870,896
Jacobs Engineering
Group 43,414 18,660 62,074(b) 1,862,461 800,514 2,662,975
Quanta Services 320,220(d) 181,685(d) 501,905(b) 7,304,218 4,144,235 11,448,453
Shaw Group 56,984 29,613 86,597(b) 1,549,965 805,474 2,355,439
URS -- 32,975 32,975(b) -- 1,585,438 1,585,438
-----------------------------------------------------
Total 26,104,385 10,220,612 36,324,997
-----------------------------------------------------
CONSTRUCTION MATERIALS (0.4%)
Martin Marietta
Materials 35,799(d) 9,640 45,439 2,916,545 785,371 3,701,916
-----------------------------------------------------
</Table>
10
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE RIVERSOURCE RIVERSOURCE
RIVERSOURCE PARTNERS MID CAP RIVERSOURCE PARTNERS MID CAP
MID CAP AGGRESSIVE GROWTH FUND MID CAP AGGRESSIVE GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA COMBINED GROWTH FUND GROWTH FUND PRO FORMA COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
CONSUMER FINANCE (0.5%)
First Marblehead 1,011,978(d) -- 1,011,978(b) $ 1,796,261 $ -- $ 1,796,261
SLM 442,095(d) -- 442,095(b) 2,922,248 -- 2,922,248
-----------------------------------------------------
Total 4,718,509 -- 4,718,509
-----------------------------------------------------
CONTAINERS & PACKAGING (0.3%)
Crown Holdings -- 104,759 104,759(b) -- 2,461,837 2,461,837
-----------------------------------------------------
DISTRIBUTORS (0.4%)
LKQ 231,148(d) -- 231,148(b) 3,534,253 -- 3,534,253
-----------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.2%)
Apollo Group Cl A 22,959 -- 22,959(b) 1,356,877 -- 1,356,877
Corinthian Colleges -- 47,241(d) 47,241(b) -- 726,567 726,567
-----------------------------------------------------
Total 1,356,877 726,567 2,083,444
-----------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.7%)
CME Group -- 2,804(d) 2,804 -- 901,879 901,879
IntercontinentalEx-
change 12,539(d) 33,155(d) 45,694(b) 1,351,579 3,573,776 4,925,355
MSCI Cl A -- 41,310 41,310(b) -- 878,664 878,664
-----------------------------------------------------
Total 1,351,579 5,354,319 6,705,898
-----------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.2%)
FairPoint
Communications 1,760,028(d) -- 1,760,028 1,777,628 -- 1,777,628
-----------------------------------------------------
ELECTRIC UTILITIES (0.2%)
PPL -- 63,060 63,060 -- 2,047,558 2,047,558
-----------------------------------------------------
ELECTRICAL EQUIPMENT (4.7%)
Energy Conversion
Devices 270,655(d) -- 270,655(b) 4,657,973 -- 4,657,973
Evergreen Solar 3,076,720(d) -- 3,076,720(b) 5,722,699 -- 5,722,699
First Solar 28,951(d) 3,390(d) 32,341(b) 5,500,690 644,100 6,144,790
General Cable 130,315(e) -- 130,315(b) 4,983,246 -- 4,983,246
Hubbell Cl B 264,169 -- 264,169 8,773,052 -- 8,773,052
JA Solar Holdings
ADR 395,851(d) -- 395,851(b,c) 1,674,450 -- 1,674,450
Real Goods Solar Cl
A 532,772(d) -- 532,772(b) 1,097,510 -- 1,097,510
SunPower Cl A 80,184(d) -- 80,184(b) 2,336,562 -- 2,336,562
Suntech Power
Holdings ADR 60,066(d) -- 60,066(b,c) 981,478 -- 981,478
Vesta Wind Systems -- 11,314 11,314(b,c) -- 833,610 833,610
Yingli Green Energy
Holding ADR 445,338(d,e) -- 445,338(b,c) 5,700,326 -- 5,700,326
-----------------------------------------------------
Total 41,427,986 1,477,710 42,905,696
-----------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (0.5%)
AU Optronics ADR -- 104,948(d) 104,948(c) -- 1,090,410 1,090,410
Itron 46,393(d) -- 46,393(b) 2,706,568 -- 2,706,568
LG.Philips LCD ADR -- 64,808(d) 64,808(c) -- 764,086 764,086
-----------------------------------------------------
Total 2,706,568 1,854,496 4,561,064
-----------------------------------------------------
ENERGY EQUIPMENT & SERVICES (3.5%)
Atwood Oceanics -- 63,998(d) 63,998(b) -- 1,693,387 1,693,387
BJ Services 335,478 -- 335,478 5,246,876 -- 5,246,876
Cameron Intl -- 116,648 116,648(b) -- 3,642,917 3,642,917
ENSCO Intl 109,279 -- 109,279 4,249,860 -- 4,249,860
Nabors Inds -- 155,781(d) 155,781(b,c) -- 2,785,364 2,785,364
Natl Oilwell Varco 90,143 -- 90,143(b) 3,481,323 -- 3,481,323
Noble 53,762 -- 53,762 1,847,800 -- 1,847,800
Oceaneering Intl -- 24,829(d) 24,829(b) -- 1,276,707 1,276,707
Smith Intl 64,736 -- 64,736 1,889,644 -- 1,889,644
Weatherford Intl 81,523 196,137 277,660(b) 1,687,526 4,060,036 5,747,562
-----------------------------------------------------
Total 18,403,029 13,458,411 31,861,440
-----------------------------------------------------
</Table>
11
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE RIVERSOURCE RIVERSOURCE
RIVERSOURCE PARTNERS MID CAP RIVERSOURCE PARTNERS MID CAP
MID CAP AGGRESSIVE GROWTH FUND MID CAP AGGRESSIVE GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA COMBINED GROWTH FUND GROWTH FUND PRO FORMA COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
FOOD & STAPLES RETAILING (0.2%)
Whole Foods Market -- 102,040(d) 102,040 $ -- $ 1,925,495 $ 1,925,495
-----------------------------------------------------
FOOD PRODUCTS (0.3%)
Dean Foods 121,839 -- 121,839(b) 2,290,573 -- 2,290,573
-----------------------------------------------------
GAS UTILITIES (0.1%)
Questar -- 32,570 32,570 -- 1,103,797 1,103,797
-----------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (3.6%)
Beckman Coulter -- 13,550 13,550 -- 734,410 734,410
CR Bard 39,937 -- 39,937 2,855,096 -- 2,855,096
Edwards
Lifesciences -- 13,009 13,009(b) -- 830,495 830,495
Haemonetics 16,302(d) -- 16,302(b) 867,755 -- 867,755
Hologic 334,549 -- 334,549(b) 4,238,736 -- 4,238,736
Intuitive Surgical 14,154(d) 5,510(d) 19,664(b) 2,118,571 824,737 2,943,308
St. Jude Medical 221,435 79,997 301,432(b) 8,640,394 3,121,482 11,761,876
Thoratec 106,973(d) -- 106,973(b) 2,682,883 -- 2,682,883
Varian Medical
Systems 163,809(d) -- 163,809(b) 5,857,810 -- 5,857,810
-----------------------------------------------------
Total 27,261,245 5,511,124 32,772,369
-----------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (3.7%)
AmerisourceBergen 78,620 29,530 108,150 2,916,802 1,095,563 4,012,365
CardioNet 83,065(d) -- 83,065(b) 1,471,081 -- 1,471,081
DaVita -- 26,570 26,570(b) -- 1,198,573 1,198,573
Express Scripts 71,024 86,837 157,861(b) 4,549,088 5,561,910 10,110,998
Laboratory Corp of
America Holdings -- 31,220 31,220(b) -- 1,903,171 1,903,171
MEDNAX 90,350(d) -- 90,350(b) 3,659,175 -- 3,659,175
Medco Health
Solutions -- 26,361 26,361(b) -- 1,209,706 1,209,706
Omnicare 92,711 109,599 202,310 2,505,978 2,962,461 5,468,439
Patterson Companies 167,721(d) -- 167,721(b) 3,453,375 -- 3,453,375
UnitedHealth Group -- 27,652 27,652 -- 735,543 735,543
-----------------------------------------------------
Total 18,555,499 14,666,927 33,222,426
-----------------------------------------------------
HEALTH CARE TECHNOLOGY (0.2%)
Cemer -- 29,746(d) 29,746(b) -- 1,733,894 1,733,894
-----------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (4.5%)
Boyd Gaming -- 36,368(d) 36,368 -- 365,135 365,135
Brinker Intl -- 90,021(d) 90,021 -- 1,611,376 1,611,376
Cheesecake Factory -- 45,965(d) 45,965(b) -- 786,461 786,461
Ctrip.com Intl ADR -- 20,433(d) 20,433(c) -- 836,731 836,731
Darden Restaurants 60,801(d) 73,554(d) 134,355 2,199,172 2,660,448 4,859,620
Intl Game
Technology 211,333(d,e) 25,716(d) 237,049 3,668,741 446,430 4,115,171
Las Vegas Sands -- 151,656(d) 151,656(b) -- 1,502,911 1,502,911
Marriott Intl Cl A 94,940(d) -- 94,940 2,217,798 -- 2,217,798
Melco PBL
Entertainment Macau
ADR -- 70,581(d) 70,581(b,c) -- 424,898 424,898
MGM MIRAGE 145,049 -- 145,049(b) 1,082,066 -- 1,082,066
Penn Natl Gaming -- 73,786 73,786(b) -- 2,440,103 2,440,103
PF Chang's China
Bistro -- 25,798 25,798(b) -- 823,988 823,988
Pinnacle
Entertainment 129,465(d,e) 70,319 199,784(b) 1,378,802 748,897 2,127,699
Royal Caribbean
Cruises -- 49,059 49,059 -- 738,829 738,829
Starbucks 260,954 -- 260,954(b) 3,755,129 -- 3,755,129
Starwood Hotels &
Resorts Worldwide 136,173(d) 95,440(d) 231,613 3,332,153 2,335,417 5,667,570
</Table>
12
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE RIVERSOURCE RIVERSOURCE
RIVERSOURCE PARTNERS MID CAP RIVERSOURCE PARTNERS MID CAP
MID CAP AGGRESSIVE GROWTH FUND MID CAP AGGRESSIVE GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA COMBINED GROWTH FUND GROWTH FUND PRO FORMA COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
HOTELS, RESTAURANTS & LEISURE (CONT.)
WMS Inds -- 96,475(d) 96,475(b) $ -- $ 3,421,968 $ 3,421,968
Wynn Resorts -- 52,741(d) 52,741(b) -- 1,954,581 1,954,581
Yum! Brands -- 64,010 64,010 -- 2,216,666 2,216,666
-----------------------------------------------------
Total 17,633,861 23,314,839 40,948,700
-----------------------------------------------------
HOUSEHOLD DURABLES (1.0%)
DR Horton -- 148,050(d) 148,050 -- 1,363,541 1,363,541
KB Home 124,767(d) 106,847 231,614 1,871,505 1,602,705 3,474,210
NVR -- 1,605 1,605(b) -- 794,315 794,315
Pulte Homes -- 166,890(d) 166,890 -- 1,468,632 1,468,632
Toll Brothers -- 90,588(d) 90,588(b) -- 1,683,124 1,683,124
-----------------------------------------------------
Total 1,871,505 6,912,317 8,783,822
-----------------------------------------------------
HOUSEHOLD PRODUCTS (0.2%)
Clorox -- 13,940(d) 13,940 -- 731,014 731,014
Energizer Holdings -- 14,560 14,560(b) -- 760,905 760,905
-----------------------------------------------------
Total -- 1,491,919 1,491,919
-----------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.2%)
Ormat Technologies 36,117(d) -- 36,117 1,440,707 -- 1,440,707
-----------------------------------------------------
INDUSTRIAL CONGLOMERATES (0.3%)
McDermott Intl -- 134,469 134,469(b) -- 2,954,284 2,954,284
-----------------------------------------------------
INSURANCE (0.4%)
Fidelity Natl
Financial Cl A -- 59,000 59,000 -- 822,460 822,460
XL Capital Cl A 287,689(e) -- 287,689(c) 2,911,413 -- 2,911,413
-----------------------------------------------------
Total 2,911,413 822,460 3,733,873
-----------------------------------------------------
INTERNET & CATALOG RETAIL (0.4%)
NetFlix -- 20,663(d) 20,663(b) -- 814,535 814,535
Orbitz Worldwide 823,365(d) -- 823,365(b) 1,778,468 -- 1,778,468
priceline.com -- 12,940(d) 12,940(b) -- 1,424,824 1,424,824
-----------------------------------------------------
Total 1,778,468 2,239,359 4,017,827
-----------------------------------------------------
INTERNET SOFTWARE & SERVICES (3.2%)
Akamai Technologies 541,488(d) -- 541,488(b) 12,053,523 -- 12,053,523
Digital River -- 25,469(d) 25,469(b) -- 971,133 971,133
Equinix -- 11,641(d) 11,641(b) -- 866,090 866,090
MercadoLibre -- 25,120 25,120(b,c) -- 543,597 543,597
NetEase.com ADR -- 57,937(d) 57,937(b,c) -- 2,003,461 2,003,461
Omniture 128,501(d) -- 128,501(b) 1,518,882 -- 1,518,882
VeriSign -- 54,570(d) 54,570(b) -- 1,277,484 1,277,484
VistaPrint 232,115(d,e) 20,858(d) 252,973(b,c) 8,887,683 798,653 9,686,336
-----------------------------------------------------
Total 22,460,088 6,460,418 28,920,506
-----------------------------------------------------
IT SERVICES (0.4%)
Fiserv -- 22,690 22,690(b) -- 961,148 961,148
ManTech Intl Cl A 25,478(d) -- 25,478(b) 977,081 -- 977,081
Paychex -- 70,270(d) 70,270 -- 1,923,290 1,923,290
-----------------------------------------------------
Total 977,081 2,884,438 3,861,519
-----------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.5%)
Eastman Kodak 1,833,273(d) -- 1,833,273 4,784,843 -- 4,784,843
-----------------------------------------------------
</Table>
13
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE RIVERSOURCE RIVERSOURCE
RIVERSOURCE PARTNERS MID CAP RIVERSOURCE PARTNERS MID CAP
MID CAP AGGRESSIVE GROWTH FUND MID CAP AGGRESSIVE GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA COMBINED GROWTH FUND GROWTH FUND PRO FORMA COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
LIFE SCIENCES TOOLS & SERVICES (0.6%)
Illumina 84,821(d) 56,400(d) 141,221(b) $ 3,113,779 $ 2,070,444 $ 5,184,223
-----------------------------------------------------
MACHINERY (2.0%)
Bucyrus Intl 62,864(d,e) 44,231(d) 107,095 1,802,940 1,268,545 3,071,485
Cummins 46,052 -- 46,052 1,493,466 -- 1,493,466
ESCO Technologies -- 19,720(d) 19,720(b) -- 801,026 801,026
Flowserve 32,441 16,889 49,330 2,386,685 1,242,524 3,629,209
Ingersoll-Rand Cl A -- 35,844 35,844(c) -- 725,124 725,124
Joy Global 53,520 64,097(d) 117,617 1,844,834 2,209,424 4,054,258
Parker Hannifin -- 41,390 41,390 -- 1,749,141 1,749,141
Terex 167,732(d) -- 167,732(b) 2,250,963 -- 2,250,963
-----------------------------------------------------
Total 9,778,888 7,995,784 17,774,672
-----------------------------------------------------
MARINE (1.3%)
Diana Shipping -- 56,113(d) 56,113(c) -- 1,011,717 1,011,717
DryShips 635,367(d) -- 635,367(c) 5,197,302 -- 5,197,302
Genco Shipping &
Trading 200,920(d,e) 18,404 219,324 5,254,058 481,265 5,735,323
-----------------------------------------------------
Total 10,451,360 1,492,982 11,944,342
-----------------------------------------------------
MEDIA (0.6%)
DIRECTV Group -- 31,924(d) 31,924(b) -- 718,290 718,290
Regal Entertainment
Group Cl A 214,643 -- 214,643 2,738,844 -- 2,738,844
Sirius XM Radio 5,774,820 -- 5,774,820(b) 2,018,300 -- 2,018,300
-----------------------------------------------------
Total 4,757,144 718,290 5,475,434
-----------------------------------------------------
METALS & MINING (5.0%)
Agnico-Eagle Mines -- 16,029 16,029(c) -- 991,554 991,554
AK Steel Holding 518,193 57,059 575,252 7,410,159 815,944 8,226,103
Alcoa 313,881(d) 84,420(d) 398,301 2,893,983 778,352 3,672,335
Allegheny
Technologies 136,727(d) 22,103 158,830 4,841,503 782,667 5,624,170
Cliffs Natural
Resources 195,158 30,931 226,089 5,318,056 842,870 6,160,926
Companhia
Siderurgica
Nacional ADR -- 53,168 53,168(c) -- 1,303,679 1,303,679
Freeport-McMoRan
Copper & Gold 112,986 47,185 160,171 6,149,828 2,568,280 8,718,108
Kinross Gold 29,936 48,163 78,099(c) 605,306 973,856 1,579,162
Steel Dynamics -- 108,020(d) 108,020 -- 1,613,819 1,613,819
United States Steel 147,519 41,650 189,169 5,027,448 1,419,432 6,446,880
Yamana Gold 57,653 -- 57,653(c) 678,576 -- 678,576
-----------------------------------------------------
Total 32,924,859 12,090,453 45,015,312
-----------------------------------------------------
MULTILINE RETAIL (1.6%)
Big Lots -- 35,067 35,067(b) -- 806,892 806,892
Dollar Tree -- 56,452 56,452(b) -- 2,527,356 2,527,356
Family Dollar
Stores -- 79,261 79,261 -- 2,399,230 2,399,230
JC Penney 80,591(d) -- 80,591 2,102,619 -- 2,102,619
Kohl's -- 54,860 54,860(b) -- 2,329,904 2,329,904
Nordstrom 133,636(d) 64,830(d) 198,466 2,631,293 1,276,503 3,907,796
-----------------------------------------------------
Total 4,733,912 9,339,885 14,073,797
-----------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (7.2%)
Alpha Natural
Resources -- 27,140(d) 27,140(b) -- 747,707 747,707
Arch Coal 129,918(d) -- 129,918 2,407,381 -- 2,407,381
Chesapeake Energy 102,043 -- 102,043 2,312,294 -- 2,312,294
CONSOL Energy 73,466(e) 40,650 114,116 3,023,861 1,673,154 4,697,015
Continental
Resources -- 30,524(d) 30,524(b) -- 903,816 903,816
Denbury Resources 207,964(d) 73,390 281,354(b) 3,574,901 1,261,574 4,836,475
</Table>
14
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE RIVERSOURCE RIVERSOURCE
RIVERSOURCE PARTNERS MID CAP RIVERSOURCE PARTNERS MID CAP
MID CAP AGGRESSIVE GROWTH FUND MID CAP AGGRESSIVE GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA COMBINED GROWTH FUND GROWTH FUND PRO FORMA COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
OIL, GAS & CONSUMABLE FUELS (CONT.)
El Paso 481,374 -- 481,374 $ 4,693,396 $ -- $ 4,693,396
Frontier Oil 258,796 -- 258,796 4,521,165 -- 4,521,165
Murphy Oil 39,069 -- 39,069 2,305,462 -- 2,305,462
Newfield
Exploration 166,656 -- 166,656(b) 6,019,614 -- 6,019,614
Petrohawk Energy 79,734(d) 196,455 276,189(b) 2,009,297 4,950,666 6,959,963
Range Resources 34,325 71,454(d) 105,779 1,572,428 3,273,308 4,845,736
Southwestern Energy 75,740(e) 101,073 176,813(b) 3,292,418 4,393,643 7,686,061
Tesoro 255,352(d) -- 255,352 4,325,663 -- 4,325,663
Ultra Petroleum -- 17,805 17,805(b) -- 806,210 806,210
Whiting Petroleum -- 27,341(d) 27,341(b) -- 1,281,199 1,281,199
Williams Companies 265,222 -- 265,222 4,450,425 -- 4,450,425
XTO Energy 29,201 -- 29,201 1,248,927 -- 1,248,927
-----------------------------------------------------
Total 45,757,232 19,291,277 65,048,509
-----------------------------------------------------
PAPER & FOREST PRODUCTS (0.4%)
Intl Paper 269,532 -- 269,532 3,873,175 -- 3,873,175
-----------------------------------------------------
PERSONAL PRODUCTS (0.3%)
Alberto-Culver -- 41,960 41,960 -- 975,150 975,150
Avon Products -- 57,270(d) 57,270 -- 1,521,092 1,521,092
-----------------------------------------------------
Total -- 2,496,242 2,496,242
-----------------------------------------------------
PHARMACEUTICALS (2.2%)
Allergan 67,752 37,030 104,782 2,989,896 1,634,134 4,624,030
King
Pharmaceuticals 242,168(d) -- 242,168(b) 2,290,909 -- 2,290,909
Mylan 337,349(d) 110,190(d) 447,539(b) 4,456,380 1,455,610 5,911,990
Shire ADR 171,878(d) -- 171,878(c) 7,167,313 -- 7,167,313
-----------------------------------------------------
Total 16,904,498 3,089,744 19,994,242
-----------------------------------------------------
PROFESSIONAL SERVICES (0.2%)
Equifax -- 19,050 19,050 -- 518,541 518,541
Robert Half Intl -- 63,070(d) 63,070 -- 1,349,067 1,349,067
-----------------------------------------------------
Total -- 1,867,608 1,867,608
-----------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (0.3%)
Digital Realty
Trust -- 28,360(d) 28,360 -- 1,014,437 1,014,437
Redwood Trust 96,508 -- 96,508 1,536,407 -- 1,536,407
-----------------------------------------------------
Total 1,536,407 1,014,437 2,550,844
-----------------------------------------------------
ROAD & RAIL (1.1%)
Con-way 78,196(e) -- 78,196 2,510,092 -- 2,510,092
Hertz Global
Holdings 133,575(d) -- 133,575(b) 914,989 -- 914,989
JB Hunt Transport
Services 46,038(d) -- 46,038 1,414,748 -- 1,414,748
Kansas City
Southern 162,832 -- 162,832(b) 2,685,099 -- 2,685,099
Ryder System 72,633(d) -- 72,633 2,046,798 -- 2,046,798
-----------------------------------------------------
Total 9,571,726 -- 9,571,726
-----------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (6.9%)
Altera 146,313(d) 117,346(d) 263,659 2,490,247 1,997,229 4,487,476
ASML Holding 136,887(d) 77,885(d) 214,772(c) 2,833,561 1,612,220 4,445,781
Atheros
Communications -- 95,620(d) 95,620(b) -- 1,602,591 1,602,591
Broadcom Cl A 173,654(d) 216,134(d) 389,788(b) 4,424,704 5,507,095 9,931,799
KLA-Tencor -- 64,950(d) 64,950 -- 1,753,650 1,753,650
Lam Research -- 75,330 75,330(b) -- 1,972,893 1,972,893
Marvell Technology
Group -- 147,844 147,844(b,c) -- 1,689,857 1,689,857
MEMC Electronic
Materials 185,609 -- 185,609(b) 3,580,398 -- 3,580,398
</Table>
15
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE RIVERSOURCE RIVERSOURCE
RIVERSOURCE PARTNERS MID CAP RIVERSOURCE PARTNERS MID CAP
MID CAP AGGRESSIVE GROWTH FUND MID CAP AGGRESSIVE GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA COMBINED GROWTH FUND GROWTH FUND PRO FORMA COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONT.)
Micron Technology -- 286,170 286,170(b) $ -- $ 1,448,020 $ 1,448,020
Microchip
Technology 96,702(d) -- 96,702 2,085,862 -- 2,085,862
Microsemi -- 121,621 121,621(b) -- 1,637,019 1,637,019
NVIDIA 176,367(d) -- 176,367(b) 1,839,508 -- 1,839,508
PMC-Sierra 2,039,446(d) 470,601(d) 2,510,047(b) 15,479,395 3,571,862 19,051,257
Semtech -- 76,116(d) 76,116(b) -- 1,224,706 1,224,706
Silicon
Laboratories -- 38,211(d) 38,211(b) -- 1,284,654 1,284,654
Teradyne -- 264,045(d) 264,045(b) -- 1,887,922 1,887,922
Varian
Semiconductor
Equipment
Associates -- 48,187(d) 48,187(b) -- 1,133,358 1,133,358
Xilinx -- 42,749(d) 42,749 -- 886,614 886,614
-----------------------------------------------------
Total 32,733,675 29,209,690 61,943,365
-----------------------------------------------------
SOFTWARE (7.3%)
Activision Blizzard 303,172 136,160 439,332(b) 3,662,318 1,644,813 5,307,131
Adobe Systems -- 61,320 61,320(b) -- 1,727,998 1,727,998
BMC Software -- 35,460 35,460(b) -- 1,209,186 1,209,186
Citrix Systems 345,450(d) -- 345,450(b) 10,850,584 -- 10,850,584
CommVault Systems 158,982 -- 158,982(b) 1,963,428 -- 1,963,428
Compuware 573,659 -- 573,659(b) 4,377,018 -- 4,377,018
Informatica 187,759(d) -- 187,759(b) 3,066,104 -- 3,066,104
Intuit 65,648 -- 65,648(b) 1,786,939 -- 1,786,939
Macrovision
Solutions -- 108,830 108,830(b) -- 2,456,293 2,456,293
McAfee -- 137,645 137,645(b) -- 5,399,812 5,399,812
Novell 678,030 -- 678,030(b) 2,820,605 -- 2,820,605
Salesforce.com -- 30,030(d) 30,030(b) -- 1,139,639 1,139,639
Shanda Interactive
Entertainment ADR -- 37,263(d) 37,263(b,c) -- 2,147,094 2,147,094
TIBCO Software 2,419,786(d) -- 2,419,786(b) 16,043,180 -- 16,043,180
VMware Cl A 172,342(d) -- 172,342(b) 5,349,496 -- 5,349,496
-----------------------------------------------------
Total 49,919,672 15,724,835 65,644,507
-----------------------------------------------------
SPECIALTY RETAIL (4.8%)
Abercrombie & Fitch
Cl A 82,648(d) -- 82,648 2,488,531 -- 2,488,531
Advance Auto Parts -- 38,723(d) 38,723 -- 1,649,213 1,649,213
Aeropostale -- 55,146(d) 55,146(b) -- 1,909,155 1,909,155
American Eagle
Outfitters 193,924(d) -- 193,924 2,872,014 -- 2,872,014
Bed Bath & Beyond -- 27,168(d) 27,168(b) -- 763,692 763,692
Best Buy -- 48,268(d) 48,268 -- 1,694,207 1,694,207
Dick's Sporting
Goods 287,983(d) -- 287,983(b) 5,126,098 -- 5,126,098
GameStop Cl A 108,903(d) -- 108,903(b) 2,717,130 -- 2,717,130
Gap 67,557 -- 67,557 1,205,892 -- 1,205,892
GUESS? -- 94,230 94,230 -- 2,433,019 2,433,019
Limited Brands 189,144(d) -- 189,144 2,366,191 -- 2,366,191
O'Reilly Automotive -- 53,466(d) 53,466(b) -- 1,927,449 1,927,449
Ross Stores -- 51,628 51,628 -- 2,021,752 2,021,752
Tiffany & Co 117,537(d) -- 117,537 3,334,525 -- 3,334,525
TJX Companies 109,210(d) -- 109,210 3,222,787 -- 3,222,787
Urban Outfitters 272,989(d) 109,000(d) 381,989(b) 5,574,436 2,225,780 7,800,216
-----------------------------------------------------
Total 28,907,604 14,624,267 43,531,871
-----------------------------------------------------
</Table>
16
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE RIVERSOURCE RIVERSOURCE
RIVERSOURCE PARTNERS MID CAP RIVERSOURCE PARTNERS MID CAP
MID CAP AGGRESSIVE GROWTH FUND MID CAP AGGRESSIVE GROWTH FUND
GROWTH FUND GROWTH FUND PRO FORMA COMBINED GROWTH FUND GROWTH FUND PRO FORMA COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
TEXTILES, APPAREL & LUXURY GOODS (0.7%)
Coach -- 92,651 92,651(b) $ -- $ 2,433,941 $ 2,433,941
Deckers Outdoor -- 1,560 1,560(b) -- 90,418 90,418
luluemon athletica 238,014(d,e) -- 238,014(b,c) 3,006,117 -- 3,006,117
Warnaco Group -- 17,130 17,130(b) -- 541,308 541,308
-----------------------------------------------------
Total 3,006,117 3,065,667 6,071,784
-----------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.8%)
MGIC Investment 958,004(d,e) -- 958,004 4,176,898 -- 4,176,898
Radian Group 1,227,575 -- 1,227,575 3,474,037 -- 3,474,037
-----------------------------------------------------
Total 7,650,935 -- 7,650,935
-----------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.3%)
Fastenal 44,302(d) 30,030(d) 74,332 1,471,712 997,597 2,469,309
-----------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (2.1%)
American Tower Cl A 73,968 85,796 159,764(b) 2,357,360 2,734,319 5,091,679
Leap Wireless Intl -- 20,437(d) 20,437(b) -- 766,183 766,183
MetroPCS
Communications -- 151,267(d) 151,267(b) -- 2,591,204 2,591,204
Millicom Intl
Cellular -- 19,770 19,770(c) -- 1,200,039 1,200,039
NII Holdings 162,619(e) -- 162,619(b) 3,327,185 -- 3,327,185
SBA Communications
Cl A -- 164,280 164,280(b) -- 4,200,639 4,200,639
Sprint Nextel -- 314,159 314,159(b) -- 1,617,919 1,617,919
-----------------------------------------------------
Total 5,684,545 13,110,303 18,794,848
-----------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost:
$880,020,326) $571,196,328 $305,173,601 $ 876,369,929
-----------------------------------------------------------------------------------------------------------------------------
<Caption>
EXCHANGE TRADED FUND (0.2%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
iShares Russell
2000 Index Fund -- 15,989(d) 15,989 $ -- $ 803,767 $ 803,767
NASDAQ-100 Shares
ETF -- 23,010(d) 23,010 -- 815,935 815,935
-----------------------------------------------------------------------------------------------------------------------------
TOTAL EXCHANGE
TRADED FUND
(Cost: $1,425,375) $ -- $ 1,619,702 $ 1,619,702
-----------------------------------------------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (3.0%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RiverSource Short-
Term Cash Fund,
0.27% 20,728,928 6,267,942 26,996,870(f) $ 20,728,928 $ 6,267,942 $ 26,996,870
-----------------------------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET
FUND
(Cost: $26,996,870) $ 20,728,928 $ 6,267,942 $ 26,996,870
-----------------------------------------------------------------------------------------------------------------------------
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (26.8%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime
Money Market Fund 159,610,178 82,868,414 242,478,592 $159,610,178 $ 82,868,414 $ 242,478,592
-----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost:
$242,478,592) $159,610,178 $ 82,868,414 $ 242,478,592
-----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost:
$1,150,921,163)(g) $751,535,434 $395,929,659 $1,147,465,093
-----------------------------------------------------------------------------------------------------------------------------
</Table>
17
INVESTMENTS IN DERIVATIVES
OPEN OPTIONS CONTRACTS WRITTEN AT MAY 31, 2009
RIVERSOURCE MID CAP GROWTH FUND
<Table>
<Caption>
NUMBER OF EXERCISE PREMIUM EXPIRATION
ISSUER PUTS/CALLS CONTRACTS PRICE RECEIVED DATE VALUE (a)
---------------------------------------------------------------------------------------------------------------------
Bucyrus Intl Call 65 $30.00 $3,510 June 2009 $8,125
Ciena Call 973 12.50 29,190 June 2009 26,757
Con-way Call 162 32.50 18,225 June 2009 23,490
Con-way Call 162 35.00 9,752 June 2009 9,315
Genco Shipping & Trading Call 195 22.50 12,480 June 2009 82,875
General Cable Call 140 40.00 18,375 June 2009 21,000
Intl Game Technology Call 178 17.50 4,272 June 2009 14,240
lululemon athletica Call 480 15.00 29,520 June 2009 21,600
Mosaic Call 32 60.00 8,544 June 2009 3,200
NII Holdings Call 162 20.00 14,120 June 2009 23,085
Pinnacle Entertainment Call 130 12.50 7,020 June 2009 975
Potash Corp of Saskatchewan Call 16 125.00 4,912 June 2009 2,960
Southwestern Energy Call 78 45.00 4,992 June 2009 8,580
Yingli Green Energy Holding ADR Call 788 10.00 78,339 June 2009 232,460
Yingli Green Energy Holding ADR Call 324 12.50 22,375 June 2009 41,310
CONSOL Energy Call 74 45.00 16,798 July 2009 17,020
MGIC Investment Call 1,149 7.50 51,659 July 2009 8,618
VistaPrint Call 232 45.00 29,464 July 2009 11,600
XL Capital Cl A Call 292 12.50 20,324 July 2009 13,870
---------------------------------------------------------------------------------------------------------------------
Total $571,080
---------------------------------------------------------------------------------------------------------------------
</Table>
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT MAY 31, 2009
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND
<Table>
<Caption>
CURRENCY TO CURRENCY TO UNREALIZED UNREALIZED
EXCHANGE DATE BE DELIVERED BE RECEIVED APPRECIATION DEPRECIATION
----------------------------------------------------------------------------------------------------------------
June 2, 2009 387,954 357,420 $-- $(6,003)
Swiss Franc U.S. Dollar
----------------------------------------------------------------------------------------------------------------
June 30, 2009 2,276,943 424,300 -- (7,663)
Danish Krone U.S. Dollar
----------------------------------------------------------------------------------------------------------------
June 30, 2009 654,933 601,088 -- (12,521)
Swiss Franc U.S. Dollar
----------------------------------------------------------------------------------------------------------------
Total $-- $(26,187)
----------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO COMBINED PORTFOLIO OF INVESTMENTS
(a) Securities are valued by policies described in Note 1 to the financial
statements in the annual report.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At May 31, 2009, the
value of foreign securities represented 8.3% of net assets.
(d) At May 31, 2009, security was partially or fully on loan. See Note 6 to the
financial statements.
(e) At May 31, 2009, securities valued at $571,080 were held to cover open call
options written. See Note 7 to the financial statements.
(f) Affiliated Money Market Fund -- See Note 6 and/or 7 to the financial
statements in the annual report. The rate shown is the seven-day current
annualized yield at May 31, 2009.
(g) At May 31, 2009, the approximate cost of securities for federal income tax
purposes and the approximate aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
<Caption>
RIVERSOURCE
RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND
MID CAP AGGRESSIVE PRO FORMA
GROWTH FUND GROWTH FUND COMBINED
Cost of securities for federal income tax purposes: $773,900,000 $377,021,000 $1,150,921,000
Unrealized appreciation $ 71,041,000 $ 33,834,000 $ 104,875,000
Unrealized depreciation (93,406,000) (14,925,000) (108,331,000)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation/depreciation $(22,365,000) $ 18,909,000 $ (3,456,000)
---------------------------------------------------------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
18
RIVERSOURCE MID CAP VALUE FUND (BUYING FUND)
RIVERSOURCE PARTNERS SELECT VALUE FUND (SELLING FUND)
INTRODUCTION TO PROPOSED FUND REORGANIZATION
Sept. 30, 2009
The accompanying unaudited pro forma combining statement of assets and
liabilities and the statement of operations reflect the accounts of the two
funds at, and for, the 12-month period ending Sept. 30, 2009. These statements
have been derived from financial statements prepared for the RiverSource Mid Cap
Value Fund and the RiverSource Partners Select Value Fund as of Sept. 30, 2009.
RiverSource Mid Cap Value Fund invests primarily in equity securities of medium-
sized companies. RiverSource Partners Select Value Fund invests primarily in
equity securities of mid-cap companies as well as companies with larger and
smaller market capitalizations. For these purposes, RiverSource Partners Select
Value Fund considers mid-cap companies to be either those with a market
capitalization of up to $10 billion or those whose market capitalization falls
within the range of the Rusell Midcap Value Index.
Under the proposed Agreement and Plan of Reorganization, share classes of
RiverSource Partners Select Value Fund would be exchanged for share classes of
RiverSource Mid Cap Value Fund.
<Table>
<Caption>
SELLING FUND BUYING FUND
------------------------------------------------------------------------------------------
RiverSource Partners Select Value Fund Class A RiverSource Mid Cap Value Fund Class A
------------------------------------------------------------------------------------------
RiverSource Partners Select Value Fund Class B RiverSource Mid Cap Value Fund Class B
------------------------------------------------------------------------------------------
RiverSource Partners Select Value Fund Class C RiverSource Mid Cap Value Fund Class C
------------------------------------------------------------------------------------------
RiverSource Partners Select Value Fund Class I RiverSource Mid Cap Value Fund Class I
------------------------------------------------------------------------------------------
RiverSource Partners Select Value Fund Class R4 RiverSource Mid Cap Value Fund Class R4
------------------------------------------------------------------------------------------
</Table>
Note: RiverSource Mid Cap Value Fund also offers Class R2, Class R3, Class R5
and Class W shares.
The pro forma combining statements have been prepared to give effect to the
proposed transaction on the historical operations of the accounting survivor,
RiverSource Mid Cap Value Fund, as if the transaction had occurred at the
beginning of the fiscal year ending Sept. 30, 2009.
19
RIVERSOURCE MID CAP VALUE FUND (BUYING FUND)
RIVERSOURCE PARTNERS SELECT VALUE FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF ASSETS AND LIABILITIES
<Table>
<Caption>
RIVERSOURCE RIVERSOURCE
RIVERSOURCE RIVERSOURCE MID CAP MID CAP
MID CAP PARTNERS SELECT VALUE FUND PRO VALUE FUND PRO
VALUE FUND VALUE FUND FORMA ADJUSTMENTS FORMA COMBINED
SEPT. 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED)
ASSETS
Investments in securities, at cost
Unaffiliated issuers $2,105,577,016 $ 251,140,491 $ -- $2,356,717,507
Affiliated money market fund $ 11,050,066 $ 4,722,167 $ -- $ 15,772,233
Investments of cash collateral received for
securities on loan $ 534,488,133 $ 71,421,753 $ -- $ 605,909,886
------------------------------------------------------------------------
Investments in securities, at value
Unaffiliated issuers* $2,039,482,543 $ 288,931,801 $ -- $2,328,414,344
Affiliated money market fund $ 11,050,066 $ 4,722,167 $ -- $ 15,772,233
Investments of cash collateral received for
securities on loan $ 534,488,133 $ 71,421,753 $ -- $ 605,909,886
Cash -- 861,368 -- 861,368
Capital shares receivable 2,472,000 343,635 -- 2,815,635
Dividends and accrued interest receivable 2,953,904 356,366 -- 3,310,270
Receivable for investment securities sold 41,169,082 3,757,514 -- 44,926,596
----------------------------------------------------------------------------------------------------------------------------
Total assets 2,631,615,728 370,394,604 -- 3,002,010,332
----------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 3,627,984 673,607 -- 4,301,591
Payable for investment securities purchased 17,341,829 4,205,137 -- 21,546,966
Payable upon return of securities loaned 534,488,133 71,421,753 -- 605,909,886
Accrued investment management services fees 39,208 6,315 -- 45,523
Accrued distribution fees 657,214 98,327 -- 755,541
Accrued transfer agency fees 9,921 1,795 -- 11,716
Accrued administrative services fees 3,063 486 -- 3,549
Accrued plan administration services fees 159,139 29 -- 159,168
Other accrued expenses 300,389 119,398 -- 419,787
----------------------------------------------------------------------------------------------------------------------------
Total liabilities 556,626,880 76,526,847 -- 633,153,727
----------------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $2,074,988,848 $ 293,867,757 $ -- $2,368,856,605
----------------------------------------------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value (Note 3) $ 3,378,738 $ 772,554 $ (293,681) $ 3,857,611
Additional paid-in capital (Note 3) 2,707,993,687 382,546,734 293,681 3,090,834,102
Undistributed net investment income 21,282,632 5,078,312 -- 26,360,944
Accumulated net realized gain (loss) (591,571,519) (132,321,153) -- (723,892,672)
Unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities
in foreign currencies (66,094,690) 37,791,310 -- (28,303,380)
----------------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding capital stock $2,074,988,848 $ 293,867,757 $ -- $2,368,856,605
----------------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding
shares: Class A $1,351,336,081 $ 196,510,025 $ -- $1,547,846,106
Class B $ 104,322,229 $ 33,544,235 $ -- $ 137,866,464
Class C $ 41,952,034 $ 4,207,306 $ -- $ 46,159,340
Class I $ 44,213,966 $ 59,536,058 $ -- $ 103,750,024
Class R2 $ 15,826,707 $ -- $ -- $ 15,826,707
Class R3 $ 46,598,913 $ -- $ -- $ 46,598,913
Class R4 $ 337,592,770 $ 70,133 $ -- $ 337,662,903
Class R5 $ 133,143,010 $ -- $ -- $ 133,143,010
Class W $ 3,138 $ -- $ -- $ 3,138
Shares outstanding
(Note 3): Class A shares 219,846,167 51,516,617 (19,563,767) 251,799,017
Class B shares 17,668,539 9,216,959 (3,531,495) 23,354,003
Class C shares 7,101,337 1,159,555 (447,659) 7,813,233
Class I shares 7,069,592 15,344,041 (5,818,272) 16,595,361
Class R2 shares 2,592,379 -- -- 2,592,379
Class R3 shares 7,595,392 -- -- 7,595,392
Class R4 shares 54,533,230 18,230 (6,900) 54,544,560
Class R5 shares 21,466,665 -- -- 21,466,665
Class W shares 506 -- -- 506
Net asset value per share of outstanding capital
stock: Class A $ 6.15 $ 3.81 $ -- $ 6.15
Class B $ 5.90 $ 3.64 $ -- $ 5.90
Class C $ 5.91 $ 3.63 $ -- $ 5.91
Class I $ 6.25 $ 3.88 $ -- $ 6.25
Class R2 $ 6.11 $ -- $ -- $ 6.11
Class R3 $ 6.14 $ -- $ -- $ 6.14
Class R4 $ 6.19 $ 3.85 $ -- $ 6.19
Class R5 $ 6.20 $ -- $ -- $ 6.20
Class W $ 6.20 $ -- $ -- $ 6.20
----------------------------------------------------------------------------------------------------------------------------
* Including securities on loan, at value $ 515,287,645 $ 69,544,082 $ -- $ 584,831,727
----------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
20
RIVERSOURCE MID CAP VALUE FUND (BUYING FUND)
RIVERSOURCE PARTNERS SELECT VALUE FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
<Table>
<Caption>
RIVERSOURCE RIVERSOURCE
RIVERSOURCE RIVERSOURCE MID CAP MID CAP
MID CAP PARTNERS SELECT VALUE FUND PRO VALUE FUND PRO
VALUE FUND VALUE FUND FORMA ADJUSTMENTS FORMA COMBINED
YEAR ENDED SEPT. 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED)
INVESTMENT INCOME
Income:
Dividends $ 42,814,363 $ 7,592,049 $ -- $ 50,406,412
Interest 194,637 -- -- 194,637
Income distributions from affiliated money
market fund 160,374 9,143 -- 169,517
Fee income from securities lending -- net 1,779,334 139,113 -- 1,918,447
Less foreign taxes withheld (244,535) (8,165) -- (252,700)
----------------------------------------------------------------------------------------------------------------------
Total income 44,704,173 7,732,140 -- 52,436,313
----------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees (Note 2) 9,896,881 2,133,611 (720,372)(a) 11,310,120
Distribution fees
Class A 2,975,723 433,891 -- 3,409,614
Class B 1,048,865 339,696 -- 1,388,561
Class C 359,404 36,930 -- 396,334
Class R2 56,692 -- -- 56,692
Class R3 82,312 -- -- 82,312
Class W 7 -- -- 7
Transfer agency fees (Note 2)
Class A 3,265,308 592,192 68,020(b) 3,925,520
Class B 313,691 123,811 6,925(b) 444,427
Class C 101,381 12,971 1,977(b) 116,329
Class R2 5,669 -- -- 5,669
Class R3 16,463 -- -- 16,463
Class R4 121,461 29 -- 121,490
Class R5 46,632 -- -- 46,632
Class W 5 -- -- 5
Administrative services fees (Note 2) 946,227 151,494 (24,515)(c) 1,073,206
Plan administration services fees (Note 2)
Class R2 28,346 -- -- 28,346
Class R3 82,312 -- -- 82,312
Class R4 607,307 145 -- 607,452
Compensation of board members 56,160 8,156 -- 64,316
Custodian fees 143,700 365,000 -- 508,700
Printing and postage 381,575 57,905 -- 439,480
Registration fees (Note 2) 78,184 40,775 (20,388)(d) 98,571
Professional fees (Note 2) 66,844 30,570 (25,550)(e) 71,864
Other 53,744 11,488 -- 65,232
----------------------------------------------------------------------------------------------------------------------
Total expenses 20,734,893 4,338,664 (713,903) 24,359,654
Expenses waived/reimbursed by RiverSource
Investments, LLC (Note 2) (3,161) (826,807) 829,968(f) --
Earnings and bank fee credits on cash
balances (Note 2) (320) -- 320(g) --
----------------------------------------------------------------------------------------------------------------------
Total net expenses 20,731,412 3,511,857 116,385 24,359,654
----------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net 23,972,761 4,220,283 (116,385) 28,076,659
----------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (590,519,633) (115,216,561) -- (705,736,194)
Foreign currency transactions 20,727 522 -- 21,249
----------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (590,498,906) (115,216,039) -- (705,714,945)
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities in
foreign currencies 401,025,380 86,628,775 -- 487,654,155
----------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments and foreign
currencies (189,473,526) (28,587,264) -- (218,060,790)
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $(165,500,765) $ (24,366,981) $(116,385) $ 189,984,131)
----------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
21
RIVERSOURCE MID CAP VALUE FUND (BUYING FUND)
RIVERSOURCE PARTNERS SELECT VALUE FUND (SELLING FUND)
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited as to Sept. 30, 2009)
1. BASIS OF COMBINATION
The unaudited pro forma combining statement of assets and liabilities and the
statement of operations reflect the accounts of the two funds at, and for, the
12-month period ending Sept. 30, 2009. These statements have been derived from
financial statements prepared for the RiverSource Mid Cap Value Fund and the
RiverSource Partners Select Value Fund as of Sept. 30, 2009.
Each Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The primary investments
of each Fund are as follows:
RiverSource Mid Cap Value Fund invests primarily in equity securities of medium-
sized companies.
RiverSource Partners Select Value Fund invests primarily in equity securities of
mid-cap companies as well as companies with larger and smaller market
capitalizations. For these purposes, RiverSource Partners Select Value Fund
considers mid-cap companies to be either those with a market capitalization of
up to $10 billion or those whose market capitalization falls within the range of
the Rusell Midcap Value Index.
The pro forma statements give effect to the proposed transfer of the assets and
liabilities of RiverSource Partners Select Value Fund in exchange for Class A,
Class B, Class C, Class I and Class R4 shares of RiverSource Mid Cap Value Fund
under U.S. generally accepted accounting principles. The pro forma statements
reflect estimates for the combined RiverSource Mid Cap Value Fund based on the
increased asset level of the Reorganization and associated economies of scale,
adjusted to reflect current fees.
The pro forma combining statements should be read in conjunction with the
historical financial statements of the funds incorporated by reference in the
Statement of Additional Information.
The pro forma statement of operations give effect to the proposed transaction on
the historical operations of the accounting survivor, RiverSource Mid Cap Value
Fund, as if the transaction had occurred at the beginning of the year presented.
2. PRO FORMA ADJUSTMENTS
(a) To reflect the change in investment management services fees due to the
Reorganization.
(b) To adjust for closed account fees for each RiverSource Partners Select Value
Fund shareholder account that will be closed on the system as a result of
the Reorganization.
(c) To reflect the change in administrative services fees due to the
Reorganization.
(d) To reflect the reduction in registration fees due to the Reorganization.
(e) To reflect the reduction in audit fees due to the Reorganization.
(f) To adjust the expense reimbursement to reflect no reduction in fees
resulting from the Reorganization per the agreement by RiverSource
Investments, LLC and its affiliates to waive certain fees and absorb certain
expenses of the combined fund.
(g) To reflect the elimination of the earnings and bank fee credits on cash
balances.
22
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional Class
A, Class B, Class C, Class I and Class R4 shares of RiverSource Mid Cap Value
Fund at Sept. 30, 2009, in connection with the Reorganization. The following
table reflects the number of RiverSource Mid Cap Value Fund shares assumed to be
issued to the shareholders of the RiverSource Partners Select Value Fund.
<Table>
<Caption>
RIVERSOURCE PARTNERS RIVERSOURCE MID CAP
SELECT VALUE FUND VALUE FUND TOTAL PRO FORMA
SHARES ISSUED SHARES OUTSTANDING SHARES OUTSTANDING
--------------------------------------------------------------------------------------------------------------------
Class A 31,952,850 219,846,167 251,799,017
--------------------------------------------------------------------------------------------------------------------
Class B 5,685,464 17,668,539 23,354,003
--------------------------------------------------------------------------------------------------------------------
Class C 711,896 7,101,337 7,813,233
--------------------------------------------------------------------------------------------------------------------
Class I 9,525,769 7,069,592 16,595,361
--------------------------------------------------------------------------------------------------------------------
Class R2 N/A 2,592,379 2,592,379
--------------------------------------------------------------------------------------------------------------------
Class R3 N/A 7,595,392 7,595,392
--------------------------------------------------------------------------------------------------------------------
Class R4 11,330 54,533,230 54,544,560
--------------------------------------------------------------------------------------------------------------------
Class R5 N/A 21,466,665 21,466,665
--------------------------------------------------------------------------------------------------------------------
Class W N/A 506 506
--------------------------------------------------------------------------------------------------------------------
</Table>
23
COMBINED PORTFOLIO OF INVESTMENTS
RiverSource Mid Cap Value Fund
SEPT. 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (96.1%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE VALUE FUND RIVERSOURCE VALUE FUND
RIVERSOURCE PARTNERS SELECT PRO FORMA RIVERSOURCE PARTNERS SELECT PRO FORMA
MID CAP VALUE FUND COMBINED MID CAP VALUE FUND COMBINED
VALUE FUND (UNAUDITED) (UNAUDITED) VALUE FUND (UNAUDITED) (UNAUDITED)
AEROSPACE & DEFENSE (1.3%)
Esterline
Technologies -- 18,900 18,900(b) $ -- $ 741,069 $ 741,069
Goodrich 472,619 -- 472,619 25,682,116 -- 25,682,116
ITT -- 20,850 20,850 -- 1,087,328 1,087,328
TransDigm Group -- 72,002 72,002(b) -- 3,586,419 3,586,419
--------------------------------------------------------
Total 25,682,116 5,414,816 31,096,932
--------------------------------------------------------
AIRLINES (1.6%)
AMR 909,472 -- 909,472(b) 7,230,302 -- 7,230,302
Continental
Airlines Cl B 554,591(d) -- 554,591(b) 9,117,476 -- 9,117,476
Delta Air Lines 1,459,726 -- 1,459,726(b) 13,079,146 -- 13,079,146
UAL 384,243 -- 384,243(b) 3,542,720 -- 3,542,720
US Airways Group 1,138,711(d) -- 1,138,711(b) 5,351,942 -- 5,351,942
--------------------------------------------------------
Total 38,321,586 -- 38,321,586
--------------------------------------------------------
AUTO COMPONENTS (0.8%)
Autoliv -- 59,850(d) 59,850(c) -- 2,010,960 2,010,960
BorgWarner -- 81,600(d) 81,600 -- 2,469,216 2,469,216
Goodyear Tire &
Rubber 914,225(d) -- 914,225(b) 15,569,252 -- 15,569,252
--------------------------------------------------------
Total 15,569,252 4,480,176 20,049,428
--------------------------------------------------------
AUTOMOBILES (0.2%)
Ford Motor 625,231(d) -- 625,231(b) 4,507,916 -- 4,507,916
--------------------------------------------------------
BEVERAGES (0.2%)
Dr Pepper Snapple
Group -- 105,350 105,350(b) -- 3,028,813 3,028,813
Molson Coors
Brewing Cl B -- 35,400 35,400 -- 1,723,272 1,723,272
--------------------------------------------------------
Total -- 4,752,085 4,752,085
--------------------------------------------------------
CAPITAL MARKETS (1.3%)
Artio Global
Investors 110,798(d) -- 110,798(b) 2,897,368 -- 2,897,368
Invesco 944,886 154,200 1,099,086 21,505,605 3,509,592 25,015,197
State Street -- 21,250 21,250 -- 1,117,750 1,117,750
Stifel Financial -- 44,150(d) 44,150(b) -- 2,423,835 2,423,835
--------------------------------------------------------
Total 24,402,973 7,051,177 31,454,150
--------------------------------------------------------
CHEMICALS (4.0%)
Airgas -- 14,450 14,450 -- 698,947 698,947
Celanese Series A -- 38,250(d) 38,250 -- 956,250 956,250
Eastman Chemical 653,585 -- 653,585 34,992,941 -- 34,992,941
Lubrizol 423,768 -- 423,768 30,282,461 -- 30,282,461
PPG Inds 450,938(d) 24,850(d) 475,788 26,249,101 1,446,518 27,695,619
--------------------------------------------------------
Total 91,524,503 3,101,715 94,626,218
--------------------------------------------------------
COMMERCIAL BANKS (1.3%)
Bank of Hawaii -- 107,700(d) 107,700 -- 4,473,858 4,473,858
Cullen/Frost
Bankers 203,028(d) -- 203,028 10,484,366 -- 10,484,366
MB Financial -- 71,250 71,250 -- 1,494,113 1,494,113
M&T Bank 188,779(d) -- 188,779 11,764,707 -- 11,764,707
Prosperity
Bancshares -- 62,500(d) 62,500 -- 2,174,375 2,174,375
--------------------------------------------------------
Total 22,249,073 8,142,346 30,391,419
--------------------------------------------------------
</Table>
24
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE VALUE FUND RIVERSOURCE VALUE FUND
RIVERSOURCE PARTNERS SELECT PRO FORMA RIVERSOURCE PARTNERS SELECT PRO FORMA
MID CAP VALUE FUND COMBINED MID CAP VALUE FUND COMBINED
VALUE FUND (UNAUDITED) (UNAUDITED) VALUE FUND (UNAUDITED) (UNAUDITED)
COMMERCIAL SERVICES & SUPPLIES (1.3%)
RR Donnelley & Sons -- 315,190 315,190 $ -- $ 6,700,939 $ 6,700,939
Ritchie Bros
Auctioneers 818,508(d) -- 818,508(c) 20,086,186 -- 20,086,186
Steelcase Cl A -- 489,389(d) 489,389 -- 3,039,106 3,039,106
--------------------------------------------------------
Total 20,086,186 9,740,045 29,826,231
--------------------------------------------------------
COMMUNICATIONS EQUIPMENT (0.4%)
Brocade
Communications
Systems 537,417 -- 537,417(b) 4,224,098 -- 4,224,098
Comtech
Telecommunications -- 88,500(d) 88,500(b) -- 2,939,970 2,939,970
Tellabs -- 192,300 192,300(b) -- 1,330,716 1,330,716
--------------------------------------------------------
Total 4,224,098 4,270,686 8,494,784
--------------------------------------------------------
COMPUTERS & PERIPHERALS (0.2%)
Teradata -- 60,400 60,400(b) -- 1,662,208 1,662,208
Western Digital -- 52,500 52,500(b) -- 1,917,825 1,917,825
--------------------------------------------------------
Total -- 3,580,033 3,580,033
--------------------------------------------------------
CONSTRUCTION & ENGINEERING (2.1%)
Chicago Bridge &
Iron 552,591(d) -- 552,591(c) 10,322,399 -- 10,322,399
Fluor 188,750(d) 36,700 225,450 9,597,938 1,866,195 11,464,133
Foster Wheeler 300,034 -- 300,034(b) 9,574,085 -- 9,574,085
Insituform
Technologies Cl A 124,970 -- 124,970(b) 2,391,926 -- 2,391,926
Jacobs Engineering
Group 202,769 -- 202,769(b) 9,317,236 -- 9,317,236
KBR 307,274(d) -- 307,274 7,156,411 -- 7,156,411
--------------------------------------------------------
Total 48,359,995 1,866,195 50,226,190
--------------------------------------------------------
CONSTRUCTION MATERIALS (0.7%)
CEMEX ADR 1,366,644(d) -- 1,366,644(b,c) 17,657,040 -- 17,657,040
--------------------------------------------------------
CONSUMER FINANCE (0.2%)
Discover Financial
Services -- 179,350 179,350 -- 2,910,851 2,910,851
SLM 290,109(d) -- 290,109(b) 2,529,750 -- 2,529,750
--------------------------------------------------------
Total 2,529,750 2,910,851 5,440,601
--------------------------------------------------------
CONTAINERS & PACKAGING (0.5%)
AptarGroup -- 78,917(d) 78,917 -- 2,948,339 2,948,339
Crown Holdings -- 46,000(d) 46,000(b) -- 1,251,200 1,251,200
Sonoco Products -- 224,600 224,600 -- 6,185,484 6,185,484
Temple-Inland -- 145,700(d) 145,700 -- 2,392,394 2,392,394
--------------------------------------------------------
Total -- 12,777,417 12,777,417
--------------------------------------------------------
DISTRIBUTORS (0.4%)
Genuine Parts 250,748 -- 250,748 9,543,469 -- 9,543,469
--------------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.3%)
PICO Holdings 207,165 -- 207,165(b) 6,908,953 -- 6,908,953
--------------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (2.5%)
CenturyTel 767,422 -- 767,422 25,785,378 -- 25,785,378
Qwest
Communications Intl 5,117,402(d) 288,700(d) 5,406,102 19,497,302 1,099,947 20,597,249
Windstream 1,378,635 -- 1,378,635 13,965,573 -- 13,965,573
--------------------------------------------------------
Total 59,248,253 1,099,947 60,348,200
--------------------------------------------------------
ELECTRIC UTILITIES (2.5%)
Allegheny Energy 766,281 -- 766,281 20,321,772 -- 20,321,772
American Electric
Power -- 46,400 46,400 -- 1,437,936 1,437,936
Northeast Utilities -- 91,700 91,700 -- 2,176,958 2,176,958
NV Energy -- 142,000 142,000 -- 1,645,780 1,645,780
Pepco Holdings 1,399,116 -- 1,399,116 20,818,846 -- 20,818,846
Pinnacle West
Capital 234,077 128,600 362,677 7,682,407 4,220,652 11,903,059
--------------------------------------------------------
Total 48,823,025 9,481,326 58,304,351
--------------------------------------------------------
</Table>
25
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE VALUE FUND RIVERSOURCE VALUE FUND
RIVERSOURCE PARTNERS SELECT PRO FORMA RIVERSOURCE PARTNERS SELECT PRO FORMA
MID CAP VALUE FUND COMBINED MID CAP VALUE FUND COMBINED
VALUE FUND (UNAUDITED) (UNAUDITED) VALUE FUND (UNAUDITED) (UNAUDITED)
ELECTRICAL EQUIPMENT (3.1%)
AO Smith 351,905(d) -- 351,905 $ 13,407,581 $ -- $ 13,407,581
Cooper Inds Cl A 1,137,055 62,300 1,199,355 42,719,156 2,340,611 45,059,767
General Cable -- 44,650 44,650(b) -- 1,748,048 1,748,048
Rockwell Automation 289,503(d) -- 289,503 12,332,828 -- 12,332,828
--------------------------------------------------------
Total 68,459,565 4,088,659 72,548,224
--------------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (2.0%)
Agilent
Technologies 706,026(d) -- 706,026(b) 19,648,704 -- 19,648,704
Celestica 2,518,761 -- 2,518,761(b,c) 23,877,854 -- 23,877,854
Tyco Electronics -- 126,100 126,100(c) -- 2,809,508 2,809,508
--------------------------------------------------------
Total 43,526,558 2,809,508 46,336,066
--------------------------------------------------------
ENERGY EQUIPMENT & SERVICES (2.6%)
BJ Services 194,743 -- 194,743 3,783,856 -- 3,783,856
Cameron Intl 555,132(d) -- 555,132(b) 20,995,093 -- 20,995,093
Noble -- 224,350 224,350 -- 8,516,326 8,516,326
Transocean 156,282 -- 156,282(b,c) 13,366,799 -- 13,366,799
Weatherford Intl 731,313 -- 731,313(b,c) 15,160,119 -- 15,160,119
--------------------------------------------------------
Total 53,305,867 8,516,326 61,822,193
--------------------------------------------------------
FOOD & STAPLES RETAILING (0.1%)
Ruddick -- 116,600(d) 116,600 -- 3,103,892 3,103,892
--------------------------------------------------------
FOOD PRODUCTS (0.3%)
Dean Foods -- 54,700 54,700(b) -- 973,113 973,113
JM Smucker -- 26,700 26,700 -- 1,415,367 1,415,367
Sara Lee -- 465,086 465,086 -- 5,181,058 5,181,058
--------------------------------------------------------
Total -- 7,569,538 7,569,538
--------------------------------------------------------
GAS UTILITIES (1.4%)
Energen -- 71,000(d) 71,000 -- 3,060,100 3,060,100
EQT 275,347 -- 275,347 11,729,782 -- 11,729,782
Questar 440,839(d) 69,500 510,339 16,557,913 2,610,420 19,168,333
--------------------------------------------------------
Total 28,287,695 5,670,520 33,958,215
--------------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (0.9%)
Beckman Coulter -- 47,972 47,972 -- 3,307,190 3,307,190
Hospira 417,229 -- 417,229(b) 18,608,413 -- 18,608,413
--------------------------------------------------------
Total 18,608,413 3,307,190 21,915,603
--------------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (1.4%)
CIGNA -- 208,031(d) 208,031 -- 5,843,591 5,843,591
Health Management
Associates Cl A -- 438,200(d) 438,200(b) -- 3,282,118 3,282,118
HealthSouth -- 20,500 20,500(b) -- 320,620 320,620
McKesson 250,421 -- 250,421 14,912,571 -- 14,912,571
Universal Health
Services Cl B 144,608 -- 144,608 8,955,573 -- 8,955,573
--------------------------------------------------------
Total 23,868,144 9,446,329 33,314,473
--------------------------------------------------------
HEALTH CARE TECHNOLOGY (0.1%)
IMS Health -- 197,900 197,900 -- 3,037,765 3,037,765
--------------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (1.3%)
Darden Restaurants -- 84,000 84,000 -- 2,866,920 2,866,920
Royal Caribbean
Cruises 480,996(d) -- 480,996(b) 11,582,384 -- 11,582,384
Starwood Hotels &
Resorts Worldwide 416,426(d) -- 416,426 13,754,550 -- 13,754,550
Wyndham Worldwide -- 160,850 160,850 -- 2,625,072 2,625,072
--------------------------------------------------------
Total 25,336,934 5,491,992 30,828,926
--------------------------------------------------------
</Table>
26
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE VALUE FUND RIVERSOURCE VALUE FUND
RIVERSOURCE PARTNERS SELECT PRO FORMA RIVERSOURCE PARTNERS SELECT PRO FORMA
MID CAP VALUE FUND COMBINED MID CAP VALUE FUND COMBINED
VALUE FUND (UNAUDITED) (UNAUDITED) VALUE FUND (UNAUDITED) (UNAUDITED)
HOUSEHOLD DURABLES (2.3%)
DR Horton 673,802(d) -- 673,802 $ 7,688,081 $ -- $ 7,688,081
Fortune Brands -- 22,500 22,500 -- 967,050 967,050
KB Home 260,716(d) -- 260,716 4,330,493 -- 4,330,493
Jarden -- 20,800 20,800 -- 583,856 583,856
Mohawk Inds 277,300(d) -- 277,300(b) 13,224,437 -- 13,224,437
Newell Rubbermaid -- 150,100(d) 150,100 -- 2,355,069 2,355,069
Pulte Homes 825,776(d) -- 825,776 9,075,278 -- 9,075,278
Snap-On -- 29,400(d) 29,400 -- 1,021,944 1,021,944
Stanley Works 365,371 -- 365,371 15,597,688 -- 15,597,688
--------------------------------------------------------
Total 49,915,977 4,927,919 54,843,896
--------------------------------------------------------
INDEPENDENT POWER PRODUCERS & ENERGY TRADERS (0.2%)
AES -- 211,900 211,900(b) -- 3,140,358 3,140,358
NRG Energy -- 45,200 45,200(b) -- 1,274,188 1,274,188
--------------------------------------------------------
Total -- 4,414,546 4,414,546
--------------------------------------------------------
INDUSTRIAL CONGLOMERATES (0.4%)
McDermott Intl 353,465 -- 353,465(b) 8,932,061 -- 8,932,061
--------------------------------------------------------
INSURANCE (12.5%)
Allstate -- 208,100(d) 208,100 -- 6,372,022 6,372,022
Aon 383,889 -- 383,889 15,620,443 -- 15,620,443
Arch Capital Group 103,693 31,700 135,393(b,c) 7,003,425 2,141,018 9,144,443
Assurant 592,709 -- 592,709 19,002,251 -- 19,002,251
Axis Capital
Holdings 725,981 -- 725,981(c) 21,910,107 -- 21,910,107
Endurance Specialty
Holdings -- 93,600 93,600(c) -- 3,413,592 3,413,592
Everest Re Group 482,530 -- 482,530(c) 42,317,880 -- 42,317,880
HCC Insurance
Holdings -- 168,400(d) 168,400 -- 4,605,740 4,605,740
Lincoln Natl 759,549 251,020 1,010,569 19,679,915 6,503,927 26,183,842
Marsh & McLennan
Companies 275,281 -- 275,281 6,807,699 -- 6,807,699
PartnerRe 533,030(d) -- 533,030(c) 41,011,328 -- 41,011,328
Protective Life -- 108,100(d) 108,100 -- 2,315,502 2,315,502
Prudential
Financial -- 74,900 74,900 -- 3,738,259 3,738,259
Transatlantic
Holdings 227,033 -- 227,033 11,390,246 -- 11,390,246
Unum Group -- 134,800(d) 134,800 -- 2,890,112 2,890,112
Willis Group
Holdings 537,825 -- 537,825(c) 15,177,422 -- 15,177,422
XL Capital Cl A 3,591,127(d) -- 3,591,127(c) 62,701,076 -- 62,701,076
--------------------------------------------------------
Total 262,621,792 31,980,172 294,601,964
--------------------------------------------------------
IT SERVICES (0.3%)
Computer Sciences -- 116,900 116,900(b) -- 6,161,799 6,161,799
--------------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.4%)
Hasbro 340,696 -- 340,696 9,454,314 -- 9,454,314
--------------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (1.3%)
Covance 265,439(d) -- 265,439(b) 14,373,521 -- 14,373,521
Life Technologies 308,752 29,100 337,852(b) 14,372,406 1,354,605 15,727,011
--------------------------------------------------------
Total 28,745,927 1,354,605 30,100,532
--------------------------------------------------------
MACHINERY (5.4%)
AGCO 307,590(d) -- 307,590(b) 8,498,712 -- 8,498,712
Cummins 273,851(d) -- 273,851 12,271,263 -- 12,271,263
Dover -- 129,200 129,200 -- 5,007,792 5,007,792
Eaton 618,689 -- 618,689 35,011,612 -- 35,011,612
Harsco -- 31,650 31,650 -- 1,120,727 1,120,727
Ingersoll-Rand 975,284 33,800 1,009,084(c) 29,911,960 1,036,646 30,948,606
Manitowoc 1,052,966(d) -- 1,052,966 9,971,588 -- 9,971,588
Parker Hannifin 302,235(d) -- 302,235 15,667,862 -- 15,667,862
</Table>
27
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE VALUE FUND RIVERSOURCE VALUE FUND
RIVERSOURCE PARTNERS SELECT PRO FORMA RIVERSOURCE PARTNERS SELECT PRO FORMA
MID CAP VALUE FUND COMBINED MID CAP VALUE FUND COMBINED
VALUE FUND (UNAUDITED) (UNAUDITED) VALUE FUND (UNAUDITED) (UNAUDITED)
MACHINERY (CONT.)
SPX -- 24,500 24,500 $ -- $ 1,501,115 $ 1,501,115
Terex 397,121(d) -- 397,121(b) 8,232,318 -- 8,232,318
--------------------------------------------------------
Total 119,565,315 8,666,280 128,231,595
--------------------------------------------------------
MARINE (0.1%)
Kirby -- 45,100(d) 45,100(b) -- 1,660,582 1,660,582
--------------------------------------------------------
MEDIA (1.7%)
Gannett -- 157,500(d) 157,500 -- 1,970,325 1,970,325
McGraw-Hill
Companies -- 56,200 56,200 -- 1,412,868 1,412,868
Natl CineMedia 1,065,396 -- 1,065,396 18,079,770 -- 18,079,770
Regal Entertainment
Group Cl A 1,349,318 -- 1,349,318 16,623,598 -- 16,623,598
Shaw Communications
Cl B -- 119,400 119,400(c) -- 2,150,394 2,150,394
--------------------------------------------------------
Total 34,703,368 5,533,587 40,236,955
--------------------------------------------------------
METALS & MINING (3.1%)
Cliff Natural
Resources -- 43,400 43,400 -- 1,404,424 1,404,424
Freeport-McMoRan
Copper & Gold 401,549(d) -- 401,549 27,550,277 -- 27,550,277
Nucor 376,540(d) -- 376,540 17,701,145 -- 17,701,145
Steel Dynamics 494,356 -- 494,356 7,583,421 -- 7,583,421
Thompson Creek
Metals -- 204,700 204,700(b,c) -- 2,470,729 2,470,729
United States Steel 338,950(d) -- 338,950 15,039,212 -- 15,039,212
Walter Energy -- 22,300(d) 22,300 -- 1,339,338 1,339,338
--------------------------------------------------------
Total 67,874,055 5,214,491 73,088,546
--------------------------------------------------------
MULTILINE RETAIL (1.5%)
Family Dollar
Stores 359,208(d) 57,800(d) 417,008 9,483,091 1,525,920 11,009,011
Kohl's -- 40,050 40,050(b) -- 2,284,853 2,284,853
Macy's 1,232,160(d) -- 1,232,160 22,536,207 -- 22,536,207
--------------------------------------------------------
Total 32,019,298 3,810,773 35,830,071
--------------------------------------------------------
MULTI-UTILITIES (3.2%)
CMS Energy -- 223,200(d) 223,200 -- 2,990,880 2,990,880
DTE Energy 412,030 -- 412,030 14,478,734 -- 14,478,734
PG&E -- 110,200 110,200 -- 4,461,998 4,461,998
SCANA -- 129,467(d) 129,467 -- 4,518,398 4,518,398
Sempra Energy 507,688(d) -- 507,688 25,287,939 -- 25,287,939
Wisconsin Energy 506,974 -- 506,974 22,900,016 -- 22,900,016
Xcel Energy -- 47,300 47,300 -- 910,052 910,052
--------------------------------------------------------
Total 62,666,689 12,881,328 75,548,017
--------------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (5.9%)
Alpha Natural
Resources 172,788 -- 172,788(b) 6,064,859 -- 6,064,859
El Paso 1,311,646(d) 206,000 1,517,646 13,536,187 2,125,920 15,662,107
Enbridge 783,297 -- 783,297(c) 30,391,923 -- 30,391,923
Newfield
Exploration 513,925 45,650 559,575(b) 21,872,647 1,942,864 23,815,511
Pioneer Natural
Resources 456,217 -- 456,217 16,556,115 -- 16,556,115
Southwestern Energy 466,523(d) -- 466,523(b) 19,911,202 -- 19,911,202
Spectra Energy -- 105,000 105,000 -- 1,988,700 1,988,700
Sunoco 194,210(d) -- 194,210 5,525,275 -- 5,525,275
Ultra Petroleum 353,025 -- 353,025(b) 17,284,104 -- 17,284,104
Whiting Petroleum -- 49,100(d) 49,100(b) -- 2,827,178 2,827,178
--------------------------------------------------------
Total 131,142,312 8,884,662 140,026,974
--------------------------------------------------------
PHARMACEUTICALS (2.8%)
Forest Laboratories 350,923 -- 350,923(b) 10,331,173 -- 10,331,173
King
Pharmaceuticals 1,191,464(d) -- 1,191,464(b) 12,832,067 -- 12,832,067
Mylan 2,721,976(d) -- 2,721,976(b) 43,578,836 -- 43,578,836
--------------------------------------------------------
Total 66,742,076 -- 66,742,076
--------------------------------------------------------
</Table>
28
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE VALUE FUND RIVERSOURCE VALUE FUND
RIVERSOURCE PARTNERS SELECT PRO FORMA RIVERSOURCE PARTNERS SELECT PRO FORMA
MID CAP VALUE FUND COMBINED MID CAP VALUE FUND COMBINED
VALUE FUND (UNAUDITED) (UNAUDITED) VALUE FUND (UNAUDITED) (UNAUDITED)
REAL ESTATE INVESTMENT TRUSTS (REITS) (4.0%)
AvalonBay
Communities 188,141(d) -- 188,141 $ 13,683,495 $ -- $ 13,683,495
Boston Properties 113,196(d) 12,750(d) 125,946 7,419,998 835,763 8,255,761
Digital Realty
Trust -- 37,600(d) 37,600 -- 1,718,696 1,718,696
Duke Realty -- 631,372(d) 631,372 -- 7,582,777 7,582,777
Equity Residential 517,122(d) -- 517,122 15,875,645 -- 15,875,645
Health Care REIT -- 64,800(d) 64,800 -- 2,696,976 2,696,976
ProLogis 560,293(d) -- 560,293 6,678,693 -- 6,678,693
Rayonier 448,200(d) -- 448,200 18,335,862 -- 18,335,862
Simon Property
Group -- 130,202(d) 130,202 -- 9,039,924 9,039,924
Ventas 285,682(d) -- 285,682 10,998,757 -- 10,998,757
--------------------------------------------------------
Total 72,992,450 21,874,136 94,866,586
--------------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (0.5%)
St. Joe 375,433(d) -- 375,433(b) 10,932,609 -- 10,932,609
--------------------------------------------------------
ROAD & RAIL (2.0%)
CSX 546,471(d) -- 546,471 22,875,276 -- 22,875,276
Kansas City
Southern 753,375(d) -- 753,375(b) 19,956,904 -- 19,956,904
Werner Enterprises -- 247,900 247,900 -- 4,618,377 4,618,377
--------------------------------------------------------
Total 42,832,180 4,618,377 47,450,557
--------------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (4.5%)
Analog Devices -- 61,000(d) 61,000 -- 1,682,380 1,682,380
ASML Holding 460,191(d) -- 460,191(c) 13,607,848 -- 13,607,848
Lam Research 467,209(d) -- 467,209(b) 15,959,859 -- 15,959,859
LSI 3,394,127(d) -- 3,394,127(b) 18,633,757 -- 18,633,757
Marvell Technology
Group -- 134,000 134,000(b,c) -- 2,169,460 2,169,460
Maxim Integrated
Products 1,103,946 -- 1,103,946 20,025,580 -- 20,025,580
Microchip
Technology 864,102(d) 161,400(d) 1,025,502 22,898,704 4,277,100 27,175,804
Micron Technology 705,301(d) -- 705,301(b) 5,783,468 -- 5,783,468
Semtech -- 36,700(d) 36,700(b) -- 624,267 624,267
Skyworks Solutions -- 45,900(d) 45,900(b) -- 607,716 607,716
--------------------------------------------------------
Total 96,909,216 9,360,923 106,270,139
--------------------------------------------------------
SOFTWARE (3.4%)
Adobe Systems 475,050(d) -- 475,050(b) 15,695,652 -- 15,695,652
Autodesk 591,078 -- 591,078(b) 14,067,656 -- 14,067,656
BMC Software 535,513 -- 535,513(b) 20,097,803 -- 20,097,803
Informatica -- 79,700(d) 79,700(b) -- 1,799,626 1,799,626
McAfee 629,556(d) -- 629,556(b) 27,568,258 -- 27,568,258
Sybase -- 49,200(d) 49,200(b) -- 1,913,880 1,913,880
--------------------------------------------------------
Total 77,429,369 3,713,506 81,142,875
--------------------------------------------------------
SPECIALTY RETAIL (0.6%)
Abercrombie & Fitch
Cl A 211,975(d) -- 211,975 6,969,738 -- 6,969,738
Bed Bath & Beyond 216,913(d) -- 216,913(b) 8,142,914 -- 8,142,914
--------------------------------------------------------
Total 15,112,652 -- 15,112,652
--------------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (1.3%)
Phillips-Van Heusen -- 66,925 66,925 -- 2,863,721 2,863,721
VF 287,257(d) 64,300 351,557 20,806,025 4,657,249 25,463,274
Warnaco Group -- 32,300(d) 32,300(b) -- 1,416,678 1,416,678
--------------------------------------------------------
Total 20,806,025 8,937,648 29,743,673
--------------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.2%)
First Niagara
Financial Group -- 222,400 222,400 -- 2,742,192 2,742,192
Hudson City Bancorp -- 224,200(d) 224,200 -- 2,948,230 2,948,230
--------------------------------------------------------
Total -- 5,690,422 5,690,422
--------------------------------------------------------
</Table>
29
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE VALUE FUND RIVERSOURCE VALUE FUND
RIVERSOURCE PARTNERS SELECT PRO FORMA RIVERSOURCE PARTNERS SELECT PRO FORMA
MID CAP VALUE FUND COMBINED MID CAP VALUE FUND COMBINED
VALUE FUND (UNAUDITED) (UNAUDITED) VALUE FUND (UNAUDITED) (UNAUDITED)
TOBACCO (2.8%)
Lorillard 860,650 16,500 877,150 $ 63,946,295 $ 1,225,950 $ 65,172,245
--------------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.6%)
United Rentals -- 307,558(d) 307,558(b) -- 3,167,847 3,167,847
WW Grainger 115,537(d) -- 115,537 10,324,386 -- 10,324,386
--------------------------------------------------------
Total 10,324,386 3,167,847 13,492,233
--------------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.1%)
NTELOS Holdings -- 177,900 177,900 -- 3,141,714 3,141,714
--------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost:
$2,308,949,507) $1,986,699,730 $288,931,801 $2,275,631,531
--------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
EQUITY-LINKED NOTES (2.0%)(F)
PRINCIPAL PRINCIPAL PRINCIPAL
ISSUER COUPON RATE AMOUNT AMOUNT AMOUNT VALUE(a) VALUE(a) VALUE(a)
Goldman Sachs Group
Absolute Trigger
Mandatory
Exchangeable Notes
12-28-09 --% $42,250,000(e) $-- $42,250,000 $ 47,226,353 $-- $ 47,226,353
---------------------------------------------------------------------------------------------------------------------------
TOTAL EQUITY-LINKED
NOTES
(Cost: $42,250,000) $47,226,353 $-- $47,226,353
---------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
BONDS (0.2%)
PRINCIPAL PRINCIPAL PRINCIPAL
ISSUER COUPON RATE AMOUNT AMOUNT AMOUNT VALUE(a) VALUE(a) VALUE(a)
WIRELINES
Qwest
Communications Intl
Cv Sr Unsecured 11-
15-25 3.50% $5,518,000 $-- $5,518,000 $5,556,460 $-- $5,556,460
-----------------------------------------------------------------------------------------------------------------------
TOTAL BONDS
(Cost: $5,518,000) $5,556,460 $-- $5,556,460
-----------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (0.7%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RiverSource Short-
Term Cash Fund,
0.28% 11,050,066 4,722,167 15,772,233(g) $ 11,050,066 $ 4,722,167 $15,772,233
--------------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET
FUND
(Cost: $15,772,233) $11,050,066 $4,722,167 $15,772,233
--------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (25.6%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE RIVERSOURCE VALUE FUND RIVERSOURCE RIVERSOURCE VALUE FUND
MID CAP PARTNERS SELECT PRO FORMA MID CAP PARTNERS SELECT PRO FORMA
VALUE FUND VALUE FUND COMBINED VALUE FUND VALUE FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
CASH COLLATERAL
REINVESTMENT FUND
(7.0%)
JPMorgan Prime
Money Market Fund 94,089,054 71,421,753 165,510,807 $94,089,054 $71,421,753 $165,510,807
-------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
PRINCIPAL PRINCIPAL PRINCIPAL
ISSUER COUPON RATE AMOUNT AMOUNT AMOUNT VALUE(a) VALUE(a) VALUE(a)
ASSET-BACKED COMMERCIAL PAPER (3.9%)
Arabella Finance
LLC
10/08/09 0.63% $ 4,998,785 $-- $ 4,998,785 $ 4,998,785 $ -- 4,998,785
</Table>
30
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (CONTINUED)
PRINCIPAL PRINCIPAL PRINCIPAL
ISSUER COUPON RATE AMOUNT AMOUNT AMOUNT VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE RIVERSOURCE VALUE FUND RIVERSOURCE RIVERSOURCE VALUE FUND
MID CAP PARTNERS SELECT PRO FORMA MID CAP PARTNERS SELECT PRO FORMA
VALUE FUND VALUE FUND COMBINED VALUE FUND VALUE FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
ASSET-BACKED COMMERCIAL PAPER (CONT.)
Belmont Funding LLC
10/07/09 0.52% $14,998,483 $-- $14,998,483 $ 14,998,483 $ -- $ 14,998,483
Cancara Asset
Securitisation LLC
11/16/09 0.30 19,989,499 -- 19,989,499 19,989,499 -- 19,989,499
Ebbets Funding LLC
10/06/09 0.47 14,998,629 -- 14,998,629 14,998,629 -- 14,998,629
Grampian Funding
LLC
10/07/09 0.37 5,998,150 -- 5,998,150 5,998,150 -- 5,998,150
Rhein-Main
Securitisation
10/20/09 0.32 5,998,667 -- 5,998,667 5,998,667 -- 5,998,667
Rheingold
Securitization
12/16/09 0.38 6,994,311 -- 6,994,311 6,994,311 -- 6,994,311
Tasman Funding
10/23/09 0.30 2,999,250 -- 2,999,250 2,999,250 -- 2,999,250
Versailles
Commercial Paper
LLC
10/13/09 0.55 14,992,438 -- 14,992,438 14,992,438 -- 14,992,438
---------------------------------------------------
Total 91,968,212 -- 91,968,212
---------------------------------------------------
CERTIFICATES OF DEPOSIT (12.6%)
Banco Espirito
Santo e Comm London
10/06/09 0.30 20,000,000 -- 20,000,000 20,000,000 -- 20,000,000
Banco Popular
Espanol
10/02/09 0.30 4,998,542 -- 4,998,542 4,998,542 -- 4,998,542
Banco Santander
Madrid
10/13/09 0.45 10,000,000 -- 10,000,000 10,000,000 -- 10,000,000
Banco Santander NY
10/09/09 0.41 13,000,000 -- 13,000,000 13,000,000 -- 13,000,000
Bank of Austria
10/14/09 0.34 9,997,167 -- 9,997,167 9,997,167 -- 9,997,167
Bank of Nova Scotia
Singapore
10/30/09 0.40 20,000,000 -- 20,000,000 20,000,000 -- 20,000,000
Bank of Tokyo UFJ
London
12/21/09 0.37 10,000,132 -- 10,000,132 10,000,132 -- 10,000,132
Bayrische Hypo-Und
Vereinsbank
12/29/09 0.39 10,000,000 -- 10,000,000 10,000,000 -- 10,000,000
Caisse de Depots et
Consigment Paris
10/19/09 0.43 9,988,785 -- 9,988,785 9,988,785 -- 9,988,785
Caixa Geral Dep
London
10/26/09 0.57 5,000,000 -- 5,000,000 5,000,000 -- 5,000,000
Calyon London
11/19/09 0.35 9,991,064 -- 9,991,064 9,991,064 -- 9,991,064
Credit Indusrial et
Comm London
10/07/09 0.37 5,000,000 -- 5,000,000 5,000,000 -- 5,000,000
10/13/09 0.52 10,985,402 -- 10,985,402 10,985,402 -- 10,985,402
11/27/09 0.39 3,000,038 -- 3,000,038 3,000,038 -- 3,000,038
12/10/09 0.39 4,000,050 -- 4,000,050 4,000,050 -- 4,000,050
Danske Bank
Coppenhagen
11/24/09 0.32 10,000,000 -- 10,000,000 10,000,000 -- 10,000,000
ING Bank Lond
10/13/09 0.50 12,000,000 -- 12,000,000 12,000,000 -- 12,000,000
Jyske
12/10/09 0.44 9,988,890 -- 9,988,890 9,988,890 -- 9,988,890
KBC Brussels
10/22/09 0.40 15,000,000 -- 15,000,000 15,000,000 -- 15,000,000
</Table>
31
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (CONTINUED)
PRINCIPAL PRINCIPAL PRINCIPAL
ISSUER COUPON RATE AMOUNT AMOUNT AMOUNT VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
MID CAP MID CAP
RIVERSOURCE RIVERSOURCE VALUE FUND RIVERSOURCE RIVERSOURCE VALUE FUND
MID CAP PARTNERS SELECT PRO FORMA MID CAP PARTNERS SELECT PRO FORMA
VALUE FUND VALUE FUND COMBINED VALUE FUND VALUE FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
CERTIFICATES OF DEPOSIT (CONT.)
Mizuho London
10/29/09 0.49% $ 4,500,000 $-- $ 4,500,000 $ 4,500,000 $ -- $ 4,500,000
Monte de Paschi
10/14/09 0.40 10,000,166 -- 10,000,166 10,000,166 -- 10,000,166
Nederlandse
Waterschapsbank
10/20/09 0.40 5,993,873 -- 5,993,873 5,993,873 -- 5,993,873
Norinchukin Bank NY
11/20/09 0.41 15,000,000 -- 15,000,000 15,000,000 -- 15,000,000
NyKredit
12/18/09 0.53 10,000,000 -- 10,000,000 10,000,000 -- 10,000,000
Raiffeisen
Zentralbank Oest
Vienna
10/05/09 0.29 20,000,000 -- 20,000,000 20,000,000 -- 20,000,000
San Paolo Imi
Ireland
10/07/09 0.40 7,992,008 -- 7,992,008 7,992,008 -- 7,992,008
Sumitomo Mitsui
Banking Corp
Brussels
11/19/09 0.44 20,000,000 -- 20,000,000 20,000,000 -- 20,000,000
Ulster Bank Ireland
10/15/09 0.47 13,000,000 -- 13,000,000 13,000,000 -- 13,000,000
---------------------------------------------------
Total 299,436,117 -- 299,436,117
---------------------------------------------------
COMMERCIAL PAPER (1.1%)
Citigroup Funding
10/05/09 0.40 14,997,167 -- 14,997,167 14,997,167 -- 14,997,167
Natixis Commercial
Paper
10/08/09 0.29 9,997,583 -- 9,997,583 9,997,583 -- 9,997,583
---------------------------------------------------
Total 24,994,750 -- 24,994,750
---------------------------------------------------
REPURCHASE
AGREEMENTS (1.0%)
Morgan Stanley
10/01/09 0.23 12,000,000 -- 12,000,000 12,000,000 -- 12,000,000
RBS Securities
10/01/09 0.50 12,000,000 -- 12,000,000 12,000,000 -- 12,000,000
---------------------------------------------------
Total 24,000,000 -- 24,000,000
----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost:
$605,909,886) $ 534,488,133 $ 71,421,753 $ 605,909,886
----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
IN SECURITIES
(Cost:
$2,978,399,626)(h) $2,585,020,742 $365,075,721 $2,950,096,463
----------------------------------------------------------------------------------------------------------------------------------
</Table>
32
NOTES TO COMBINED PORTFOLIO OF INVESTMENTS
(a) Securities are valued by policies described in Note 1 to the financial
statements in the annual report.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At Sept. 30, 2009, the
value of foreign securities represented 16.2% of net assets.
(d) At Sept. 30, 2009, security was partially or fully on loan. See Note 6 to
the financial statements.
(e) Identifies issues considered to be illiquid as to their marketability (see
Note 2 to the financial statements). The aggregate value of such securities
at Sept. 30, 2009 was $47,226,353, representing 2.0% of net assets.
Information concerning such security holdings at Sept. 30, 2009, is as
follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
Goldman Sachs Group
--% Absolute Trigger Mandatory Exchangeable Nts 2009 05/18/09 $42,250,000
------------------------------------------------------------------------------------------------
</Table>
(f) Equity-Linked Notes (ELNs) are notes created by a counterparty, typically an
investment bank that may bear interest at a fixed or floating rate. At
maturity, the notes must be exchanged for an amount based on the value of
one or more equity securities of third party issuers or the value of an
index. The exchanged value may be limited to an amount less than the actual
value of the underlying stocks or value of an index at the maturity date.
Any difference between the exchange amount and the original cost of the
notes will be a gain or loss.
(g) Affiliated Money Market Fund -- See Note 6 and/or 7 to the financial
statements in the annual report. The rate shown is the seven-day current
annualized yield at Sept. 30, 2009.
(h) At Sept. 30, 2009, the approximate cost of securities for federal income tax
purposes and the approximate aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
<Caption>
RIVERSOURCE
MID CAP
RIVERSOURCE RIVERSOURCE VALUE FUND
MID CAP PARTNERS SELECT PRO FORMA
VALUE FUND VALUE FUND COMBINED
Cost of securities for federal income tax purposes: $2,651,115,000 $327,285,000 $2,978,400,000
Unrealized appreciation $ 177,049,000 $ 47,550,000 $ 224,599,000
Unrealized depreciation (243,144,000) (9,758,000) (252,902,000)
-------------------------------------------------------------------------------------------------------------
Net unrealized appreciation/depreciation $ (66,095,000) $ 37,792,000 $ (28,303,000)
-------------------------------------------------------------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
33
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (SELLING FUND)
INTRODUCTION TO PROPOSED FUND REORGANIZATION
June 30, 2009
The accompanying unaudited pro forma combining statement of assets and
liabilities and the statement of operations reflect the accounts of the two
funds at, and for, the 12-month period ending June 30, 2009. These statements
have been derived from financial statements prepared for the Seligman Smaller-
Cap Value Fund and the RiverSource Partners Small Cap Equity Fund as of June 30,
2009. Seligman Smaller-Cap Value Fund invests primarily in the common stock of
"value" companies with smaller market capitalization ($3 billion or less) at the
time of purchase by the Fund. RiverSource Partners Small Cap Equity Fund invests
primarily in equity securities issued by small companies.
Under the proposed Agreement and Plan of Reorganization, share classes of
RiverSource Partners Small Cap Equity Fund would be exchanged for share classes
of Seligman Smaller-Cap Value Fund.
<Table>
<Caption>
SELLING FUND BUYING FUND
------------------------------------------------------------------------------------------------
RiverSource Partners Small Cap Equity Fund Class A Seligman Smaller-Cap Value Fund Class A
------------------------------------------------------------------------------------------------
RiverSource Partners Small Cap Equity Fund Class B Seligman Smaller-Cap Value Fund Class B
------------------------------------------------------------------------------------------------
RiverSource Partners Small Cap Equity Fund Class C Seligman Smaller-Cap Value Fund Class C
------------------------------------------------------------------------------------------------
RiverSource Partners Small Cap Equity Fund Class I Seligman Smaller-Cap Value Fund Class I*
------------------------------------------------------------------------------------------------
RiverSource Partners Small Cap Equity Fund Class R4 Seligman Smaller-Cap Value Fund Class R4*
------------------------------------------------------------------------------------------------
</Table>
* The inception date for the Seligman Smaller-Cap Value Fund Class I and
Class R4 shares was Aug. 3, 2009.
Note: Seligman Smaller-Cap Value Fund also offers Class R2, Class R3 and Class
R5 shares. The inception date for the Class R3 shares was Aug. 3, 2009.
The pro forma combining statements have been prepared to give effect to the
proposed transaction on the historical operations of the accounting survivor,
Seligman Smaller-Cap Value Fund, as if the transaction had occurred at the
beginning of the fiscal year ending June 30, 2009.
34
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF ASSETS AND LIABILITIES
<Table>
<Caption>
SELIGMAN SELIGMAN
SMALLER-CAP SMALLER-CAP
SELIGMAN RIVERSOURCE PARTNERS VALUE FUND VALUE FUND
SMALLER- SMALL CAP EQUITY PRO FORMA PRO FORMA
CAP VALUE FUND FUND ADJUSTMENTS COMBINED
JUNE 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
ASSETS
Investments in securities, at cost
Unaffiliated issuers $123,474,519 $133,644,318 $ -- $257,118,837
Affiliated money market fund $ -- $ 2,289,929 $ -- $ 2,289,929
Investments of cash collateral received for
securities on loan $ -- $ 27,827,706 $ -- $ 27,827,706
----------------------------------------------------------------
Investments in securities, at value
Unaffiliated issuers* $120,331,814 $118,857,142 $ -- $239,188,956
Affiliated money market fund $ -- $ 2,289,929 $ -- $ 2,289,929
Investments of cash collateral received for
securities on loan $ -- $ 27,827,706 $ -- $ 27,827,706
Capital shares receivable 329,811 33,654 -- 363,465
Dividends and accrued interest receivable 15,800 87,717 -- 103,517
Receivable for investment securities sold 739,823 698,517 -- 1,438,340
Other assets 23,704 -- -- 23,704
---------------------------------------------------------------------------------------------------------------------
Total assets 121,440,952 149,794,665 -- 271,235,617
---------------------------------------------------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash 568,472 4 -- 568,476
Capital shares payable 502,160 129,164 -- 631,324
Payable for investment securities purchased 230,866 211,875 -- 442,741
Payable upon return of securities loaned -- 27,827,706 -- 27,827,706
Accrued investment management services fees 3,089 3,243 -- 6,332
Accrued distribution fees 50,880 50,536 -- 101,416
Accrued transfer agency fees 144,143 1,262 -- 145,405
Accrued administrative services fees 264 267 -- 531
Accrued plan administration services fees 1,062 898 -- 1,960
Other accrued expenses 44,663 92,391 -- 137,054
---------------------------------------------------------------------------------------------------------------------
Total liabilities 1,545,599 28,317,346 -- 29,862,945
---------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $119,895,353 $121,477,319 $ -- $241,372,672
---------------------------------------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.001 par value for Seligman
Smaller-Cap Value Fund and $.01 par value for
RiverSource Partners Small Cap Equity Fund
(Note 3) $ 12,546 $ 352,923 $ (340,614) $ 24,855
Additional paid-in capital (Note 3) 141,997,351 205,083,148 340,614 347,421,113
Undistributed (excess of distributions over) net
investment income (1,226,254) 8,701 -- (1,217,553)
Accumulated net realized gain (loss) (17,745,585) (69,180,277) -- (86,925,862)
Unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in
foreign currencies (3,142,705) (14,787,176) -- (17,929,881)
---------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding capital stock $119,895,353 $121,477,319 $ -- $241,372,672
---------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding
shares: Class A $ 65,912,717 $106,385,159 $ -- $172,297,876
Class B $ 7,188,902 $ 11,616,275 $ -- $ 18,805,177
Class C $ 36,531,924 $ 1,296,809 $ -- $ 37,828,733
Class I $ -- $ 6,075 $ -- $ 6,075
Class R2 $ 8,649,950 $ -- $ -- $ 8,649,950
Class R4 $ -- $ 2,173,001 $ -- $ 2,173,001
Class R5 $ 1,611,860 $ -- $ -- $ 1,611,860
Shares outstanding
(Note 3): Class A shares 6,596,049 30,676,768 (20,027,603) 17,245,214
Class B shares 809,134 3,596,015 (2,287,876) 2,117,273
Class C shares 4,107,275 401,883 (256,010) 4,253,148
Class I shares -- 1,724 (1,149) 575
Class R2 shares 881,036 -- -- 881,036
Class R4 shares -- 615,888 (410,306) 205,582
Class R5 shares 152,484 -- -- 152,484
Net asset value per share of outstanding capital
stock: Class A $ 9.99 $ 3.47 $ -- $ 9.99
Class B $ 8.88 $ 3.23 $ -- $ 8.88
Class C $ 8.89 $ 3.23 $ -- $ 8.89
Class I $ -- $ 3.52 $ -- $ 10.57
Class R2 $ 9.82 $ -- $ -- $ 9.82
Class R4 $ -- $ 3.53 $ -- $ 10.57
Class R5 $ 10.57 $ -- $ -- $ 10.57
---------------------------------------------------------------------------------------------------------------------
* Including securities on loan, at value $ -- $ 26,985,433 $ -- $ 26,985,433
---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
35
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
<Table>
<Caption>
SELIGMAN SELIGMAN
SELIGMAN RIVERSOURCE SMALLER-CAP VALUE SMALLER-CAP VALUE
SMALLER-CAP VALUE PARTNERS SMALL CAP FUND PRO FORMA FUND PRO FORMA
FUND EQUITY FUND ADJUSTMENTS COMBINED
YEAR ENDED JUNE 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
INVESTMENT INCOME
Income:
Dividends $ 890,410 $ 1,722,979 -- $ 2,613,389
Interest 2,278 1,248 -- 3,526
Income distributions from affiliated
money market fund -- 114,357 -- 114,357
Fee income from securities lending -- net -- 113,652 -- 113,652
Less foreign taxes withheld -- (788) -- (788)
-------------------------------------------------------------------------------------------------------------------------
Total income 892,688 1,951,448 -- 2,844,136
-------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees (Note
2) 1,403,838 1,303,723 (62,466)(a) 2,645,095
Distribution fees
Class A 182,123 310,254 -- 492,377
Class B 99,053 142,426 -- 241,479
Class C 405,726 14,111 -- 419,837
Class R2 42,440 -- -- 42,440
Transfer agency fees (Note 2)
Class A 546,227 444,673 (208,677)(b) 782,223
Class B 72,826 54,295 (25,365)(b) 101,756
Class C 289,240 5,256 (114,056)(b) 180,440
Class R2 62,656 -- (58,323)(b) 4,333
Class R4 -- 1,110 -- 1,110
Class R5 15,726 -- (12,024)(b) 3,702
Administrative services fees (Note 2) 1,884 113,586 110,848(c) 226,318
Plan administration services fees (Note
2)
Class R2 1,062 -- 20,604(d) 21,666
Class R4 -- 5,552 -- 5,552
Compensation of board members 8,337 4,202 -- 12,539
Custodian fees 57,364 70,340 -- 127,704
Printing and postage 41,905 63,632 -- 105,537
Registration fees (Note 2) 106,446 43,092 (21,546)(e) 127,992
Professional fees (Note 2) 37,485 27,169 (25,325)(f) 39,329
Other 34,624 7,015 -- 41,639
-------------------------------------------------------------------------------------------------------------------------
Total expenses 3,408,962 2,610,436 (396,330) 5,623,068
Expenses waived/reimbursed by
RiverSource Investments, LLC (Note
2) -- (648,698) (707,829)(g) (1,356,527)
Earnings and bank fee credits on cash
balances (Note 2) -- (1,460) 1,460(h) --
-------------------------------------------------------------------------------------------------------------------------
Total net expenses 3,408,962 1,960,278 (1,102,699) 4,266,541
-------------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net (2,516,274) (8,830) 1,102,699 (1,422,405)
-------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on investments (22,082,439) (47,172,639) -- (69,255,078)
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities
in foreign currencies (27,462,640) (17,045,777) -- (44,508,417)
-------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments and
foreign currencies (49,545,079) (64,218,416) -- (113,763,495)
-------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $(52,061,353) $(64,227,246) $ 1,102,699 $(115,185,900)
-------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
36
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (SELLING FUND)
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited as to June 30, 2009)
1. BASIS OF COMBINATION
The unaudited pro forma combining statement of assets and liabilities and the
statement of operations reflect the accounts of the two funds at, and for, the
12-month period ending June 30, 2009. These statements have been derived from
financial statements prepared for the Seligman Smaller-Cap Value Fund and the
RiverSource Partners Small Cap Equity Fund as of June 30, 2009.
Each Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The primary investments
of each Fund are as follows:
Seligman Smaller-Cap Value Fund invests primarily in the common stock of "value"
companies with smaller market capitalization ($3 billion or less) at the time of
purchase by the Fund.
RiverSource Partners Small Cap Equity Fund invests primarily in equity
securities issued by small companies.
The pro forma statements give effect to the proposed transfer of the assets and
liabilities of RiverSource Partners Small Cap Equity Fund in exchange for Class
A, Class B, Class C, Class I and Class R4 shares of Seligman Smaller-Cap Value
Fund under U.S. generally accepted accounting principles. The pro forma
statements reflect estimates for the combined Seligman Smaller-Cap Value Fund
based on the increased asset level of the Reorganization and associated
economies of scale, adjusted to reflect current fees.
The pro forma combining statements should be read in conjunction with the
historical financial statements of the funds incorporated by reference in the
Statement of Additional Information.
The pro forma statement of operations give effect to the proposed transaction on
the historical operations of the accounting survivor, Seligman Smaller-Cap Value
Fund, as if the transaction had occurred at the beginning of the year presented.
2. PRO FORMA ADJUSTMENTS
(a) To reflect the change in investment management services fees due to the
Reorganization.
(b) To reflect the change in transfer agent fees due to the Reorganization
including adjusting for closed account fees for each RiverSource Partners
Small Cap Equity Fund shareholder account that will be closed on the system
as a result of the Reorganization.
(c) To reflect the change in administrative services fees due to the
Reorganization.
(d) To reflect the change in plan administration services fees due to the
Reorganization.
(e) To reflect the reduction in registration fees due to the Reorganization.
(f) To reflect the reduction in audit fees due to the Reorganization.
(g) To adjust the expense reimbursement to reflect the net reduction in fees
resulting from the Reorganization per the agreement (through Sept. 11, 2010)
by RiverSource Investments, LLC and its affiliates to waive certain fees and
absorb certain expenses of the combined fund.
(h) To reflect the elimination of the earnings and bank fee credits on cash
balances.
37
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional Class
A, Class B, Class C, Class I and Class R4 shares of Seligman Smaller-Cap Value
Fund at June 30, 2009, in connection with the Reorganization. The following
table reflects the number of Seligman Smaller-Cap Value Fund shares assumed to
be issued to the shareholders of the RiverSource Partners Small Cap Equity Fund.
<Table>
<Caption>
RIVERSOURCE PARTNERS SELIGMAN SMALLER-CAP
SMALL CAP EQUITY FUND VALUE FUND TOTAL PRO FORMA
SHARES ISSUED SHARES OUTSTANDING SHARES OUTSTANDING
---------------------------------------------------------------------------------------------------------------------
Class A 10,649,165 6,596,049 17,245,214
---------------------------------------------------------------------------------------------------------------------
Class B 1,308,139 809,134 2,117,273
---------------------------------------------------------------------------------------------------------------------
Class C 145,873 4,107,275 4,253,148
---------------------------------------------------------------------------------------------------------------------
Class I* 575 N/A 575
---------------------------------------------------------------------------------------------------------------------
Class R2 N/A 881,036 881,036
---------------------------------------------------------------------------------------------------------------------
Class R4* 205,582 N/A 205,582
---------------------------------------------------------------------------------------------------------------------
Class R5 N/A 152,484 152,484
---------------------------------------------------------------------------------------------------------------------
</Table>
* The inception date for the Seligman Smaller-Cap Value Fund Class I and
Class R4 shares was Aug. 3, 2009.
38
COMBINED PORTFOLIO OF INVESTMENTS
Seligman Smaller-Cap Value Fund
JUNE 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (98.9%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
AEROSPACE & DEFENSE (3.1%)
American Science &
Engineering -- 1,073 1,073 $ -- $ 74,166 $ 74,166
Applied Signal
Technology -- 1,652 1,652 -- 42,143 42,143
Ceradyne -- 3,131 3,131(b) -- 55,293 55,293
Cubic 122,000 2,006 124,006 4,366,380 71,795 4,438,175
Curtiss-Wright -- 23,800(d) 23,800 -- 707,573 707,573
Esterline
Technologies -- 3,584 3,584(b) -- 97,019 97,019
HEICO -- 7,700(d) 7,700 -- 279,202 279,202
HEICO Cl A -- 5,900(d) 5,900 -- 172,634 172,634
Hexcel -- 34,600(d) 34,600(b) -- 329,738 329,738
Moog Cl A -- 34,249(d) 34,249(b) -- 883,966 883,966
Orbital Sciences -- 6,904(d) 6,904(b) -- 104,734 104,734
Teledyne
Technologies -- 3,817 3,817(b) -- 125,007 125,007
TransDigm Group -- 2,259(d) 2,259(b) -- 81,776 81,776
Triumph Group -- 2,063 2,063 -- 82,520 82,520
------------------------------------------------
Total 4,366,380 3,107,566 7,473,946
------------------------------------------------
AIR FREIGHT & LOGISTICS (0.2%)
Hub Group Cl A -- 4,108 4,108(b) -- 84,789 84,789
UTI Worldwide -- 31,200 31,200(b,c) -- 355,680 355,680
------------------------------------------------
Total -- 440,469 440,469
------------------------------------------------
AIRLINES (2.6%)
Continental
Airlines Cl B 280,000 -- 280,000(b) 2,480,800 -- 2,480,800
Delta Air Lines 625,000 -- 625,000(b) 3,618,750 -- 3,618,750
SkyWest -- 6,102 6,102 -- 62,240 62,240
------------------------------------------------
Total 6,099,550 62,240 6,161,790
------------------------------------------------
AUTO COMPONENTS (0.1%)
Autoliv -- 528(d) 528(c) -- 15,191 15,191
HAWK Cl A -- 6,126 6,126(b) -- 84,845 84,845
Superior Inds Intl -- 2,271 2,271 -- 32,021 32,021
TRW Automotive
Holdings -- 3,471(d) 3,471(b) -- 39,222 39,222
WABCO Holdings -- 2,123 2,123 -- 37,577 37,577
------------------------------------------------
Total -- 208,856 208,856
------------------------------------------------
BEVERAGES (1.4%)
Central European
Distribution 100,000 -- 100,000(b) 2,657,000 -- 2,657,000
Hansen Natural -- 24,600(d) 24,600(b) -- 758,172 758,172
------------------------------------------------
Total 2,657,000 758,172 3,415,172
------------------------------------------------
BIOTECHNOLOGY (0.5%)
Alkermes -- 500 500(b) -- 5,410 5,410
Cubist
Pharmaceuticals -- 34,919 34,919(b) -- 640,065 640,065
Emergent
BioSolutions -- 1,796(d) 1,796(b) -- 25,737 25,737
Enzon
Pharmaceuticals -- 3,740(d) 3,740(b) -- 29,434 29,434
Martek Biosciences -- 21,509 21,509 -- 454,915 454,915
------------------------------------------------
Total -- 1,155,561 1,155,561
------------------------------------------------
BUILDING PRODUCTS (0.1%)
Apogee Enterprises -- 3,466(d) 3,466 -- 42,632 42,632
Gibraltar Inds -- 5,714(d) 5,714 -- 39,255 39,255
</Table>
39
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
BUILDING PRODUCTS (CONT.)
Lennox Intl -- 1,601 1,601 $ -- $ 51,408 $ 51,408
NCI Building
Systems -- 2,600(d) 2,600(b) -- 6,864 6,864
Simpson Mfg -- 4,590(d) 4,590 -- 99,236 99,236
------------------------------------------------
Total -- 239,395 239,395
------------------------------------------------
CAPITAL MARKETS (1.0%)
Calamos Asset
Management Cl A -- 13,925(d) 13,925 -- 196,482 196,482
Eaton Vance -- 7,100 7,100 -- 189,925 189,925
Evercore Partners
Cl A -- 6,300(d) 6,300 -- 123,732 123,732
Gladstone Capital -- 24,900 24,900 -- 187,497 187,497
Investment
Technology Group -- 5,506 5,506(b) -- 112,267 112,267
Knight Capital
Group Cl A -- 4,123 4,123(b) -- 70,297 70,297
LaBranche & Co -- 1,276 1,276(b) -- 5,487 5,487
optionsXpress
Holdings -- 76,306 76,306 -- 1,185,032 1,185,032
Stifel Financial -- 770(d) 770(b) -- 37,029 37,029
SWS Group -- 3,475 3,475 -- 48,546 48,546
TD Ameritrade
Holding -- 251 251(b) -- 4,398 4,398
TradeStation Group -- 11,287 11,287(b) -- 95,488 95,488
Waddell & Reed
Financial Cl A -- 7,300(d) 7,300 -- 192,501 192,501
------------------------------------------------
Total -- 2,448,681 2,448,681
------------------------------------------------
CHEMICALS (1.4%)
Airgas -- 5,200 5,200 -- 210,756 210,756
Albemarle -- 20,100(d) 20,100 -- 513,957 513,957
CF Inds Holdings -- 1,195 1,195 -- 88,597 88,597
Innophos Holdings -- 1,810 1,810 -- 30,571 30,571
Koppers Holdings -- 9,852 9,852 -- 259,797 259,797
Minerals
Technologies 40,000 314 40,314 1,440,800 11,310 1,452,110
OM Group -- 3,449(d) 3,449(b) -- 100,090 100,090
Schulman A -- 3,329 3,329 -- 50,301 50,301
Scotts Miracle-Gro
Cl A -- 17,057 17,057 -- 597,849 597,849
Solutia -- 13,613 13,613(b) -- 78,411 78,411
------------------------------------------------
Total 1,440,800 1,941,639 3,382,439
------------------------------------------------
COMMERCIAL BANKS (1.0%)
Bank of Hawaii -- 3,250 3,250 -- 116,448 116,448
Bank of the Ozarks -- 29,700(d) 29,700 -- 642,410 642,410
Central Pacific
Financial -- 3,988(d) 3,988 -- 14,955 14,955
City Natl -- 1,140(d) 1,140 -- 41,986 41,986
Commerce Bancshares -- 3,382(d) 3,382 -- 107,649 107,649
Community Bank
System -- 4,092(d) 4,092 -- 59,580 59,580
CVB Financial -- 5,907(d) 5,907 -- 35,265 35,265
First Merit -- 2,349(d) 2,349 -- 39,886 39,886
Glacier Bancorp -- 7,555(d) 7,555 -- 111,587 111,587
NBT Bancorp -- 4,511(d) 4,511 -- 97,934 97,934
PacWest Bancorp -- 1,299 1,299 -- 17,095 17,095
Prosperity
Bancshares -- 15,594(d) 15,594 -- 465,169 465,169
Signature Bank -- 3,739 3,739(b) -- 101,402 101,402
Sterling Bancshares -- 9,062(d) 9,062 -- 57,362 57,362
SVB Financial Group -- 4,231(d) 4,231(b) -- 115,168 115,168
TCF Financial -- 2,977(d) 2,977 -- 39,802 39,802
Tompkins Financial -- 704(d) 704 -- 33,757 33,757
Trustmark -- 1,903 1,903 -- 36,766 36,766
UMB Financial -- 4,832(d) 4,832 -- 183,664 183,664
United Bankshares -- 2,042(d) 2,042 -- 39,901 39,901
Valley Natl Bancorp -- 6,676(d) 6,676 -- 78,109 78,109
</Table>
40
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
COMMERCIAL BANKS (CONT.)
Westamerica
Bancorporation -- 877 877 $ -- $ 43,508 $ 43,508
Wilshire Bancorp -- 2,268 2,268 -- 13,041 13,041
------------------------------------------------
Total -- 2,492,444 2,492,444
------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (3.3%)
ABM Inds -- 5,464(d) 5,464 -- 98,734 98,734
ATC Technology -- 2,683 2,683(b) -- 38,904 38,904
Brink's 75,000 -- 75,000 2,177,250 -- 2,177,250
Clean Harbors -- 6,250 6,250(b) -- 337,438 337,438
Knoll -- 18,835(d) 18,835 -- 142,769 142,769
Mobile Mini -- 28,000(d) 28,000(b) -- 410,760 410,760
PRG-Schultz Intl -- 3,974 3,974(b) -- 10,730 10,730
Sykes Enterprises -- 58,100 58,100(b) -- 1,051,029 1,051,029
Tetra Tech -- 6,373 6,373(b) -- 182,586 182,586
Waste Connections 120,000 17,800(d) 137,800(b) 3,109,200 461,198 3,570,398
------------------------------------------------
Total 5,286,450 2,734,148 8,020,598
------------------------------------------------
COMMUNICATIONS EQUIPMENT (3.6%)
ADTRAN -- 24,600(d) 24,600 -- 528,162 528,162
ARRIS Group -- 17,391 17,391(b) -- 211,475 211,475
Avocent -- 3,013(d) 3,013(b) -- 42,061 42,061
Blue Coat Systems -- 13,039(d) 13,039(b) -- 215,665 215,665
Ciena -- 12,100(d) 12,100(b) -- 125,235 125,235
CommScope -- 28,900 28,900(b) -- 758,914 758,914
Comtech
Telecommunications -- 3,153 3,153(b) -- 100,518 100,518
F5 Networks 145,000 11,100 156,100(b) 5,015,550 383,949 5,399,499
Harmonic -- 12,144(d) 12,144(b) -- 71,528 71,528
InterDigital -- 2,809 2,809(b) -- 68,652 68,652
NETGEAR -- 38,100 38,100(b) -- 549,021 549,021
ORBCOMM -- 63,300(d) 63,300(b) -- 111,408 111,408
PC-Tel -- 1,932(d) 1,932(b) -- 10,336 10,336
Riverbed Technology -- 16,711(d) 16,711(b) -- 387,528 387,528
Sierra Wireless -- 4,750 4,750(b,c) -- 27,170 27,170
Symmetricom -- 5,342(d) 5,342(b) -- 30,823 30,823
Tekelec -- 6,971(d) 6,971(b) -- 117,322 117,322
Tollgrade
Communications -- 637 637(b) -- 3,338 3,338
------------------------------------------------
Total 5,015,550 3,743,105 8,758,655
------------------------------------------------
COMPUTERS & PERIPHERALS (0.3%)
Adaptec -- 10,275 10,275(b) -- 27,229 27,229
Hutchinson
Technology -- 2,374(d) 2,374(b) -- 4,629 4,629
Lexmark Intl Cl A -- 3,776 3,776(b) -- 59,850 59,850
Novatel Wireless -- 4,727 4,727(b) -- 42,638 42,638
Seagate Technology -- 3,516 3,516(c) -- 36,777 36,777
Stratasys -- 19,400 19,400(b) -- 213,206 213,206
Synaptics -- 6,844(d) 6,844(b) -- 264,520 264,520
------------------------------------------------
Total -- 648,849 648,849
------------------------------------------------
CONSTRUCTION & ENGINEERING (1.6%)
Chicago Bridge &
Iron -- 10,700 10,700(c) -- 132,680 132,680
Comfort Systems USA -- 4,783 4,783 -- 49,026 49,026
EMCOR Group -- 16,816 16,816(b) -- 338,338 338,338
Furmanite -- 1,594 1,594(b) -- 7,109 7,109
Insituform
Technologies Cl A -- 4,328 4,328(b) -- 73,446 73,446
</Table>
41
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
CONSTRUCTION & ENGINEERING (CONT.)
Michael Baker -- 3,061 3,061(b) $ -- $ 129,664 $ 129,664
Shaw Group 110,000 -- 110,000(b) 3,015,100 -- 3,015,100
------------------------------------------------
Total 3,015,100 730,263 3,745,363
------------------------------------------------
CONSUMER FINANCE (0.1%)
Cash America Intl -- 3,613 3,613 -- 84,509 84,509
First Cash
Financial Services -- 3,216(d) 3,216(b) -- 56,344 56,344
World Acceptance -- 2,121(d) 2,121(b) -- 42,229 42,229
------------------------------------------------
Total -- 183,082 183,082
------------------------------------------------
CONTAINERS & PACKAGING (1.8%)
Crown Holdings -- 499 499(b) -- 12,046 12,046
Owens-Illinois 125,000 -- 125,000(b) 3,501,250 -- 3,501,250
Rock-Tenn Cl A -- 12,929 12,929 -- 493,370 493,370
Silgan Holdings -- 2,497 2,497 -- 122,428 122,428
Sonoco Products -- 13,800 13,800 -- 330,510 330,510
------------------------------------------------
Total 3,501,250 958,354 4,459,604
------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (1.3%)
Capella Education -- 2,527(d) 2,527(b) -- 151,494 151,494
Hillenbrand -- 7,434 7,434 -- 123,702 123,702
Lincoln Educational
Services -- 16,900(d) 16,900(b) -- 353,716 353,716
Pre-Paid Legal
Services -- 971 971(b) -- 42,326 42,326
Sotheby's 180,000 -- 180,000 2,539,800 -- 2,539,800
Universal Technical
Institute -- 2,262(d) 2,262(b) -- 33,772 33,772
------------------------------------------------
Total 2,539,800 705,010 3,244,810
------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.1%)
Financial Federal -- 3,107(d) 3,107 -- 63,849 63,849
Interactive Brokers
Group Cl A -- 5,080 5,080(b) -- 78,892 78,892
------------------------------------------------
Total -- 142,741 142,741
------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.8%)
CenturyTel -- 4,843(d) 4,843 -- 148,680 148,680
Consolidated
Communications
Holdings -- 29,100 29,100 -- 340,761 340,761
Iowa
Telecommunications
Services -- 10,500(d) 10,500 -- 131,355 131,355
Neutral Tandem -- 2,090 2,090(b) -- 61,697 61,697
NTELOS Holdings -- 36,700 36,700 -- 676,014 676,014
tw telecom -- 49,800(d) 49,800(b) -- 511,446 511,446
------------------------------------------------
Total -- 1,869,953 1,869,953
------------------------------------------------
ELECTRIC UTILITIES (0.4%)
Central Vermont
Public Service -- 1,111 1,111 -- 20,109 20,109
Cleco -- 34,813(d) 34,813 -- 780,507 780,507
Maine & Maritimes -- 537 537 -- 18,661 18,661
Unisource Energy -- 4,465 4,465 -- 118,501 118,501
------------------------------------------------
Total -- 937,778 937,778
------------------------------------------------
ELECTRICAL EQUIPMENT (4.7%)
Acuity Brands -- 5,078(d) 5,078 -- 142,438 142,438
AO Smith -- 16,261 16,261 -- 529,621 529,621
Belden 130,000 28,100 158,100 2,171,000 469,270 2,640,270
Brady Cl A -- 7,751(d) 7,751 -- 194,705 194,705
EnerSys 180,000 -- 180,000(b) 3,274,200 -- 3,274,200
GrafTech Intl -- 21,648(d) 21,648(b) -- 244,839 244,839
Hubbell Cl B -- 2,706 2,706 -- 86,754 86,754
Regal-Beloit -- 16,400(d) 16,400 -- 651,408 651,408
</Table>
42
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
ELECTRIC EQUIPMENT (CONT.)
SunPower Cl B 45,000 -- 45,000(b) $ 1,077,750 $ -- $ 1,077,750
Thomas & Betts 80,000 9,211 89,211(b) 2,308,800 265,829 2,574,629
------------------------------------------------
Total 8,831,750 2,584,864 11,416,614
------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (1.5%)
Anixter Intl -- 16,800(d) 16,800(b) -- 631,512 631,512
Benchmark
Electronics -- 8,488 8,488(b) -- 122,227 122,227
Brightpoint -- 6,577(d) 6,577(b) -- 41,238 41,238
Celestica -- 41,252 41,252(b,c) -- 281,339 281,339
Cognex -- 4,257 4,257 -- 60,151 60,151
CTS -- 3,855 3,855 -- 25,250 25,250
Dolby Laboratories
Cl A -- 2,196(d) 2,196(b) -- 81,867 81,867
Electro Scientific
Inds -- 4,316(d) 4,316(b) -- 48,253 48,253
FARO Technologies -- 27,300 27,300(b) -- 423,969 423,969
Gerber Scientific -- 3,210 3,210(b) -- 8,025 8,025
Insight Enterprises -- 4,053 4,053(b) -- 39,152 39,152
Itron -- 1,806 1,806(b) -- 99,456 99,456
Keithley
Instruments -- 1,705 1,705 -- 6,820 6,820
LoJack -- 1,169 1,169(b) -- 4,898 4,898
Mercury Computer
Systems -- 2,073 2,073(b) -- 19,175 19,175
Methode Electronics -- 29,246 29,246 -- 205,307 205,307
Newport -- 4,586(d) 4,586(b) -- 26,553 26,553
Plexus -- 18,400 18,400(b) -- 376,464 376,464
RadiSys -- 2,671 2,671(b) -- 24,066 24,066
ScanSource -- 41,800(d) 41,800(b) -- 1,024,936 1,024,936
SYNNEX -- 2,332(d) 2,332(b) -- 58,277 58,277
TTM Technologies -- 4,878 4,878(b) -- 38,829 38,829
------------------------------------------------
Total -- 3,647,764 3,647,764
------------------------------------------------
ENERGY EQUIPMENT & SERVICES (2.6%)
Atwood Oceanics -- 4,556(d) 4,556(b) -- 113,490 113,490
Basic Energy
Services -- 13,312 13,312(b) -- 90,921 90,921
CARBO Ceramics -- 12,675(d) 12,675 -- 433,485 433,485
Complete Production
Services -- 16,700 16,700(b) -- 106,212 106,212
Dril-Quip -- 14,744(d) 14,744(b) -- 561,746 561,746
ENGlobal -- 1,360 1,360(b) -- 6,691 6,691
Exterran Holdings 100,000 -- 100,000(b) 1,604,000 -- 1,604,000
Lufkin Inds -- 605 605 -- 25,440 25,440
Matrix Service -- 3,124 3,124(b) -- 35,864 35,864
Oil States Intl -- 12,157 12,157(b) -- 294,321 294,321
Pride Intl -- 14,100 14,100(b) -- 353,346 353,346
T-3 Energy Services -- 1,560 1,560(b) -- 18,580 18,580
TETRA Technologies 300,000 -- 300,000(b) 2,388,000 -- 2,388,000
Unit -- 5,661 5,661(b) -- 156,074 156,074
------------------------------------------------
Total 3,992,000 2,196,170 6,188,170
------------------------------------------------
FOOD & STAPLES RETAILING (0.7%)
Nash Finch -- 1,759(d) 1,759 -- 47,599 47,599
Ruddick -- 13,100(d) 13,100 -- 306,933 306,933
Spartan Stores -- 3,026 3,026 -- 37,553 37,553
United Natural
Foods -- 46,010(d) 46,010(b) -- 1,207,762 1,207,762
------------------------------------------------
Total -- 1,599,847 1,599,847
------------------------------------------------
FOOD PRODUCTS (2.4%)
B&G Foods Cl A -- 27,600 27,600 -- 232,116 232,116
Cosan Cl A -- 28,100(d) 28,100(b,c) -- 145,558 145,558
</Table>
43
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
FOOD PRODUCTS (CONT.)
Darling Intl -- 64,268 64,268(b) $ -- $ 424,169 $ 424,169
Diamond Foods -- 2,041 2,041 -- 56,944 56,944
Green Mountain
Coffee Roasters -- 2,806(d) 2,806(b) -- 165,861 165,861
J&J Snack Foods -- 18,688 18,688 -- 670,899 670,899
Lancaster Colony -- 1,676 1,676 -- 73,861 73,861
Overhill Farms -- 9,873 9,873(b) -- 52,031 52,031
Sanderson Farms -- 1,883 1,883 -- 84,735 84,735
Smithfield Foods 235,000 -- 235,000(b) 3,282,950 -- 3,282,950
TreeHouse Foods -- 23,162(d) 23,162(b) -- 666,371 666,371
ZHONGPIN INC -- 1,943(d) 1,943 -- 20,129 20,129
------------------------------------------------
Total 3,282,950 2,592,674 5,875,624
------------------------------------------------
GAS UTILITIES (0.4%)
Atmos Energy -- 9,836 9,836 -- 246,294 246,294
Laclede Group -- 4,711 4,711 -- 156,075 156,075
New Jersey
Resources -- 5,136 5,136 -- 190,237 190,237
Northwest Natural
Gas -- 1,131(d) 1,131 -- 50,126 50,126
South Jersey Inds -- 3,040 3,040 -- 106,066 106,066
Southwest Gas -- 1,643 1,643 -- 36,491 36,491
UGI -- 8,304 8,304 -- 211,669 211,669
------------------------------------------------
Total -- 996,958 996,958
------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (2.1%)
Abaxis -- 8,000(d) 8,000(b) -- 164,320 164,320
American Medical
Systems Holdings -- 9,997 9,997(b) -- 157,953 157,953
Analogic 22,900 -- 22,900 846,155 -- 846,155
Conmed -- 4,702(d) 4,702(b) -- 72,975 72,975
Cooper Companies -- 30,880(d) 30,880 -- 763,662 763,662
Cyberonics -- 4,161 4,161(b) -- 69,197 69,197
Edwards
Lifesciences -- 488 488(b) -- 33,199 33,199
Greatbatch -- 7,964(d) 7,964(b) -- 180,066 180,066
Haemonetics -- 2,466 2,466(b) -- 140,562 140,562
ICU Medical -- 1,604 1,604(b) -- 66,005 66,005
IDEXX Laboratories -- 4,900(d) 4,900(b) -- 226,380 226,380
Immucor -- 45,200 45,200(b) -- 621,952 621,952
Integra
LifeSciences
Holdings -- 26,100(d) 26,100(b) -- 691,911 691,911
Invacare -- 11,973(d) 11,973 -- 211,323 211,323
Kensey Nash -- 3,415 3,415(b) -- 89,507 89,507
Natus Medical -- 12,100(d) 12,100(b) -- 139,634 139,634
STERIS -- 1,078(d) 1,078 -- 28,114 28,114
Symmetry Medical -- 63,200 63,200(b) -- 589,024 589,024
Thoratec -- 3,324(d) 3,324(b) -- 89,017 89,017
------------------------------------------------
Total 846,155 4,334,801 5,180,956
------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (4.7%)
Air Methods -- 17,500(d) 17,500(b) -- 478,800 478,800
Amedisys -- 24,600(d) 24,600(b) -- 812,292 812,292
AMERIGROUP -- 21,311 21,311(b) -- 572,200 572,200
AmSurg -- 1,041(d) 1,041(b) -- 22,319 22,319
Catalyst Health
Solutions -- 37,005(d) 37,005(b) -- 922,905 922,905
Centene -- 30,780 30,780(b) -- 614,984 614,984
Emergency Medical
Services Cl A -- 3,609 3,609(b) -- 132,883 132,883
Gentiva Health
Services -- 3,349 3,349(b) -- 55,125 55,125
HealthSpring -- 6,293 6,293(b) -- 68,342 68,342
HMS Holdings -- 2,732(d) 2,732(b) -- 111,247 111,247
LHC Group -- 4,021 4,021(b) -- 89,306 89,306
</Table>
44
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
HEALTH CARE PROVIDERS & SERVICES (CONT.)
LifePoint Hospitals -- 23,200(d) 23,200(b) $ -- $ 609,000 $ 609,000
Magellan Health
Services -- 3,970 3,970(b) -- 130,295 130,295
Molina Healthcare -- 1,817(d) 1,817(b) -- 43,463 43,463
MWI Veterinary
Supply -- 12,650(d) 12,650(b) -- 440,979 440,979
NightHawk Radiology
Holdings -- 1,495 1,495(b) -- 5,532 5,532
PharMerica -- 4,005(d) 4,005(b) -- 78,618 78,618
PSS World Medical -- 69,282(d) 69,282(b) -- 1,282,411 1,282,411
Psychiatric
Solutions -- 39,700(d) 39,700(b) -- 902,778 902,778
RehabCare Group -- 2,073 2,073(b) -- 49,607 49,607
VCA Antech -- 31,300 31,300(b) -- 835,710 835,710
WellCare Health
Plans 170,034 -- 170,034(b) 3,143,929 -- 3,143,929
------------------------------------------------
Total 3,143,929 8,258,796 11,402,725
------------------------------------------------
HEALTH CARE TECHNOLOGY (1.6%)
Eclipsys 190,000 -- 190,000(b) 3,378,200 -- 3,378,200
Phase Forward -- 27,500(d) 27,500(b) -- 415,525 415,525
------------------------------------------------
Total 3,378,200 415,525 3,793,725
------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (3.9%)
AFC Enterprises -- 12,581 12,581(b) -- 84,922 84,922
Bally Technologies -- 4,166(d) 4,166(b) -- 124,647 124,647
CEC Entertainment -- 9,633 9,633(b) -- 283,981 283,981
Cheesecake Factory -- 18,200(d) 18,200(b) -- 314,860 314,860
Chipotle Mexican
Grill Cl B -- 4,000 4,000(b) -- 279,160 279,160
Choice Hotels Intl -- 5,287(d) 5,287 -- 140,687 140,687
Cracker Barrel Old
Country Store -- 2,758(d) 2,758 -- 76,948 76,948
Einstein Noah
Restaurant Group -- 968 968(b) -- 8,373 8,373
Isle of Capri
Casinos -- 1,370 1,370(b) -- 18,248 18,248
Panera Bread Cl A -- 3,359(d) 3,359(b) -- 167,480 167,480
Penn Natl Gaming 120,000 -- 120,000(b) 3,493,200 -- 3,493,200
PF Chang's China
Bistro -- 3,294(d) 3,294(b) -- 105,606 105,606
Ruth's Hospitality
Group -- 2,293(d) 2,293(b) -- 8,415 8,415
Texas Roadhouse CI
A 330,000 48,600(d) 378,600(b) 3,600,300 530,225 4,130,525
WMS Inds -- 6,401(d) 6,401(b) -- 201,696 201,696
------------------------------------------------
Total 7,093,500 2,345,248 9,438,748
------------------------------------------------
HOUSEHOLD DURABLES (0.3%)
Harman Intl Inds -- 3,698(d) 3,698 -- 69,522 69,522
Meritage Homes -- 3,816 3,816(b) -- 71,970 71,970
Mohawk Inds -- 4,600(d) 4,600(b) -- 164,128 164,128
Universal
Electronics -- 24,417 24,417(b) -- 492,491 492,491
------------------------------------------------
Total -- 798,111 798,111
------------------------------------------------
HOUSEHOLD PRODUCTS ( -- %)
Central Garden &
Pet Cl A -- 8,945 8,945(b) -- 88,108 88,108
------------------------------------------------
INSURANCE (11.8%)
Allied World
Assurance Holdings -- 5,531 5,531(c) -- 225,831 225,831
American Financial
Group -- 8,398 8,398 -- 181,229 181,229
Amerisafe -- 4,590 4,590(b) -- 71,420 71,420
Aspen Insurance
Holdings 152,000 26,922 178,922(c) 3,395,680 601,437 3,997,117
Brown & Brown -- 41,000 41,000 -- 817,130 817,130
Delphi Financial
Group Cl A -- 5,199 5,199 -- 101,017 101,017
Endurance Specialty
Holdings 114,000 -- 114,000(c) 3,340,200 -- 3,340,200
Hanover Insurance
Group 91,000 -- 91,000 3,468,010 -- 3,468,010
HCC Insurance
Holdings -- 55,250 55,250 -- 1,326,552 1,326,552
Infinity Property &
Casualty 90,000 -- 90,000 3,281,400 -- 3,281,400
</Table>
45
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
INSURANCE (CONT.)
Lincoln Natl 295,000 -- 295,000 $ 5,076,950 $ -- $ 5,076,950
Montpelier Re
Holdings -- 15,500 15,500(c) -- 205,995 205,995
Navigators Group -- 1,557 1,557(b) -- 69,178 69,178
Platinum
Underwriters
Holdings -- 3,978 3,978(c) -- 113,731 113,731
Protective Life -- 32,800(d) 32,800 -- 375,232 375,232
RLI -- 19,200(d) 19,200 -- 860,160 860,160
StanCorp Financial
Group -- 33,100 33,100 -- 949,308 949,308
Tower Group -- 28,013(d) 28,013 -- 694,162 694,162
United Fire &
Casualty -- 3,590 3,590 -- 61,569 61,569
Validus Holdings -- 5,620 5,620(c) -- 123,528 123,528
WR Berkley 145,000 -- 145,000 3,113,150 -- 3,113,150
------------------------------------------------
Total 21,675,390 6,777,479 28,452,869
------------------------------------------------
INTERNET & CATALOG RETAIL (0.2%)
NutriSystem -- 3,551(d) 3,551 -- 51,490 51,490
PetMed Express -- 25,182(d) 25,182 -- 378,485 378,485
Ticketmaster
Entertainment -- 5,200 5,200(b) -- 33,384 33,384
------------------------------------------------
Total -- 463,359 463,359
------------------------------------------------
INTERNET SOFTWARE & SERVICES (1.0%)
DealerTrack
Holdings -- 31,400(d) 31,400(b) -- 533,800 533,800
Dice Holdings -- 1,079(d) 1,079(b) -- 5,017 5,017
Digital River -- 16,100 16,100(b) -- 584,753 584,753
EarthLink -- 24,488(d) 24,488(b) -- 181,456 181,456
Equinix -- 3,200 3,200(b) -- 232,768 232,768
GSI Commerce -- 18,300(d) 18,300(b) -- 260,775 260,775
j2 Global
Communications -- 7,125(d) 7,125(b) -- 160,740 160,740
LogMein -- 1,473 1,473(b) -- 23,568 23,568
Open Text -- 2,943 2,943(b,c) -- 107,184 107,184
SAVVIS -- 19,900 19,900(b) -- 228,054 228,054
United Online -- 10,034 10,034 -- 65,321 65,321
------------------------------------------------
Total -- 2,383,436 2,383,436
------------------------------------------------
IT SERVICES (2.6%)
Acxiom -- 15,924 15,924 -- 140,609 140,609
Alliance Data
Systems -- 8,400(d) 8,400(b) -- 345,996 345,996
Broadridge
Financial Solutions -- 5,939 5,939 -- 98,469 98,469
CACI Intl Cl A 65,000 3,784 68,784(b) 2,776,150 161,615 2,937,765
Ciber -- 10,886 10,886(b) -- 33,747 33,747
CSG Systems Intl -- 17,800 17,800(b) -- 235,672 235,672
CyberSource -- 5,881(d) 5,881(b) -- 89,979 89,979
Global Cash Access
Holdings -- 14,422 14,422(b) -- 114,799 114,799
Global Payments -- 28,600(d) 28,600 -- 1,071,355 1,071,355
Heartland Payment
Systems -- 2,765 2,765 -- 26,461 26,461
Hewitt Associates
Cl A -- 4,332 4,332(b) -- 129,007 129,007
Integral Systems -- 15,700(d) 15,700(b) -- 130,624 130,624
MAXIMUS -- 7,700 7,700 -- 317,625 317,625
SAIC -- 5,210 5,210(b) -- 96,646 96,646
Wright Express -- 19,871 19,871(b) -- 506,114 506,114
------------------------------------------------
Total 2,776,150 3,498,718 6,274,868
------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.1%)
JAKKS Pacific -- 3,463 3,463(b) -- 44,430 44,430
Polaris Inds -- 5,021(d) 5,021 -- 161,275 161,275
Sport Supply Group -- 1,876 1,876 -- 16,115 16,115
------------------------------------------------
Total -- 221,820 221,820
------------------------------------------------
</Table>
46
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
LIFE SCIENCES TOOLS & SERVICES (1.4%)
Bio-Rad
Laboratories Cl A -- 1,029(d) 1,029(b) $ -- $ 77,669 $ 77,669
Dionex -- 2,306(d) 2,306(b) -- 140,735 140,735
ICON ADR -- 46,800(d) 46,800(b,c) -- 1,009,944 1,009,944
Kendle Intl -- 21,700 21,700(b) -- 265,608 265,608
Life Technologies -- 1,876 1,876(b) -- 78,267 78,267
PerkinElmer -- 50,300 50,300 -- 875,220 875,220
Techne -- 14,300 14,300 -- 912,483 912,483
------------------------------------------------
Total -- 3,359,926 3,359,926
------------------------------------------------
MACHINERY (3.3%)
Actuant Cl A -- 36,900 36,900 -- 450,180 450,180
Altra Holdings -- 4,340 4,340(b) -- 32,507 32,507
Blount Intl -- 4,401(d) 4,401(b) -- 37,893 37,893
Chart Inds -- 9,998 9,998(b) -- 181,764 181,764
CIRCOR Intl -- 2,078 2,078 -- 49,062 49,062
Clarcor -- 28,400 28,400 -- 828,995 828,995
EnPro Inds -- 6,621(d) 6,621(b) -- 119,244 119,244
ESCO Technologies -- 1,823(d) 1,823(b) -- 81,670 81,670
Gardner Denver -- 9,805 9,805(b) -- 246,792 246,792
Graco -- 22,900(d) 22,900 -- 504,258 504,258
Hardinge -- 1,971 1,971 -- 8,377 8,377
IDEX -- 47,680(d) 47,680 -- 1,171,497 1,171,497
Lydall -- 1,776 1,776(b) -- 6,038 6,038
Mueller Inds 135,000 -- 135,000 2,808,000 -- 2,808,000
RBC Bearings -- 38,700 38,700(b) -- 791,415 791,415
Robbins & Myers -- 12,647 12,647 -- 243,455 243,455
Timken -- 8,646 8,646 -- 147,674 147,674
Toro -- 3,295(d) 3,295 -- 98,521 98,521
Watts Water
Technologies Cl A -- 3,672 3,672 -- 79,095 79,095
------------------------------------------------
Total 2,808,000 5,078,437 7,886,437
------------------------------------------------
MARINE (0.1%)
Kirby -- 10,460(d) 10,460(b) -- 332,523 332,523
------------------------------------------------
MEDIA (0.8%)
CTC Media -- 2,259(d) 2,259(b,c) -- 26,701 26,701
DreamWorks
Animation SKG Cl A -- 467 467(b) -- 12,885 12,885
John Wiley & Sons
Cl A -- 28,000 28,000 -- 931,000 931,000
Mediacom
Communications Cl A -- 3,442 3,442(b) -- 17,589 17,589
Regal Entertainment
Group Cl A -- 62,900 62,900 -- 835,941 835,941
------------------------------------------------
Total -- 1,824,116 1,824,116
------------------------------------------------
METALS & MINING (0.5%)
Brush Engineered
Materials -- 2,574(d) 2,574(b) -- 43,115 43,115
Cliffs Natural
Resources -- 1,104 1,104 -- 27,015 27,015
Compass Minerals
Intl -- 2,853(d) 2,853 -- 156,658 156,658
Eldorado Gold -- 52,800(d) 52,800(b,c) -- 472,560 472,560
Reliance Steel &
Aluminum -- 14,900 14,900 -- 572,011 572,011
------------------------------------------------
Total -- 1,271,359 1,271,359
------------------------------------------------
MULTILINE RETAIL (2.0%)
Big Lots -- 8,900(d) 8,900(b) -- 187,167 187,167
Dollar Tree -- 3,912 3,912(b) -- 164,695 164,695
Fred's Cl A 350,000 4,995 354,995 4,410,000 62,937 4,472,937
------------------------------------------------
Total 4,410,000 414,799 4,824,799
------------------------------------------------
</Table>
47
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
MULTI-UTILITIES (0.1%)
CH Energy Group -- 1,203(d) 1,203 $ -- $ 56,180 $ 56,180
NorthWestern -- 11,900 11,900 -- 270,844 270,844
------------------------------------------------
Total -- 327,024 327,024
------------------------------------------------
OFFICE ELECTRONICS (0.1%)
Zebra Technologies
Cl A -- 10,408(d) 10,408(b) -- 246,253 246,253
------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (2.1%)
Alpha Natural
Resources -- 18,732(d) 18,732(b) -- 492,090 492,090
Arena Resources -- 20,000(d) 20,000(b) -- 637,000 637,000
Bill Barrett -- 15,500 15,500(b) -- 425,630 425,630
Comstock Resources -- 25,800(d) 25,800(b) -- 852,690 852,690
Concho Resources -- 30,600 30,600(b) -- 877,914 877,914
Denbury Resources -- 15,000 15,000(b) -- 220,950 220,950
Encore Acquisition -- 2,700 2,700(b) -- 83,295 83,295
EXCO Resources -- 69,900 69,900(b) -- 903,108 903,108
Penn Virginia -- 4,394 4,394 -- 71,930 71,930
Petroleum
Development -- 1,902 1,902(b) -- 29,842 29,842
SandRidge Energy -- 16,400 16,400(b) -- 139,728 139,728
St. Mary Land &
Exploration -- 6,841 6,841 -- 142,772 142,772
Stone Energy -- 4,251 4,251(b) -- 31,542 31,542
World Fuel Services -- 3,759(d) 3,759 -- 154,984 154,984
------------------------------------------------
Total -- 5,063,475 5,063,475
------------------------------------------------
PAPER & FOREST PRODUCTS (0.1%)
Buckeye
Technologies -- 12,750 12,750(b) -- 57,248 57,248
Clearwater Paper -- 1,908 1,908(b) -- 48,253 48,253
Kapstone Paper and
Packaging -- 5,839 5,839(b) -- 27,385 27,385
------------------------------------------------
Total -- 132,886 132,886
------------------------------------------------
PERSONAL PRODUCTS (1.7%)
Chattem -- 1,730(d) 1,730(b) -- 117,813 117,813
Herbalife 124,500 -- 124,500(c) 3,926,730 -- 3,926,730
------------------------------------------------
Total 3,926,730 117,813 4,044,543
------------------------------------------------
PHARMACEUTICALS (0.2%)
King
Pharmaceuticals -- 15,730 15,730(b) -- 151,480 151,480
Matrixx Initiatives -- 623(d) 623(b) -- 3,483 3,483
Medicis
Pharmaceutical Cl A -- 9,995(d) 9,995 -- 163,118 163,118
Perrigo -- 6,200 6,200 -- 172,236 172,236
Questcor
Pharmaceuticals -- 2,279(d) 2,279(b) -- 11,395 11,395
Sucampo
Pharmaceuticals Cl
A -- 1,023 1,023(b) -- 6,312 6,312
ViroPharma -- 15,579 15,579(b) -- 92,383 92,383
------------------------------------------------
Total -- 600,407 600,407
------------------------------------------------
PROFESSIONAL SERVICES (3.3%)
Administaff -- 17,600 17,600 -- 409,552 409,552
Advisory Board -- 16,000 16,000(b) -- 411,200 411,200
COMSYS IT Partners -- 12,624 12,624(b) -- 73,850 73,850
FTI Consulting -- 20,200(d) 20,200(b) -- 1,024,545 1,024,545
Heidrick &
Struggles Intl -- 2,025(d) 2,025 -- 36,956 36,956
Huron Consulting
Group -- 6,700(d) 6,700(b) -- 309,741 309,741
Kforce -- 43,800(d) 43,800(b) -- 362,226 362,226
MPS Group -- 63,000 63,000(b) -- 481,320 481,320
On Assignment -- 1,597 1,597(b) -- 6,244 6,244
Resources
Connection -- 41,600 41,600(b) -- 714,272 714,272
Robert Half Intl -- 29,000(d) 29,000 -- 684,980 684,980
School Specialty 155,000 8,900(d) 163,900(b) 3,132,550 179,869 3,312,419
</Table>
48
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
PROFESSIONAL SERVICES (CONT.)
Spherion -- 2,000 2,000(b) $ -- $ 8,240 $ 8,240
Watson Wyatt
Worldwide Cl A -- 1,442 1,442 -- 54,118 54,118
------------------------------------------------
Total 3,132,550 4,757,113 7,889,663
------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (1.6%)
Colonial Properties
Trust -- 8,098 8,098 -- 59,925 59,925
Corporate Office
Properties Trust -- 2,292(d) 2,292 -- 67,224 67,224
Equity Lifestyle
Properties -- 7,760 7,760 -- 288,517 288,517
Extra Space Storage -- 4,266(d) 4,266 -- 35,621 35,621
Gladstone
Commercial -- 19,300(d) 19,300 -- 250,128 250,128
Hatteras Financial -- 3,000 3,000 -- 85,770 85,770
Highwoods
Properties -- 5,200 5,200 -- 116,324 116,324
Home Properties -- 3,926 3,926 -- 133,877 133,877
Kilroy Realty -- 4,277(d) 4,277 -- 87,850 87,850
Mack-Cali Realty -- 5,975 5,975 -- 136,230 136,230
MFA Financial -- 147,700 147,700 -- 1,022,084 1,022,084
Mid-America
Apartment
Communities -- 9,305(d) 9,305 -- 341,587 341,587
Natl Retail
Properties -- 9,578 9,578 -- 166,178 166,178
PS Business Parks -- 2,862(d) 2,862 -- 138,635 138,635
Realty Income -- 3,196(d) 3,196 -- 70,056 70,056
Senior Housing
Properties Trust -- 13,890 13,890 -- 226,685 226,685
Sovran Self Storage -- 2,718 2,718 -- 66,863 66,863
Sunstone Hotel
Investors -- 40,715(d) 40,715 -- 217,825 217,825
Tanger Factory
Outlet Centers -- 4,032 4,032 -- 130,758 130,758
Taubman Centers -- 10,941(d) 10,941 -- 293,875 293,875
------------------------------------------------
Total -- 3,936,012 3,936,012
------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (0.2%)
Jones Lang LaSalle -- 12,700 12,700 -- 415,671 415,671
Thomas Properties
Group -- 30,500 30,500 -- 47,885 47,885
------------------------------------------------
Total -- 463,556 463,556
------------------------------------------------
ROAD & RAIL (1.4%)
Arkansas Best -- 14,343(d) 14,343 -- 377,938 377,938
Dollar Thrifty
Automotive Group -- 5,540 5,540(b) -- 77,283 77,283
Heartland Express -- 75,413(d) 75,413 -- 1,110,078 1,110,078
JB Hunt Transport
Services -- 25,600 25,600 -- 781,568 781,568
Knight
Transportation -- 62,110(d) 62,110 -- 1,027,921 1,027,921
Old Dominion
Freight Line -- 2,922 2,922(b) -- 98,092 98,092
------------------------------------------------
Total -- 3,472,880 3,472,880
------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (6.1%)
Actel -- 1,568 1,568(b) -- 16,825 16,825
Advanced Energy
Inds -- 2,403 2,403(b) -- 21,603 21,603
ASM Intl -- 8,095(d) 8,095(b,c) -- 119,077 119,077
Atheros
Communications -- 7,600(d) 7,600(b) -- 146,224 146,224
ATMI -- 19,100(d) 19,100(b) -- 296,623 296,623
Cavium Networks -- 24,700(d) 24,700(b) -- 415,207 415,207
Cirrus Logic -- 1,195 1,195(b) -- 5,378 5,378
Cohu -- 1,028 1,028 -- 9,231 9,231
Cypress
Semiconductor 228,000 30,346 258,346(b) 2,097,600 279,183 2,376,783
Exar -- 6,894(d) 6,894(b) -- 49,568 49,568
FEI -- 4,698(d) 4,698(b) -- 107,584 107,584
FormFactor -- 28,000 28,000(b) -- 482,720 482,720
Integrated Device
Technology -- 9,473 9,473(b) -- 57,217 57,217
Micrel -- 2,980 2,980 -- 21,814 21,814
</Table>
49
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONT.)
MKS Instruments -- 5,348(d) 5,348(b) $ -- $ 70,540 $ 70,540
ON Semiconductor 450,000 -- 450,000(b) 3,087,000 -- 3,087,000
Pericom
Semiconductor -- 2,738 2,738(b) -- 23,054 23,054
Power Integrations -- 58,000(d) 58,000 -- 1,379,819 1,379,819
Rudolph
Technologies -- 3,725(d) 3,725(b) -- 20,562 20,562
Semtech -- 36,604 36,604(b) -- 582,370 582,370
Silicon Image -- 22,453(d) 22,453(b) -- 51,642 51,642
Silicon
Laboratories -- 1,841 1,841(b) -- 69,848 69,848
Skyworks Solutions -- 35,199 35,199(b) -- 344,246 344,246
Standard
Microsystems -- 8,068(d) 8,068(b) -- 164,991 164,991
Ultratech -- 1,480(d) 1,480(b) -- 18,219 18,219
Varian
Semiconductor
Equipment
Associates 158,000 7,948(d) 165,948(b) 3,790,420 190,673 3,981,093
Verigy -- 56,600 56,600(b,c) -- 688,822 688,822
Volterra
Semiconductor -- 6,093(d) 6,093(b) -- 80,062 80,062
------------------------------------------------
Total 8,975,020 5,713,102 14,688,122
------------------------------------------------
SOFTWARE (5.0%)
Blackbaud -- 36,400(d) 36,400 -- 566,020 566,020
Blackboard -- 2,100(d) 2,100(b) -- 60,606 60,606
CommVault Systems -- 29,600 29,600(b) -- 490,768 490,768
Epicor Software -- 5,693(d) 5,693(b) -- 30,173 30,173
Informatica -- 9,167(d) 9,167(b) -- 157,581 157,581
JDA Software Group -- 3,624 3,624(b) -- 54,215 54,215
Lawson Software 650,000 -- 650,000(b) 3,627,000 -- 3,627,000
Manhattan
Associates -- 1,411(d) 1,411(b) -- 25,708 25,708
Mentor Graphics -- 8,089 8,089(b) -- 44,247 44,247
NetScout Systems -- 3,709 3,709(b) -- 34,790 34,790
Progress Software -- 4,980 4,980(b) -- 105,427 105,427
Quest Software 307,000 43,303 350,303(b) 4,279,580 603,644 4,883,224
Soapstone Networks -- 6,236 6,236(b) -- 26,066 26,066
SolarWinds -- 500 500(b) -- 8,245 8,245
Solera Holdings -- 46,100 46,100(b) -- 1,170,940 1,170,940
SPSS -- 5,313(d) 5,313(b) -- 177,295 177,295
Sybase -- 6,982 6,982(b) -- 218,816 218,816
Synopsys -- 11,649 11,649(b) -- 227,272 227,272
Take-Two
Interactive
Software -- 10,334(d) 10,334 -- 97,863 97,863
Taleo Cl A -- 3,768 3,768(b) -- 68,841 68,841
Tyler Technologies -- 3,556 3,556(b) -- 55,545 55,545
------------------------------------------------
Total 7,906,580 4,224,062 12,130,642
------------------------------------------------
SPECIALTY RETAIL (0.8%)
Aaron Rents -- 6,135 6,135 -- 182,946 182,946
Aeropostale -- 3,668(d) 3,668(b) -- 125,702 125,702
Cabela's -- 4,890 4,890(b) -- 60,147 60,147
Cato Cl A -- 3,795 3,795 -- 66,185 66,185
Children's Place
Retail Stores -- 3,106 3,106(b) -- 82,092 82,092
Dress Barn -- 5,667(d) 5,667(b) -- 81,038 81,038
Finish Line Cl A -- 6,889 6,889 -- 51,116 51,116
Genesco -- 6,989 6,989(b) -- 131,184 131,184
GUESS? -- 7,000(d) 7,000 -- 180,460 180,460
Hibbett Sports -- 3,497(d) 3,497(b) -- 62,946 62,946
Hot Topic -- 11,610 11,610(b) -- 84,869 84,869
Jo-Ann Stores -- 10,819 10,819(b) -- 223,629 223,629
Midas -- 638(d) 638(b) -- 6,686 6,686
Stage Stores -- 4,851 4,851 -- 53,846 53,846
</Table>
50
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
SPECIALTY RETAIL (CONT.)
Tractor Supply -- 4,821(d) 4,821(b) $ -- $ 199,204 $ 199,204
Wet Seal Cl A -- 78,000 78,000(b) -- 239,459 239,459
------------------------------------------------
Total -- 1,831,509 1,831,509
------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (0.8%)
Carter's -- 7,046 7,046(b) -- 173,402 173,402
Fossil -- 5,518 5,518(b) -- 132,873 132,873
Liz Claiborne -- 6,961(d) 6,961 -- 20,048 20,048
Maidenform Brands -- 2,382(d) 2,382(b) -- 27,322 27,322
Steven Madden -- 1,847 1,847(b) -- 47,006 47,006
True Religion
Apparel -- 2,358(d) 2,358(b) -- 52,583 52,583
UniFirst -- 2,010 2,010 -- 74,712 74,712
Volcom -- 34,425(d) 34,425(b) -- 430,313 430,313
Warnaco Group -- 24,500(d) 24,500(b) -- 793,799 793,799
Wolverine World
Wide -- 6,212 6,212 -- 137,037 137,037
------------------------------------------------
Total -- 1,889,095 1,889,095
------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.1%)
Charter Financial -- 892(d) 892 -- 10,905 10,905
First Niagara
Financial Group -- 6,036 6,036 -- 68,931 68,931
Provident Financial
Services -- 6,652(d) 6,652 -- 60,533 60,533
Trustco Bank NY -- 11,124 11,124 -- 65,743 65,743
WSFS Financial -- 5,400 5,400 -- 147,474 147,474
------------------------------------------------
Total -- 353,586 353,586
------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (1.3%)
Beacon Roofing
Supply -- 58,137 58,137(b) -- 840,661 840,661
Interline Brands -- 26,200 26,200(b) -- 358,416 358,416
Rush Enterprises Cl
A -- 38,300(d) 38,300(b) -- 446,195 446,195
Watsco -- 27,700 27,700 -- 1,355,361 1,355,361
WESCO Intl -- 6,213(d) 6,213(b) -- 155,573 155,573
------------------------------------------------
Total -- 3,156,206 3,156,206
------------------------------------------------
TRANSPORTATION INFRASTRUCTURE (0.1%)
Aegean Marine
Petroleum Network 15,300 -- 15,300(c) 231,030 -- 231,030
------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.5%)
SBA Communications
Cl A -- 44,100(d) 44,100(b) -- 1,082,214 1,082,214
Syniverse Holdings -- 1,814 1,814(b) -- 29,078 29,078
------------------------------------------------
Total -- 1,111,292 1,111,292
---------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost:
$256,426,748) $120,331,814 $118,389,415 $238,721,229
---------------------------------------------------------------------------------------------------------------
<Caption>
EXCHANGE TRADED FUNDS (0.2%)
SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SPDR KBW Regional
Banking ETF -- 25,517 25,517 -- 467,727 467,727
---------------------------------------------------------------------------------------------------------------
TOTAL EXCHANGE
TRADED FUNDS
(Cost: $692,090) $ -- $ 467,727 $ 467,727
---------------------------------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (0.9%)
SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RiverSource Short-
Term Cash Fund,
0.31% -- 2,289,929 2,289,929(e) -- 2,289,929 2,289,929
---------------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET
FUND
(Cost: $2,289,929) $ -- $ 2,289,929 $ 2,289,929
---------------------------------------------------------------------------------------------------------------
</Table>
51
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (11.5%)
SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
SELIGMAN SELIGMAN
RIVERSOURCE SMALLER-CAP RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED VALUE FUND EQUITY FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime
Money Market Fund -- 27,827,706 27,827,706 $ -- $ 27,827,706 $ 27,827,706
---------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN
(Cost: $27,827,706) $ -- $ 27,827,706 $ 27,827,706
---------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost:
$287,236,473)(f) $120,331,814 $148,974,777 $269,306,591
---------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO COMBINED PORTFOLIO OF INVESTMENTS
(a) Securities are valued by policies described in Note 1 and/or 2 to the
financial statements in the annual report.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At June 30, 2009, the
value of foreign securities represented 6.5% of net assets.
(d) At June 30, 2009, security was partially or fully on loan. See Note 5 to the
financial statements.
(e) Affiliated Money Market Fund -- See Note 6 to the financial statements in
the annual report. The rate shown is the seven-day current annualized yield
at June 30, 2009.
(f) At June 30, 2009, the approximate cost of securities for federal income tax
purposes and the approximate aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
<Caption>
SELIGMAN
RIVERSOURCE SMALLER-CAP
SELIGMAN PARTNERS VALUE FUND
SMALLER-CAP SMALL CAP PRO FORMA
VALUE FUND EQUITY FUND COMBINED
Cost of securities for federal income tax purposes: $123,474,000 $163,762,000 $287,236,000
Unrealized appreciation $ 21,213,000 $ 7,751,000 $ 28,964,000
Unrealized depreciation (24,356,000) (22,538,000) (46,894,000)
-------------------------------------------------------------------------------------------------------
Net unrealized depreciation $ (3,143,000) $(14,787,000) $(17,930,000)
-------------------------------------------------------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
52
SELIGMAN FRONTIER FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (SELLING FUND)
INTRODUCTION TO PROPOSED FUND REORGANIZATION
April 30, 2009
The accompanying unaudited pro forma combining statement of assets and
liabilities and the statement of operations reflect the accounts of the two
funds at, and for, the 12-month period ending April 30, 2009. These statements
have been derived from financial statements prepared for the Seligman Frontier
Fund and the RiverSource Partners Small Cap Growth Fund as of April 30, 2009.
Seligman Frontier Fund invests 65% of its net assets in equity securities of
small U.S. companies. RiverSource Partners Small Cap Growth Fund invests
primarily in equity securities of companies with market capitalization, at the
time of investment, of up to $2 billion, or that fall within the range of the
Russell 2000 Growth Index.
Under the proposed Agreement and Plan of Reorganization, share classes of
RiverSource Partners Small Cap Growth Fund would be exchanged for share classes
of Seligman Frontier Fund.
<Table>
<Caption>
SELLING FUND BUYING FUND
---------------------------------------------------------------------------------------
RiverSource Partners Small Cap Growth Fund Class A Seligman Frontier Fund Class A
---------------------------------------------------------------------------------------
RiverSource Partners Small Cap Growth Fund Class B Seligman Frontier Fund Class B
---------------------------------------------------------------------------------------
RiverSource Partners Small Cap Growth Fund Class C Seligman Frontier Fund Class C
---------------------------------------------------------------------------------------
RiverSource Partners Small Cap Growth Fund Class I Seligman Frontier Fund Class I*
---------------------------------------------------------------------------------------
RiverSource Partners Small Cap Growth Fund Class R2 Seligman Frontier Fund Class R2
---------------------------------------------------------------------------------------
RiverSource Partners Small Cap Growth Fund Class R3 Seligman Frontier Fund Class R3*
---------------------------------------------------------------------------------------
RiverSource Partners Small Cap Growth Fund Class R4 Seligman Frontier Fund Class R4*
---------------------------------------------------------------------------------------
RiverSource Partners Small Cap Growth Fund Class R5 Seligman Frontier Fund Class R5
---------------------------------------------------------------------------------------
</Table>
* The inception date for the Seligman Frontier Fund Class I, Class R3 and
Class R4 shares was Aug. 3, 2009.
The pro forma combining statements have been prepared to give effect to the
proposed transaction on the historical operations of the accounting survivor,
Seligman Frontier Fund, as if the transaction had occurred at the beginning of
the fiscal year ending April 30, 2009.
53
SELIGMAN FRONTIER FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF ASSETS AND LIABILITIES
<Table>
<Caption>
RIVERSOURCE SELIGMAN SELIGMAN
PARTNERS FRONTIER FUND FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA PRO FORMA
FRONTIER FUND GROWTH FUND ADJUSTMENTS COMBINED
APRIL 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
ASSETS
Investments in securities, at cost
Unaffiliated issuers $44,798,768 $ 94,114,838 $ -- $138,913,606
Affiliated money market fund $ -- $ 1,921,807 $ -- $ 1,921,807
Investments of cash collateral received for
securities on loan $ -- $ 21,444,372 $ -- $ 21,444,372
---------------------------------------------------------------
Investments in securities, at value
Unaffiliated issuers* $35,047,701 $ 88,760,368 $ -- $123,808,069
Affiliated money market fund $ -- $ 1,921,807 $ -- $ 1,921,807
Investments of cash collateral received for
securities on loan $ -- $ 21,444,372 $ -- $ 21,444,372
Capital shares receivable 8,555 19,626 -- 28,181
Dividends and accrued interest receivable 1,736 42,532 -- 44,268
Receivable for investment securities sold 1,556,475 1,869,948 -- 3,426,423
Receivable from the Investment Manager 12,427 -- -- 12,427
Prepaid expenses 22,450 -- -- 22,450
Other assets 21,056 -- -- 21,056
------------------------------------------------------------------------------------------------------------------------
Total assets 36,670,400 114,058,653 -- 150,729,053
------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 83,822 61,181 -- 145,003
Payable for investment securities purchased 1,549,504 1,901,365 -- 3,450,869
Payable upon return of securities loaned -- 21,444,372 -- 21,444,372
Accrued investment management services fees 26,047 2,291 -- 28,338
Accrued distribution fees 12,026 688 -- 12,714
Accrued transfer agency fees -- 913 -- 913
Accrued administrative services fees -- 199 -- 199
Other accrued expenses 86,208 158,240 -- 244,448
------------------------------------------------------------------------------------------------------------------------
Total liabilities 1,757,607 23,569,249 -- 25,326,856
------------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $34,912,793 $ 90,489,404 $ -- $125,402,197
------------------------------------------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.10 par value for Seligman Frontier
Fund and $.01 par value for RiverSource Partners
Small Cap Growth Fund (Note 3) $ 512,830 $ 362,738 $ 908,601 $ 1,784,169
Additional paid-in capital (Note 3) 52,196,530 148,046,705 (908,601) 199,334,634
Excess of distributions over net investment income (135,620) (1,366,219) -- (1,501,839)
Accumulated net realized gain (loss) (7,909,880) (51,199,350) -- (59,109,230)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in
foreign currencies (9,751,067) (5,354,470) -- (15,105,537)
------------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding capital stock $34,912,793 $ 90,489,404 $ -- $125,402,197
------------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding
shares: Class A $22,714,406 $ 42,064,151 $ -- $ 64,778,557
Class B $ 1,070,448 $ 12,679,722 $ -- $ 13,750,170
Class C $ 8,813,952 $ 1,794,774 $ -- $ 10,608,726
Class I $ -- $ 33,883,266 $ -- $ 33,883,266
Class R2 $ 95,582 $ 2,392 $ -- $ 97,974
Class R3 $ -- $ 2,407 $ -- $ 2,407
Class R4 $ -- $ 60,268 $ -- $ 60,268
Class R5 $ 2,218,405 $ 2,424 $ -- $ 2,220,829
Shares outstanding
(Note 3): Class A shares 3,139,517 16,861,130 (11,051,164) 8,949,483
Class B shares 183,295 5,501,048 (3,329,863) 2,354,480
Class C shares 1,502,805 778,037 (472,283) 1,808,559
Class I shares -- 13,107,050 (8,689,414) 4,417,636
Class R2 shares 13,419 951 (615) 13,755
Class R3 shares -- 951 (613) 338
Class R4 shares -- 23,727 (15,869) 7,858
Class R5 shares 289,267 951 (635) 289,583
Net asset value per share of outstanding capital
stock: Class A $ 7.24 $ 2.49 $ -- $ 7.24
Class B $ 5.84 $ 2.30 $ -- $ 5.84
Class C $ 5.87 $ 2.31 $ -- $ 5.87
Class I $ -- $ 2.59 $ -- $ 7.67
Class R2 $ 7.12 $ 2.52 $ -- $ 7.12
Class R3 $ -- $ 2.53 $ -- $ 7.12
Class R4 $ -- $ 2.54 $ -- $ 7.67
Class R5 $ 7.67 $ 2.55 $ -- $ 7.67
------------------------------------------------------------------------------------------------------------------------
* Including securities on loan, at value $ -- $ 21,090,673 $ -- $ 21,090,673
------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
54
SELIGMAN FRONTIER FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
<Table>
<Caption>
RIVERSOURCE SELIGMAN SELIGMAN
PARTNERS FRONTIER FUND FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA PRO FORMA
FRONTIER FUND GROWTH FUND ADJUSTMENTS COMBINED
YEAR ENDED APRIL 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
INVESTMENT INCOME
Income:
Dividends $ 621,788 $ 595,413 $ -- $ 1,217,201
Interest 19,421 -- -- 19,421
Income distributions from affiliated money market
fund -- 50,127 -- 50,127
Fee income from securities lending -- net -- 113,693 -- 113,693
Less foreign taxes withheld -- (4,074) -- (4,074)
------------------------------------------------------------------------------------------------------------------
Total income 641,209 755,159 -- 1,396,368
------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees (Note 2) 425,951 1,153,254 (76,910)(a) 1,502,295
Distribution fees
Class A 69,344 150,867 -- 220,211
Class B 15,513 191,259 -- 206,772
Class C 109,567 24,534 -- 134,101
Class R2 456 15 -- 471
Class R3 -- 8 -- 8
Transfer agency fees (Note 2)
Class A 166,868 273,561 (18,290)(b) 422,139
Class B 9,003 90,599 3,967(b) 103,569
Class C 62,503 11,433 (13,077)(b) 60,859
Class R2 547 1 (501)(b) 47
Class R3 -- 1 -- 1
Class R4 -- 47 -- 47
Class R5 4,143 2 (2,372)(b) 1,773
Administrative services fees (Note 2) -- 100,211 35,590(c) 135,801
Plan administration services fees (Note 2)
Class R2 -- 8 228(d) 236
Class R3 -- 8 -- 8
Class R4 -- 233 -- 233
Compensation of board members 4,476 3,372 -- 7,848
Custodian fees 34,361 228,548 -- 262,909
Printing and postage 30,577 58,235 -- 88,812
Registration fees (Note 2) 80,650 52,225 (26,113)(e) 106,762
Professional fees (Note 2) 62,913 30,172 (27,665)(f) 65,420
Other 8,983 22,517 -- 31,500
------------------------------------------------------------------------------------------------------------------
Total expenses 1,085,855 2,391,110 (125,143) 3,351,822
Expenses waived/reimbursed by RiverSource
Investments, LLC (Note 2) (122,189) (444,571) (170,635)(g) (737,395)
Earnings and bank fee credits on cash balances
(Note 2) -- (35) 35(h) --
------------------------------------------------------------------------------------------------------------------
Total net expenses 963,666 1,946,504 (295,743) 2,614,427
------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net (322,457) (1,191,345) 295,743 (1,218,059)
------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on security transactions (6,502,505) (43,148,184) -- (49,650,689)
Net increase from payment by affiliate 94,888 -- -- 94,888
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies (11,730,360) (20,158,360) -- (31,888,720)
------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments and foreign
currencies (18,137,977) (63,306,544) -- (81,444,521)
------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $(18,460,434) $(64,497,889) $ 295,743 $(82,662,580)
------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
55
SELIGMAN FRONTIER FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (SELLING FUND)
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited as to April 30, 2009)
1. BASIS OF COMBINATION
The unaudited pro forma combining statement of assets and liabilities and the
statement of operations reflect the accounts of the two funds at, and for, the
12-month period ending April 30, 2009. These statements have been derived from
financial statements prepared for the Seligman Frontier Fund and the RiverSource
Partners Small Cap Growth Fund as of April 30, 2009.
Each Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The primary investments
of each Fund are as follows:
Seligman Frontier Fund invests 65% of its net assets in equity securities of
small U.S. companies.
RiverSource Partners Small Cap Growth Fund invests primarily in equity
securities of companies with market capitalization, at the time of investment,
of up to $2 billion, or that fall within the range of the Russell 2000 Growth
Index.
The pro forma statements give effect to the proposed transfer of the assets and
liabilities of RiverSource Partners Small Cap Growth Fund in exchange for Class
A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5 shares
of Seligman Frontier Fund under U.S. generally accepted accounting principles.
The pro forma statements reflect estimates for the combined Seligman Frontier
Fund based on the increased asset level of the Reorganization and associated
economies of scale, adjusted to reflect current fees.
The pro forma combining statements should be read in conjunction with the
historical financial statements of the funds incorporated by reference in the
Statement of Additional Information.
The pro forma statement of operations give effect to the proposed transaction on
the historical operations of the accounting survivor, Seligman Frontier Fund, as
if the transaction had occurred at the beginning of the year presented.
2. PRO FORMA ADJUSTMENTS
(a) To reflect the change in investment management services fees due to the
Reorganization.
(b) To reflect the change in transfer agent fees due to the Reorganization
including adjusting for closed account fees for each RiverSource Partners
Small Cap Growth Fund shareholder account that will be closed on the system
as a result of the Reorganization.
(c) To reflect the change in administrative services fees due to the
Reorganization.
(d) To reflect the change in plan administration services fees due to the
Reorganization.
(e) To reflect the reduction in registration fees due to the Reorganization.
(f) To reflect the reduction in audit fees due to the Reorganization.
(g) To adjust the expense reimbursement to reflect the net reduction in fees
resulting from the Reorganization per the agreement (through Dec. 31, 2010)
by RiverSource Investments, LLC and its affiliates to waive certain fees and
absorb certain expenses of the combined fund.
(h) To reflect the elimination of the earnings and bank fee credits on cash
balances.
56
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional Class
A, Class B, Class C, Class I, Class R2, Class R3, Class R4 and Class R5 shares
of Seligman Frontier Fund at April 30, 2009, in connection with the
Reorganization. The following table reflects the number of Seligman Frontier
Fund shares assumed to be issued to the shareholders of the RiverSource Partners
Small Cap Growth Fund.
<Table>
<Caption>
RIVERSOURCE PARTNERS
SMALL CAP GROWTH FUND SELIGMAN FRONTIER FUND TOTAL PRO FORMA
SHARES ISSUED SHARES OUTSTANDING SHARES OUTSTANDING
----------------------------------------------------------------------------------------------------------------------
Class A 5,809,966 3,139,517 8,949,483
----------------------------------------------------------------------------------------------------------------------
Class B 2,171,185 183,295 2,354,480
----------------------------------------------------------------------------------------------------------------------
Class C 305,754 1,502,805 1,808,559
----------------------------------------------------------------------------------------------------------------------
Class I* 4,417,636 N/A 4,417,636
----------------------------------------------------------------------------------------------------------------------
Class R2 336 13,419 13,755
----------------------------------------------------------------------------------------------------------------------
Class R3* 338 N/A 338
----------------------------------------------------------------------------------------------------------------------
Class R4* 7,858 N/A 7,858
----------------------------------------------------------------------------------------------------------------------
Class R5 316 289,267 289,583
----------------------------------------------------------------------------------------------------------------------
</Table>
* The inception date for the Seligman Frontier Fund Class I, Class R3 and
Class R4 shares was Aug. 3, 2009.
57
COMBINED PORTFOLIO OF INVESTMENTS
Seligman Frontier Fund
APRIL 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (97.6%)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
AEROSPACE & DEFENSE (3.1%)
AAR -- 19,200(d) 19,200(b) $ -- $ 289,344 $ 289,344
AeroVironment 15,900 -- 15,900(b) 376,194 -- 376,194
American Science &
Engineering -- 5,561 5,561 -- 335,106 335,106
Applied Signal
Technology -- 32,673 32,673 -- 645,618 645,618
BE Aerospace 19,100 -- 19,100(b) 206,089 -- 206,089
Ducommun 21,800 -- 21,800 377,576 -- 377,576
DynCorp Intl Cl A -- 23,489(d) 23,489(b) -- 358,207 358,207
Orbital Sciences 11,300 -- 11,300(b) 174,698 -- 174,698
Stanley 11,000 21,420 32,420(b) 283,580 552,208 835,788
Triumph Group -- 7,872 7,872 -- 325,350 325,350
---------------------------------------------------
Total 1,418,137 2,505,833 3,923,970
---------------------------------------------------
AIR FREIGHT & LOGISTICS (0.4%)
Hub Group Cl A -- 22,700 22,700(b) -- 522,100 522,100
---------------------------------------------------
AIRLINES (0.4%)
Allegiant Travel -- 5,983(d) 5,983(b) -- 311,355 311,355
Copa Holdings Cl A -- 3,010 3,010(c) -- 92,257 92,257
UAL -- 17,040 17,040(b) -- 83,837 83,837
---------------------------------------------------
Total -- 487,449 487,449
---------------------------------------------------
AUTO COMPONENTS (0.4%)
Amerigon Cl A 39,500 -- 39,500(b) 223,175 -- 223,175
Wonder Auto
Technology -- 47,131(d) 47,131(b,c) -- 317,192 317,192
---------------------------------------------------
Total 223,175 317,192 540,367
---------------------------------------------------
BIOTECHNOLOGY (4.3%)
Acorda Therapeutics -- 14,710 14,710(b) -- 291,699 291,699
Alexion
Pharmaceuticals 6,800 9,110(d) 15,910(b) 227,256 304,456 531,712
Alkermes -- 14,400 14,400(b) -- 110,160 110,160
Allos Therapeutics -- 20,700 20,700(b) -- 126,891 126,891
Array BioPharma -- 23,700(d) 23,700(b) -- 69,441 69,441
BioMarin
Pharmaceutical 28,900 -- 28,900(b) 371,654 -- 371,654
Celera 84,900 -- 84,900(b) 686,841 -- 686,841
Cougar
Biotechnology -- 8,470 8,470(b) -- 295,772 295,772
Cubist
Pharmaceuticals 9,900 -- 9,900(b) 164,340 -- 164,340
Emergent
BioSolutions -- 7,273(d) 7,273(b) -- 77,894 77,894
Facet Biotechnology
Corp 18,220 -- 18,220(b) 170,357 -- 170,357
Genomic Health -- 11,000 11,000(b) -- 247,500 247,500
GTx -- 3,538(d) 3,538(b) -- 34,779 34,779
Halozyme
Therapeutics -- 27,600 27,600(b) -- 174,432 174,432
Human Genome
Sciences 63,000 -- 63,000(b) 137,970 -- 137,970
Idera
Pharmaceuticals -- 1,818 1,818(b) -- 10,926 10,926
InterMune -- 10,815 10,815(b) -- 146,435 146,435
Isis
Pharmaceuticals -- 12,100 12,100(b) -- 189,728 189,728
Maxygen -- 9,550 9,550(b) -- 55,868 55,868
Myriad Genetics -- 7,640 7,640(b) -- 296,356 296,356
Onyx
Pharmaceuticals 9,900 10,720 20,620(b) 256,410 277,648 534,058
OSI Pharmaceuticals -- 6,370(d) 6,370(b) -- 213,841 213,841
Osiris Therapeutics -- 2,700 2,700(b) -- 34,209 34,209
</Table>
58
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
BIOTECHNOLOGY (CONT.)
Regeneron
Pharmaceuticals -- 11,100 11,100(b) $ -- $ 147,186 $ 147,186
Seattle Genetics -- 19,400(d) 19,400(b) -- 179,062 179,062
United Therapeutics -- 2,430(d) 2,430(b) -- 152,628 152,628
---------------------------------------------------
Total 2,014,828 3,436,911 5,451,739
---------------------------------------------------
BUILDING PRODUCTS (0.1%)
Aaon -- 2,248 2,248 -- 43,791 43,791
Ameron Intl -- 2,270 2,270 -- 134,316 134,316
---------------------------------------------------
Total -- 178,107 178,107
---------------------------------------------------
CAPITAL MARKETS (0.7%)
Eaton Vance -- 4,540 4,540 -- 124,260 124,260
Greenhill & Co -- 2,570(d) 2,570 -- 199,252 199,252
Knight Capital
Group Cl A -- 12,979 12,979(b) -- 201,045 201,045
Stifel Financial -- 4,290(d) 4,290(b) -- 211,196 211,196
Thomas Weisel
Partners Group 32,300 -- 32,300(b) 145,996 -- 145,996
---------------------------------------------------
Total 145,996 735,753 881,749
---------------------------------------------------
CHEMICALS (0.3%)
Ashland -- 7,770(d) 7,770 -- 170,629 170,629
Scotts Miracle-Gro
Cl A -- 7,000(d) 7,000 -- 236,390 236,390
---------------------------------------------------
Total -- 407,019 407,019
---------------------------------------------------
COMMERCIAL BANKS (0.4%)
Bank of the Ozarks -- 12,049(d) 12,049 -- 299,177 299,177
Signature Bank 6,500 -- 6,500(b) 176,735 -- 176,735
---------------------------------------------------
Total 176,735 299,177 475,912
---------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (2.6%)
Clean Harbors 5,300 6,700 12,000(b) 265,530 335,671 601,201
Corrections
Corporation of
America 41,844 -- 41,844(b) 591,256 -- 591,256
EnergySolutions -- 29,500 29,500 -- 286,150 286,150
GEO Group 35,400 14,015 49,415(b) 588,702 233,069 821,771
GeoEye -- 6,700(d) 6,700(b) -- 166,763 166,763
Healthcare Services
Group -- 15,613 15,613 -- 279,160 279,160
Innerworkings -- 20,900(d) 20,900(b) -- 105,545 105,545
Mobile Mini -- 11,410(d) 11,410(b) -- 156,317 156,317
Tetra Tech -- 7,288 7,288(b) -- 178,993 178,993
---------------------------------------------------
Total 1,445,488 1,741,668 3,187,156
---------------------------------------------------
COMMUNICATIONS EQUIPMENT (3.5%)
Acme Packet -- 27,470 27,470(b) -- 211,794 211,794
ADC
Telecommunications 24,000 -- 24,000(b) 176,640 -- 176,640
Anaren -- 5,033 5,033(b) -- 65,479 65,479
Avocent -- 28,166 28,166(b) -- 406,717 406,717
BigBand Networks -- 47,719 47,719(b) -- 279,633 279,633
Blue Coat Systems -- 18,200 18,200(b) -- 241,332 241,332
Ceragon Networks -- 28,100(d) 28,100(b,c) -- 143,310 143,310
CommScope 15,400 -- 15,400(b) 386,540 -- 386,540
Comtech
Telecommunications -- 10,000 10,000(b) -- 334,700 334,700
DG FastChannel -- 11,843 11,843(b) -- 276,297 276,297
F5 Networks 8,700 25,090(d) 33,790(b) 237,249 684,205 921,454
Ixia 41,900 -- 41,900(b) 241,344 -- 241,344
NICE Systems ADR 8,300 -- 8,300(b) 212,563 -- 212,563
Palm -- 20,880(d) 20,880(b) -- 219,031 219,031
Riverbed Technology -- 6,330(d) 6,330(b) -- 115,966 115,966
</Table>
59
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
COMMUNICATIONS EQUIPMENT (CONT.)
Starent Networks -- 7,176 7,176(b) $ -- $ 141,582 $ 141,582
ViaSat -- 3,297 3,297(b) -- 75,798 75,798
---------------------------------------------------
Total 1,254,336 3,195,844 4,450,180
---------------------------------------------------
COMPUTERS & PERIPHERALS (1.3%)
3PAR -- 11,820 11,820(b) -- 90,541 90,541
Compellent
Technologies -- 30,885(d) 30,885(b) -- 344,677 344,677
Data Domain -- 21,068(d) 21,068(b) -- 349,307 349,307
Electronics for
Imaging 8,900 -- 8,900(b) 87,398 -- 87,398
Presstek -- 49,269 49,269(b) -- 95,089 95,089
STEC -- 3,045 3,045(b) -- 29,232 29,232
Synaptics -- 18,641(d) 18,641(b) -- 605,460 605,460
---------------------------------------------------
Total 87,398 1,514,306 1,601,704
---------------------------------------------------
CONSTRUCTION & ENGINEERING (1.5%)
EMCOR Group -- 22,700 22,700(b) -- 471,933 471,933
Foster Wheeler 8,200 -- 8,200(b) 176,546 -- 176,546
Layne Christensen -- 8,170 8,170(b) -- 176,962 176,962
MasTec 17,500 -- 17,500(b) 218,925 -- 218,925
Michael Baker -- 1,034 1,034(b) -- 34,742 34,742
Orion Marine Group -- 5,366 5,366(b) -- 80,383 80,383
Pike Electric -- 23,850 23,850(b) -- 247,563 247,563
Quanta Services 6,900 -- 6,900(b) 156,837 -- 156,837
Shaw Group 7,800 -- 7,800(b) 261,534 -- 261,534
---------------------------------------------------
Total 813,842 1,011,583 1,825,425
---------------------------------------------------
CONSTRUCTION
MATERIALS ( -- %)
Headwaters -- 20,362 20,362(b) -- 51,312 51,312
---------------------------------------------------
CONSUMER FINANCE (0.5%)
EZCORP Cl A -- 21,811 21,811(b) -- 270,239 270,239
First Cash
Financial Services -- 11,034 11,034(b) -- 181,399 181,399
World Acceptance -- 6,696(d) 6,696(b) -- 198,737 198,737
---------------------------------------------------
Total -- 650,375 650,375
---------------------------------------------------
CONTAINERS & PACKAGING (0.8%)
Bway Holding -- 32,845 32,845(b) -- 306,115 306,115
Greif Cl A -- 4,550(d) 4,550 -- 205,979 205,979
Rock-Tenn Cl A -- 12,752 12,752 -- 481,515 481,515
---------------------------------------------------
Total -- 993,609 993,609
---------------------------------------------------
DISTRIBUTORS (0.5%)
LKQ -- 40,400(d) 40,400(b) -- 685,992 685,992
---------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (2.2%)
American Public
Education 12,100 11,691 23,791(b) 435,600 420,876 856,476
Capella Education -- 8,994(d) 8,994(b) -- 462,112 462,112
Coinstar 400 -- 400(b) 14,236 -- 14,236
Corinthian Colleges 16,000 36,255(d) 52,255(b) 246,400 558,326 804,726
Hillenbrand -- 17,270 17,270 -- 313,969 313,969
K12 -- 11,833(d) 11,833(b) -- 208,024 208,024
Lincoln Educational
Services -- 4,481(d) 4,481(b) -- 74,340 74,340
---------------------------------------------------
Total 696,236 2,037,647 2,733,883
---------------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (0.4%)
Life Partners
Holdings -- 14,958(d) 14,958 -- 280,014 280,014
Portfolio Recovery
Associates -- 7,754(d) 7,754(b) -- 271,157 271,157
---------------------------------------------------
Total -- 551,171 551,171
---------------------------------------------------
</Table>
60
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
DIVERSIFIED TELECOMMUNICATION SERVICES (1.0%)
Cincinnati Bell -- 36,570 36,570(b) $ -- $ 102,030 $ 102,030
Cogent
Communications
Group -- 6,918 6,918(b) -- 58,388 58,388
Neutral Tandem -- 26,925 26,925(b) -- 770,055 770,055
NTELOS Holdings -- 17,560 17,560 -- 280,609 280,609
Premiere Global
Services -- 5,730 5,730(b) -- 60,394 60,394
---------------------------------------------------
Total -- 1,271,476 1,271,476
---------------------------------------------------
ELECTRIC UTILITIES (0.4%)
ITC Holdings 6,500 4,510 11,010 282,945 196,320 479,265
---------------------------------------------------
ELECTRICAL EQUIPMENT (1.6%)
American
Superconductor -- 12,560(d) 12,560(b) -- 322,792 322,792
AMETEK 5,100 -- 5,100 164,271 -- 164,271
A-Power Energy
Generation Systems -- 18,504(d) 18,504(b,c) -- 152,658 152,658
Energy Conversion
Devices -- 6,200(d) 6,200(b) -- 113,956 113,956
EnerSys -- 34,293 34,293(b) -- 584,695 584,695
FuelCell Energy -- 57,952 57,952(b) -- 184,287 184,287
Powell Inds -- 10,533 10,533(b) -- 379,083 379,083
Yingli Green Energy
Holding ADR -- 12,220(d) 12,220(b,c) -- 85,296 85,296
---------------------------------------------------
Total 164,271 1,822,767 1,987,038
---------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (1.5%)
Cogent -- 6,600(d) 6,600(b) -- 74,844 74,844
Daktronics -- 14,081(d) 14,081 -- 127,292 127,292
FLIR Systems 11,300 -- 11,300(b) 250,634 -- 250,634
Itron 3,504 -- 3,504(b) 161,184 -- 161,184
LeCroy -- 35,018 35,018(b) -- 113,809 113,809
L-1 Identity
Solutions 40,700 -- 40,700(b) 297,924 -- 297,924
Multi-Fineline
Electronix -- 16,409 16,409(b) -- 329,328 329,328
OSI Systems -- 4,908 4,908(b) -- 92,025 92,025
Plexus -- 11,830 11,830(b) -- 262,035 262,035
Tech Data -- 4,900 4,900(b) -- 141,071 141,071
---------------------------------------------------
Total 709,742 1,140,404 1,850,146
---------------------------------------------------
ENERGY EQUIPMENT & SERVICES (1.4%)
CARBO Ceramics -- 1,487(d) 1,487 -- 45,666 45,666
Core Laboratories -- 5,870(d) 5,870(c) -- 488,560 488,560
Dril-Quip 7,400 6,200 13,600(b) 254,412 213,156 467,568
Hornbeck Offshore
Services 7,800 -- 7,800(b) 181,194 -- 181,194
Key Energy Services -- 19,090 19,090(b) -- 84,378 84,378
Oceaneering Intl 4,600 -- 4,600(b) 209,622 -- 209,622
T-3 Energy Services 15,500 4,600 20,100(b) 208,165 61,778 269,943
---------------------------------------------------
Total 853,393 893,538 1,746,931
---------------------------------------------------
FOOD & STAPLES RETAILING (0.4%)
Casey's General
Stores -- 11,739 11,739 -- 312,375 312,375
United Natural
Foods -- 8,131(d) 8,131(b) -- 185,224 185,224
---------------------------------------------------
Total -- 497,599 497,599
---------------------------------------------------
FOOD PRODUCTS (1.4%)
Calavo Growers -- 15,383(d) 15,383 -- 218,592 218,592
Darling Intl -- 28,844 28,844(b) -- 164,988 164,988
Diamond Foods -- 12,215(d) 12,215 -- 319,911 319,911
Green Mountain
Coffee Roasters -- 11,084(d) 11,084(b) -- 801,484 801,484
Ralcorp Holdings 3,900 -- 3,900(b) 222,924 -- 222,924
Sanderson Farms -- 411 411 -- 16,399 16,399
---------------------------------------------------
Total 222,924 1,521,374 1,744,298
---------------------------------------------------
</Table>
61
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
HEALTH CARE EQUIPMENT & SUPPLIES (6.2%)
American Medical
Systems Holdings 19,300 22,138 41,438(b) $ 238,741 $ 273,847 $ 512,588
Cantel Medical -- 3,553(d) 3,553(b) -- 50,204 50,204
Cooper Companies -- 5,270(d) 5,270 -- 151,513 151,513
CryoLife -- 16,455 16,455(b) -- 89,351 89,351
Cyberonics -- 38,869 38,869(b) -- 514,626 514,626
EV3 31,400 -- 31,400(b) 262,504 -- 262,504
Greatbatch -- 11,303(d) 11,303(b) -- 237,815 237,815
Haemonetics -- 12,620 12,620(b) -- 651,571 651,571
Hansen Medical -- 13,000 13,000(b) -- 69,810 69,810
Immucor -- 8,810 8,810(b) -- 143,515 143,515
Integra
LifeSciences
Holdings 10,367 12,000(d) 22,367(b) 267,676 309,840 577,516
Kensey Nash -- 6,991 6,991(b) -- 146,392 146,392
Masimo -- 2,330(d) 2,330(b) -- 67,337 67,337
Natus Medical -- 8,600 8,600(b) -- 75,508 75,508
Neogen -- 12,475(d) 12,475(b) -- 282,808 282,808
NuVasive -- 11,201(d) 11,201(b) -- 424,518 424,518
Orthovita -- 12,676 12,676(b) -- 37,267 37,267
ResMed -- 7,200(d) 7,200(b) -- 276,840 276,840
Somanetics -- 12,367 12,367(b) -- 200,469 200,469
STERIS -- 11,000 11,000 -- 265,100 265,100
Thoratec -- 37,813(d) 37,813(b) -- 1,098,845 1,098,845
TomoTherapy 73,200 -- 73,200(b) 188,856 -- 188,856
Vnus Medical
Technologies -- 6,035 6,035(b) -- 133,675 133,675
Volcano -- 27,359 27,359(b) -- 360,865 360,865
West Pharmaceutical
Services -- 8,570(d) 8,570 -- 279,811 279,811
Wright Medical
Group 20,700 30,183 50,883(b) 284,625 415,016 699,641
---------------------------------------------------
Total 1,242,402 6,556,543 7,798,945
---------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (6.9%)
Alliance HealthCare
Services 33,500 24,533(d) 58,033(b) 263,645 193,075 456,720
Almost Family -- 4,002(d) 4,002(b) -- 98,849 98,849
Amedisys 7,400 10,006(d) 17,406(b) 248,196 335,601 583,797
AMERIGROUP -- 9,230(d) 9,230(b) -- 275,700 275,700
AmSurg 13,300 -- 13,300(b) 273,182 -- 273,182
BioScrip -- 85,665 85,665(b) -- 272,415 272,415
CardioNet -- 2,280(d) 2,280(b) -- 47,310 47,310
Chemed 7,700 7,814 15,514 325,941 330,767 656,708
Emergency Medical
Services Cl A -- 18,292 18,292(b) -- 637,294 637,294
Five Star Quality
Care 121,900 -- 121,900(b) 225,615 -- 225,615
Genoptix -- 9,499 9,499(b) -- 276,231 276,231
Gentiva Health
Services 39,200 20,020 59,220(b) 624,456 318,919 943,375
HealthSouth -- 24,044(d) 24,044(b) -- 225,292 225,292
HMS Holdings -- 20,578(d) 20,578(b) -- 616,928 616,928
LHC Group -- 24,437 24,437(b) -- 557,652 557,652
MEDNAX 14,998 4,800 19,798(b) 538,428 172,320 710,748
Owens & Minor -- 4,840 4,840 -- 167,851 167,851
PSS World Medical -- 7,702(d) 7,702(b) -- 111,833 111,833
Psychiatric
Solutions -- 15,910(d) 15,910(b) -- 308,495 308,495
RehabCare Group -- 18,720 18,720(b) -- 312,624 312,624
Skilled Healthcare
Group Cl A 37,948 -- 37,948(b) 331,286 -- 331,286
Sun Healthcare
Group -- 38,309 38,309(b) -- 324,477 324,477
VCA Antech -- 8,800(d) 8,800(b) -- 220,176 220,176
---------------------------------------------------
Total 2,830,749 5,803,809 8,634,558
---------------------------------------------------
</Table>
62
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
HEALTH CARE TECHNOLOGY (1.6%)
Computer Programs &
Systems -- 14,811(d) 14,811 $ -- $ 518,237 $ 518,237
MedAssets -- 30,490 30,490(b) -- 525,647 525,647
Omnicell -- 15,000 15,000(b) -- 132,000 132,000
Phase Forward -- 26,600 26,600(b) -- 379,316 379,316
Quality Systems -- 1,490(d) 1,490 -- 79,894 79,894
SXC Health
Solutions -- 4,930 4,930(b,c) -- 98,748 98,748
Transcend Services -- 24,915 24,915(b) -- 289,014 289,014
---------------------------------------------------
Total -- 2,022,856 2,022,856
---------------------------------------------------
HOTELS, RESTAURANTS & LEISURE (5.5%)
Bally Technologies 27,500 -- 27,500(b) 719,950 -- 719,950
BJ's Restaurants -- 4,944(d) 4,944(b) -- 81,527 81,527
Buffalo Wild Wings 4,100 7,645(d) 11,745(b) 160,064 298,461 458,525
California Pizza
Kitchen -- 14,026(d) 14,026(b) -- 220,348 220,348
Carrols Restaurant
Group -- 1,815 1,815(b) -- 10,745 10,745
CEC Entertainment -- 8,923 8,923(b) -- 271,795 271,795
CKE Restuarants -- 56,465 56,465 -- 540,370 540,370
Cracker Barrel Old
Country Store -- 9,608(d) 9,608 -- 313,317 313,317
Dominos Pizza 22,000 -- 22,000(b) 207,680 -- 207,680
Einstein Noah
Restaurant Group 17,300 -- 17,300(b) 186,667 -- 186,667
Jack in the Box -- 20,383(d) 20,383(b) -- 501,218 501,218
Life Time Fitness -- 10,140 10,140(b) -- 190,226 190,226
Morgans Hotel Group 58,067 -- 58,067(b) 249,107 -- 249,107
Orient-Express
Hotels Series A -- 13,480 13,480(c) -- 87,216 87,216
Panera Bread Cl A -- 6,000(d) 6,000(b) -- 336,060 336,060
Scientific Games Cl
A -- 14,210 14,210(b) -- 248,533 248,533
Texas Roadhouse 15,754 91,481 107,235(b) 179,281 1,041,053 1,220,334
Wendy's/Arby's
Group Cl A 51,800 39,200 91,000 259,000 196,000 455,000
WMS Inds 8,000 11,475(d) 19,475(b) 256,880 368,462 625,342
---------------------------------------------------
Total 2,218,629 4,705,331 6,923,960
---------------------------------------------------
HOUSEHOLD DURABLES (0.5%)
Centex -- 10,940 10,940 -- 119,684 119,684
DR Horton -- 7,160 7,160 -- 93,438 93,438
Helen of Troy -- 15,163 15,163(b,c) -- 241,849 241,849
Ryland Group -- 6,870(d) 6,870 -- 142,278 142,278
---------------------------------------------------
Total -- 597,249 597,249
---------------------------------------------------
INSURANCE (1.2%)
AmTrust Financial
Services -- 13,648 13,648 -- 124,606 124,606
Argo Group Intl
Holdings -- 6,634 6,634(b,c) -- 185,685 185,685
Aspen Insurance
Holdings 14,200 -- 14,200 334,836 -- 334,836
First American
Financial 9,000 -- 9,000 252,720 -- 252,720
First Mercury
Financial -- 11,776(d) 11,776(b) -- 155,679 155,679
Navigators Group 3,800 -- 3,800(b) 172,444 -- 172,444
PMA Capital Cl A -- 34,258 34,258(b) -- 128,468 128,468
ProAssurance -- 3,090 3,090(b) -- 135,775 135,775
---------------------------------------------------
Total 760,000 730,213 1,490,213
---------------------------------------------------
INTERNET & CATALOG RETAIL (0.2%)
PetMed Express -- 18,678(d) 18,678 -- 303,704 303,704
---------------------------------------------------
</Table>
63
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
INTERNET SOFTWARE & SERVICES (3.4%)
Art Technology
Group 141,100 10,430 151,530(b) $ 443,054 $ 32,750 $ 475,804
comScore -- 11,500(d) 11,500(b) -- 146,740 146,740
Digital River -- 2,710 2,710(b) -- 104,118 104,118
Equinix 4,600 -- 4,600(b) 323,058 -- 323,058
GSI Commerce -- 9,020(d) 9,020(b) -- 128,174 128,174
j2 Global
Communications -- 11,131 11,131(b) -- 267,033 267,033
MercadoLibre -- 7,510(d) 7,510(b,c) -- 205,248 205,248
NIC -- 51,245 51,245 -- 276,723 276,723
Omniture 32,000 17,450(d) 49,450(b) 394,240 214,984 609,224
S1 -- 45,943 45,943(b) -- 284,847 284,847
SkillSoft ADR -- 41,686(d) 41,686(b,c) -- 350,996 350,996
Valueclick 24,000 -- 24,000(b) 254,400 -- 254,400
VistaPrint 10,051 7,900(d) 17,951(b,c) 345,252 271,365 616,617
Vocus -- 11,050 11,050(b) -- 187,850 187,850
---------------------------------------------------
Total 1,760,004 2,470,828 4,230,832
---------------------------------------------------
IT SERVICES (2.5%)
CACI Intl Cl A -- 4,354 4,354(b) -- 172,201 172,201
CSG Systems Intl -- 21,163 21,163(b) -- 306,864 306,864
CyberSource -- 28,063(d) 28,063(b) -- 410,000 410,000
iGATE -- 28,010 28,010 -- 106,158 106,158
Information
Services Group 69,600 -- 69,600(b) 206,016 -- 206,016
Lender Processing
Services 12,300 -- 12,300(b) 352,518 -- 352,518
ManTech Intl Cl A -- 7,447 7,447(b) -- 269,507 269,507
NCI Cl A -- 8,200(d) 8,200(b) -- 199,752 199,752
NeuStar Cl A -- 9,800 9,800(b) -- 186,298 186,298
RightNow
Technologies -- 26,160 26,160(b) -- 197,508 197,508
Syntel -- 11,909(d) 11,909 -- 330,117 330,117
TeleTech Holdings 31,700 -- 31,700(b) 420,659 -- 420,659
---------------------------------------------------
Total 979,193 2,178,405 3,157,598
---------------------------------------------------
LEISURE EQUIPMENT & PRODUCTS (0.1%)
Sport Supply Group -- 5,975 5,975 -- 35,970 35,970
Sturm, Ruger & Co -- 4,495 4,495(b) -- 55,333 55,333
---------------------------------------------------
Total -- 91,303 91,303
---------------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (2.1%)
Bruker -- 33,848 33,848(b) -- 222,720 222,720
ICON ADR -- 13,300 13,300(b,c) -- 210,672 210,672
Illumina -- 15,049 15,049(b) -- 562,080 562,080
Kendle Intl -- 9,120(d) 9,120(b) -- 81,168 81,168
Luminex -- 15,027 15,027(b) -- 246,593 246,593
Medivation -- 6,800(d) 6,800(b) -- 131,444 131,444
Nektar Therapeutics -- 22,400 22,400(b) -- 125,440 125,440
PAREXEL Intl 38,100 32,323 70,423(b) 377,571 320,321 697,892
PerkinElmer 21,800 -- 21,800 284,115 -- 284,115
---------------------------------------------------
Total 661,686 1,900,438 2,562,124
---------------------------------------------------
MACHINERY (2.0%)
American Railcar
Inds -- 8,011 8,011 -- 73,060 73,060
Badger Meter -- 2,303 2,303 -- 89,725 89,725
Barnes Group 24,900 -- 24,900 352,584 -- 352,584
Bucyrus Intl -- 8,620(d) 8,620 -- 187,140 187,140
CIRCOR Intl -- 7,689 7,689 -- 197,838 197,838
Colfax -- 5,000 5,000(b) -- 43,150 43,150
ESCO Technologies -- 19,210 19,210(b) -- 798,751 798,751
Force Protection 11,400 21,956 33,356(b) 86,868 167,305 254,173
</Table>
64
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
MACHINERY (CONT.)
FreightCar America -- 9,211 9,211 $ -- $ 177,128 $ 177,128
Kaydon -- 6,656 6,656 -- 212,726 212,726
Titan Intl -- 21,900(d) 21,900 -- 132,495 132,495
---------------------------------------------------
Total 439,452 2,079,318 2,518,770
---------------------------------------------------
MEDIA (0.5%)
Dolan Media -- 2,786(d) 2,786(b) -- 33,181 33,181
Interactive Data -- 5,680 5,680 -- 127,686 127,686
Mediacom
Communications Cl A -- 1,473 1,473(b) -- 8,381 8,381
Natl CineMedia -- 23,100 23,100 -- 335,644 335,644
Outdoor Channel
Holdings -- 20,772 20,772(b) -- 155,375 155,375
---------------------------------------------------
Total -- 660,267 660,267
---------------------------------------------------
METALS & MINING (0.9%)
Compass Minerals
Intl -- 2,550 2,550 -- 122,961 122,961
Schnitzer Steel
Inds Cl A 5,500 3,160 8,660 272,580 156,610 429,190
Steel Dynamics -- 35,080(d) 35,080 -- 436,745 436,745
Thompson Creek
Metals -- 15,540 15,540(b,c) -- 104,740 104,740
---------------------------------------------------
Total 272,580 821,056 1,093,636
---------------------------------------------------
MULTILINE RETAIL (0.1%)
99 Cents Only
Stores -- 15,261 15,261(b) -- 163,903 163,903
---------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (2.6%)
Arena Resources -- 18,620(d) 18,620(b) -- 533,835 533,835
Approach Resources 25,500 -- 25,500(b) 181,050 -- 181,050
Bill Barrett -- 5,980 5,980(b) -- 155,360 155,360
Cabot Oil & Gas 8,700 -- 8,700 262,653 -- 262,653
Concho Resources -- 7,030 7,030(b) -- 192,763 192,763
GMX Resources -- 10,034(d) 10,034(b) -- 109,772 109,772
Goodrich Petroleum 8,800 4,960 13,760(b) 201,784 113,733 315,517
Massey Energy -- 7,960 7,960 -- 126,644 126,644
Petrohawk Energy -- 8,710 8,710(b) -- 205,556 205,556
Overseas
Shipholding Group 6,700 -- 6,700 192,357 -- 192,357
Teekay Shipping 12,500 -- 12,500 180,500 -- 180,500
Whiting Petroleum 9,300 14,000 23,300(b) 304,668 458,640 763,308
---------------------------------------------------
Total 1,323,012 1,896,303 3,219,315
---------------------------------------------------
PAPER & FOREST PRODUCTS (0.1%)
Domtar 74,600 -- 74,600(b) 135,772 -- 135,772
---------------------------------------------------
PERSONAL PRODUCTS (1.1%)
Alberto-Culver 13,000 -- 13,000 289,770 -- 289,770
Chattem 5,000 13,850(d) 18,850(b) 274,550 760,504 1,035,054
Nu Skin Enterprises
Cl A -- 5,698 5,698 -- 73,048 73,048
---------------------------------------------------
Total 564,320 833,552 1,397,872
---------------------------------------------------
PHARMACEUTICALS (2.0%)
Auxilium
Pharmaceuticals -- 14,370(d) 14,370(b) -- 329,072 329,072
Cypress Bioscience 14,400 -- 14,400(b) 103,680 -- 103,680
Endo
Pharmaceuticals
Holdings 11,600 -- 11,600(b) 191,864 -- 191,864
Matrixx Initiatives -- 17,678 17,678(b) -- 302,647 302,647
Medicines 24,700 -- 24,700(b) 246,506 -- 246,506
Medicis
Pharmaceutical Cl A -- 8,328 8,328 -- 133,831 133,831
Noven
Pharmaceuticals -- 25,324 25,324(b) -- 261,344 261,344
Par Pharmaceutical
Companies -- 14,357 14,357(b) -- 154,051 154,051
Perrigo -- 4,290(d) 4,290 -- 111,197 111,197
Questcor
Pharmaceuticals -- 50,438(d) 50,438(b) -- 226,971 226,971
</Table>
65
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
PHARMACEUTICALS (CONT.)
Sepracor 21,400 -- 21,400(b) $ 304,094 $ -- $ 304,094
XenoPort -- 6,370(d) 6,370(b) -- 87,078 87,078
---------------------------------------------------
Total 846,144 1,606,191 2,452,335
---------------------------------------------------
PROFESSIONAL SERVICES (2.2%)
FTI Consulting 22,600 -- 22,600(b) 1,240,288 -- 1,240,288
Huron Consulting
Group 21,650 -- 21,650(b) 1,038,118 -- 1,038,118
Kforce -- 18,210 18,210(b) -- 198,671 198,671
VSE -- 7,288(d) 7,288 -- 217,838 217,838
---------------------------------------------------
Total 2,278,406 416,509 2,694,915
---------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (1.2%)
BioMed Realty Trust -- 11,600 11,600 -- 132,356 132,356
Mack-Cali Realty 2,400 -- 2,400 64,464 -- 64,464
MFA Mtge
Investments 67,600 -- 67,600 398,164 -- 398,164
Redwood Trust 19,400 -- 19,400 315,638 -- 315,638
Tanger Factory
Outlet Centers -- 4,350(d) 4,350 -- 144,942 144,942
Ventas -- 15,700(d) 15,700 -- 449,648 449,648
---------------------------------------------------
Total 778,266 726,946 1,505,212
---------------------------------------------------
REAL ESTATE MANAGEMENT & DEVELOPMENT (0.1%)
E-House China
Holdings -- 8,430 8,430(b,c) -- 104,448 104,448
---------------------------------------------------
ROAD & RAIL (0.6%)
Genesee & Wyoming
Cl A -- 6,180 6,180(b) -- 185,400 185,400
Landstar System -- 14,300 14,300 -- 509,223 509,223
---------------------------------------------------
Total -- 694,623 694,623
---------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (5.5%)
Advanced Analogic
Technologies -- 31,597 31,597(b) -- 151,666 151,666
Amtech Systems -- 23,757 23,757(b) -- 99,542 99,542
Atheros
Communications 17,900 16,140(d) 34,040(b) 308,238 277,931 586,169
Cirrus Logic -- 33,762 33,762(b) -- 156,993 156,993
Cymer -- 5,130 5,130(b) -- 145,743 145,743
Diodes -- 11,950(d) 11,950(b) -- 177,816 177,816
Fairchild
Semiconductor Intl -- 38,610 38,610(b) -- 237,838 237,838
Hittite Microwave -- 11,500 11,500(b) -- 427,339 427,339
LSI 44,900 -- 44,900(b) 172,416 -- 172,416
Microsemi 58,522 23,800 82,322(b) 785,365 319,396 1,104,761
NetLogic
Microsystems -- 5,980 5,980(b) -- 194,888 194,888
Novellus Systems -- 15,660 15,660(b) -- 282,820 282,820
NVE -- 9,175 9,175(b) -- 349,017 349,017
ON Semiconductor 79,491 -- 79,491(b) 430,841 -- 430,841
PMC-Sierra -- 43,260 43,260(b) -- 342,619 342,619
Power Integrations -- 14,300(d) 14,300 -- 304,590 304,590
Semtech -- 14,360(d) 14,360(b) -- 207,071 207,071
Sigma Designs -- 5,529 5,529(b) -- 71,435 71,435
Teradyne -- 47,030 47,030(b) -- 279,358 279,358
Tessera
Technologies 36,100 3,278 39,378(b) 506,844 46,023 552,867
Ultratech -- 13,840 13,840(b) -- 187,117 187,117
Varian
Semiconductor
Equipment
Associates -- 10,500 10,500(b) -- 268,695 268,695
Verigy -- 19,240 19,240(b,c) -- 211,640 211,640
---------------------------------------------------
Total 2,203,704 4,739,537 6,943,241
---------------------------------------------------
</Table>
66
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
SOFTWARE (10.0%)
ACI Worldwide -- 17,234 17,234(b) $ -- $ 297,631 $ 297,631
Advent Software -- 10,020(d) 10,020(b) -- 333,065 333,065
ArcSight -- 44,430 44,430(b) -- 670,893 670,893
Ariba 24,200 17,650(d) 41,850(b) 232,562 169,617 402,179
AsiaInfo Holdings -- 51,158 51,158(b,c) -- 856,896 856,896
Blackboard -- 9,877 9,877(b) -- 336,114 336,114
Concur Technologies -- 8,463(d) 8,463(b) -- 229,093 229,093
EPIQ Systems -- 14,679(d) 14,679(b) -- 227,084 227,084
FactSet Research
Systems -- 9,950(d) 9,950 -- 533,221 533,221
FalconStor Software -- 31,800 31,800(b) -- 117,660 117,660
Informatica 15,178 -- 15,178(b) 241,330 -- 241,330
Interactive
Intelligence -- 27,452(d) 27,452(b) -- 301,972 301,972
Kenexa -- 12,866 12,866(b) -- 84,401 84,401
Lawson Software 46,100 -- 46,100(b) 248,479 -- 248,479
Macrovision
Solutions 21,062 17,800 38,862(b) 425,874 359,916 785,790
MICROS Systems -- 14,395(d) 14,395(b) -- 302,007 302,007
Net 1 UEPS
Technologies -- 9,660 9,660(b,c) -- 159,390 159,390
NetScout Systems -- 56,045 56,045(b) -- 503,845 503,845
NetSuite -- 26,250(d) 26,250(b) -- 367,238 367,238
NICE Systems ADR -- 32,647 32,647(b,c) -- 836,089 836,089
Nuance
Communications 97,575 52,200 149,775(b) 1,302,626 696,870 1,999,496
Pegasystems -- 16,132 16,132 -- 281,826 281,826
Rosetta Stone -- 1,240 1,240(b) -- 37,138 37,138
Shanda Interactive
Entertainment ADR -- 4,685(d) 4,685(b,c) -- 224,084 224,084
Solera Holdings -- 12,998 12,998(b) -- 296,614 296,614
SuccessFactors -- 6,749 6,749(b) -- 58,784 58,784
Sybase -- 5,680 5,680(b) -- 192,893 192,893
Synchronoss
Technologies -- 18,747 18,747(b) -- 248,960 248,960
TeleCommunication
Systems Cl A -- 33,489 33,489(b) -- 328,527 328,527
TiVo -- 16,420 16,420(b) -- 123,150 123,150
Ultimate Software
Group -- 24,420(d) 24,420(b) -- 457,387 457,387
Wind River Systems -- 55,990 55,990(b) -- 410,407 410,407
---------------------------------------------------
Total 2,450,871 10,042,772 12,493,643
---------------------------------------------------
SPECIALTY RETAIL (4.9%)
Aaron Rents -- 9,868(d) 9,868 -- 331,170 331,170
Abercrombie & Fitch
Cl A 12,700 -- 12,700 343,662 -- 343,662
Aeropostale 5,800 18,690(d) 24,490(b) 197,026 634,898 831,924
Buckle -- 15,286(d) 15,286 -- 571,237 571,237
Cato Cl A -- 10,418 10,418 -- 200,234 200,234
Chico's FAS -- 63,000 63,000(b) -- 481,320 481,320
Children's Place
Retail Stores -- 13,900(d) 13,900(b) -- 395,316 395,316
Citi Trends -- 12,434 12,434(b) -- 305,379 305,379
Collective Brands -- 11,080 11,080(b) -- 160,882 160,882
Finish Line Cl A -- 32,979 32,979 -- 280,322 280,322
Gymboree -- 3,683(d) 3,683(b) -- 126,695 126,695
hhgregg -- 18,851(d) 18,851(b) -- 312,927 312,927
Hibbett Sports -- 23,562(d) 23,562(b) -- 491,268 491,268
J Crew Group 10,300 10,110(d) 20,410(b) 177,263 173,993 351,256
Urban Outfitters 17,600 -- 17,600(b) 343,024 -- 343,024
Ulta Salon
Cosmetics &
Fragrance -- 19,030 19,030(b) -- 166,513 166,513
Wet Seal Cl A -- 75,206 75,206(b) -- 286,535 286,535
Zumiez 9,600 -- 9,600(b) 115,776 -- 115,776
---------------------------------------------------
Total 1,176,751 4,918,689 6,095,440
---------------------------------------------------
</Table>
67
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
TEXTILES, APPAREL & LUXURY GOODS (1.2%)
Carter's -- 1,406 1,406(b) $ -- $ 30,060 $ 30,060
Deckers Outdoor -- 3,480 3,480(b) -- 196,690 196,690
FGX Intl Holdings -- 15,594 15,594(b,c) -- 179,643 179,643
Phillips-Van Heusen -- 16,700 16,700 -- 484,801 484,801
Steven Madden -- 11,682 11,682(b) -- 343,684 343,684
True Religion
Apparel -- 10,070(d) 10,070(b) -- 158,703 158,703
Warnaco Group -- 5,520 5,520(b) -- 159,197 159,197
---------------------------------------------------
Total -- 1,552,778 1,552,778
---------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.1%)
First Niagara
Financial Group 9,900 -- 9,900 134,046 -- 134,046
---------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.8%)
Beacon Roofing
Supply -- 21,145 21,145(b) -- 336,206 336,206
DXP Enterprises -- 17,104 17,104(b) -- 227,141 227,141
Titan Machinery 20,700 -- 20,700(b) 209,690 -- 209,690
Watsco -- 4,440(d) 4,440 -- 190,698 190,698
---------------------------------------------------
Total 209,690 754,045 963,735
---------------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (0.4%)
Leap Wireless Intl -- 4,980 4,980(b) -- 179,629 179,629
SBA Communications
Cl A -- 3,650(d) 3,650(b) -- 91,980 91,980
Shenandoah
Telecommunications -- 738 738 -- 14,487 14,487
Syniverse Holdings -- 19,522 19,522(b) -- 245,977 245,977
---------------------------------------------------
Total -- 532,073 532,073
--------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost:
$137,495,331) $33,775,123 $ 88,570,215 $122,345,338
--------------------------------------------------------------------------------------------------------------------
<Caption>
OTHER ( -- %)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
COMMUNICATIONS EQUIPMENT
Lantronix
Warrants -- 2,188 2,188(b,f)$ -- $ 109 $ 109
--------------------------------------------------------------------------------------------------------------------
TOTAL OTHER
(Cost: $ -- ) $ -- $ 109 $ 109
--------------------------------------------------------------------------------------------------------------------
<Caption>
EXCHANGE TRADED FUNDS (0.2%)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
iShares Russell
2000 Growth Index
Fund -- 3,600(d) 3,600 $ -- $ 190,044 $ 190,044
--------------------------------------------------------------------------------------------------------------------
TOTAL EXCHANGE TRADED FUNDS
(Cost: $145,697) $ -- $ 190,044 $ 190,044
--------------------------------------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (2.5%)
SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE SELIGMAN RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED FRONTIER FUND GROWTH FUND COMBINED
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
RiverSource Short-
Term Cash Fund,
0.28% -- 1,921,807 1,921,807(e) -- 1,921,807 1,921,807
SSgA U.S. Treasury
Money Market Fund 1,272,578 -- 1,272,578 1,272,578 -- 1,272,578
--------------------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET
FUND
(Cost: $3,194,385) $ 1,272,578 $ 1,921,807 $ 3,194,385
--------------------------------------------------------------------------------------------------------------------
</Table>
68
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (17.1%)
SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
CASH COLLATERAL
REINVESTMENT FUND
JPMorgan Prime
Money Market Fund -- 21,444,372 21,444,372 $ $-- $ 21,444,372 $ 21,444,372
--------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH
COLLATERAL RECEIVED FOR SECURITIES
ON LOAN
(Cost: $21,444,372) $ -- $ 21,444,372 $ 21,444,372
--------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
IN SECURITIES
(Cost:
$162,279,785)(g) $35,047,701 $112,126,547 $147,174,248
--------------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO COMBINED PORTFOLIO OF INVESTMENTS
(a) Securities are valued by policies described in Note 1 and/or 2 to the
financial statements in the annual report.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars. At April 30, 2009, the
value of foreign securities represented 4.7% of net assets.
(d) At April 30, 2009, security was partially or fully on loan. See Note 5 to
the financial statements.
(e) Affiliated Money Market Fund -- See Note 6 to the financial statements in
the annual report. The rate shown is the seven-day current annualized yield
at April 30, 2009.
(f) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). The aggregate value of such securities
at April 30, 2009 was $109, representing 0% of net assets. Information
concerning such security holdings at April 30, 2009 is as follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
----------------------------------------------------------------------------------------------
Lantronix
Warrants 04/18/08 $2,188
</Table>
(g) At April 30, 2009, the approximate cost of securities for federal income tax
purposes and the approximate aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
<Caption>
RIVERSOURCE SELIGMAN
PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED
Cost of securities for federal income tax purposes: $ 44,799,000 $117,481,000 $162,280,000
Unrealized appreciation $ 1,399,000 $ 9,615,000 $ 11,014,000
Unrealized depreciation (11,150,000) (14,970,000) (26,120,000)
---------------------------------------------------------------------------------------------------------
Net unrealized depreciation $ (9,751,000) $ (5,355,000) $(15,106,000)
---------------------------------------------------------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
69
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (BUYING FUND)
SELIGMAN GLOBAL SMALLER COMPANIES FUND (SELLING FUND)
INTRODUCTION TO PROPOSED FUND REORGANIZATION
April 30, 2009
The accompanying unaudited pro forma combining statement of assets and
liabilities and the statement of operations reflect the accounts of the two
funds at, and for, the 12-month period ending April 30, 2009. These statements
have been derived from financial statements prepared for the RiverSource
Partners International Small Cap Fund and the Seligman Global Smaller Companies
Fund as of April 30, 2009. RiverSource Partners International Small Cap Fund
invests primarily in equity securities of non-U.S. companies. Seligman Global
Smaller Companies Fund invests primarily in equity securities of smaller U.S.
and non-U.S. companies and may invest in companies domiciled in any country,
although it typically invests in developed countries.
Under the proposed Agreement and Plan of Reorganization, share classes of
Seligman Global Smaller Companies Fund would be exchanged for share classes of
RiverSource Partners International Small Cap Fund.
<Table>
<Caption>
SELLING FUND BUYING FUND
--------------------------------------------------------------------------------------------------------------
Seligman Global Smaller Companies Fund Class A RiverSource Partners International Small Cap Fund Class A
--------------------------------------------------------------------------------------------------------------
Seligman Global Smaller Companies Fund Class B RiverSource Partners International Small Cap Fund Class B
--------------------------------------------------------------------------------------------------------------
Seligman Global Smaller Companies Fund Class C RiverSource Partners International Small Cap Fund Class C
--------------------------------------------------------------------------------------------------------------
Seligman Global Smaller Companies Fund Class R2 RiverSource Partners International Small Cap Fund Class R2*
--------------------------------------------------------------------------------------------------------------
Seligman Global Smaller Companies Fund Class R5 RiverSource Partners International Small Cap Fund Class R5*
--------------------------------------------------------------------------------------------------------------
</Table>
* The inception date for the RiverSource Partners International Small Cap
Fund Class R2 and Class R5 shares is expected to be in the first quarter of
2010.
Note: RiverSource Partners International Small Cap Fund also offers Class I and
Class R4 shares.
The pro forma combining statements have been prepared to give effect to the
proposed transaction on the historical operations of the accounting survivor,
RiverSource Partners International Small Cap Fund, as if the transaction had
occurred at the beginning of the fiscal year ending April 30, 2009.
70
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (BUYING FUND)
SELIGMAN GLOBAL SMALLER COMPANIES FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF ASSETS AND LIABILITIES
<Table>
<Caption>
RIVERSOURCE RIVERSOURCE
SELIGMAN PARTNERS PARTNERS
RIVERSOURCE GLOBAL INTERNATIONAL INTERNATIONAL
PARTNERS SMALLER SMALL CAP FUND SMALL CAP FUND
INTERNATIONAL COMPANIES PRO FORMA PRO FORMA
SMALL CAP FUND FUND ADJUSTMENTS COMBINED
APRIL 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
ASSETS
Investments in securities, at cost
Unaffiliated issuers $ 49,790,267 $ 84,336,186 $ -- $ 134,126,453
Affiliated money market fund $ 386,087 $ -- $ -- $ 386,087
Investments of cash collateral received for
securities on loan $ 3,225,398 $ -- $ -- $ 3,225,398
------------------------------------------------------------
Investments in securities, at value
Unaffiliated issuers* $ 42,694,532 $ 70,098,717 $ -- $ 112,793,249
Affiliated money market fund $ 386,087 $ -- $ -- $ 386,087
Investments of cash collateral received for
securities on loan $ 3,225,398 $ -- $ -- $ 3,225,398
Cash -- 3,946,707 -- 3,946,707
Foreign currency holdings (identified cost $47,509
for RiverSource Partners International Small Cap
Fund) 48,359 -- -- 48,359
Capital shares receivable 9,931 11,924 -- 21,855
Dividends and accrued interest receivable 271,569 324,660 -- 596,229
Receivable for investment securities sold 1,471,801 841,639 -- 2,313,440
Unrealized appreciation on forward foreign currency
contracts 32 3,227 -- 3,259
Prepaid expenses -- 42,420 -- 42,420
Other assets -- 13,519 -- 13,519
------------------------------------------------------------------------------------------------------------------
Total assets 48,107,709 75,282,813 -- 123,390,522
------------------------------------------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 79,749 150,962 -- 230,711
Payable for investment securities purchased 1,103,511 976,624 -- 2,080,135
Payable upon return of securities loaned 3,225,398 -- -- 3,225,398
Unrealized depreciation on forward foreign currency
contracts 7,784 3,528 -- 11,312
Accrued investment management services fees 1,329 57,647 -- 58,976
Accrued distribution fees 256 25,439 -- 25,695
Accrued transfer agency fees 429 -- -- 429
Accrued administrative services fees 95 -- -- 95
Accrued plan administration services fees 11 -- -- 11
Other accrued expenses 86,810 176,579 -- 263,389
------------------------------------------------------------------------------------------------------------------
Total liabilities 4,505,372 1,390,779 -- 5,896,151
------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 43,602,337 $ 73,892,034 $ -- $ 117,494,371
------------------------------------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value for RiverSource
Partners International Small Cap Fund and $.001
par value for Seligman Global Smaller Companies
Fund (Note 3) $ 115,369 $ 9,165 $ 188,846 $ 313,380
Additional paid-in capital (Note 3) 90,100,805 167,513,930 (188,846) 257,425,889
Undistributed (excess of distributions over) net
investment income 151,775 (298,529) -- (146,754)
Accumulated net realized gain (loss) (39,671,100) (79,093,152) -- (118,764,252)
Unrealized appreciation (depreciation) on
investments and on translation of assets and
liabilities in foreign currencies (7,094,512) (14,239,380) -- (21,333,892)
------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding capital stock $ 43,602,337 $ 73,892,034 $ -- $ 117,494,371
------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding
shares: Class A $ 20,436,325 $ 45,472,802 $ -- $ 65,909,127
Class B $ 3,943,516 $ 1,606,451 $ -- $ 5,549,967
Class C $ 348,856 $ 19,391,730 $ -- $ 19,740,586
Class I $ 17,233,455 $ -- $ -- $ 17,233,455
Class R2 $ -- $ 574,710 $ -- $ 574,710
Class R4 $ 1,640,185 $ -- $ -- $ 1,640,185
Class R5 $ -- $ 6,846,341 $ -- $ 6,846,341
Shares outstanding (Note 3): Class A shares 5,422,645 5,373,843 6,687,908 17,484,396
Class B shares 1,087,107 227,326 215,222 1,529,655
Class C shares 96,292 2,730,675 2,626,156 5,453,123
Class I shares 4,500,170 -- -- 4,500,170
Class R2 shares -- 68,976 83,467 152,443
Class R4 shares 430,699 -- -- 430,699
Class R5 shares -- 764,527 1,023,029 1,787,556
Net asset value per share of outstanding capital
stock: Class A $ 3.77 $ 8.46 $ -- $ 3.77
Class B $ 3.63 $ 7.07 $ -- $ 3.63
Class C $ 3.62 $ 7.10 $ -- $ 3.62
Class I $ 3.83 $ -- $ -- $ 3.83
Class R2 $ -- $ 8.33 $ -- $ 3.77
Class R4 $ 3.81 $ -- $ -- $ 3.81
Class R5 $ -- $ 8.96 $ -- $ 3.83
------------------------------------------------------------------------------------------------------------------
* Including securities on loan, at value $ 3,044,173 $ -- $ -- $ 3,044,173
------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
71
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (BUYING FUND)
SELIGMAN GLOBAL SMALLER COMPANIES FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
<Table>
<Caption>
RIVERSOURCE RIVERSOURCE
RIVERSOURCE SELIGMAN PARTNERS INTERNATIONAL PARTNERS INTERNATIONAL
PARTNERS INTERNATIONAL GLOBAL SMALLER SMALL CAP FUND SMALL CAP FUND
SMALL CAP FUND COMPANIES FUND PRO FORMA ADJUSTMENTS PRO FORMA COMBINED
YEAR ENDED APRIL 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
INVESTMENT INCOME
Income:
Dividends $ 2,019,244 $ 2,097,203 $ -- $ 4,116,447
Interest 480 117,059 -- 117,539
Income distributions from affiliated
money market fund 33,940 -- -- 33,940
Fee income from securities
lending -- net 16,402 -- -- 16,402
Less foreign taxes withheld (201,364) -- -- (201,364)
--------------------------------------------------------------------------------------------------------------------------------
Total income 1,868,702 2,214,262 -- 4,082,964
--------------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees
(Note 2) 658,687 1,227,019 39,841(a) 1,925,547
Distribution fees
Class A 92,883 158,964 -- 251,847
Class B 70,852 25,619 -- 96,471
Class C 6,153 268,733 -- 274,886
Class R2 -- 2,950 -- 2,950
Transfer agency fees (Note 2)
Class A 153,313 327,958 (64,388)(b) 416,883
Class B 30,879 13,148 (171)(b) 43,856
Class C 2,660 132,218 (29,700)(b) 105,178
Class R2 -- 20,492 (20,196)(b) 296
Class R4 499 -- -- 499
Class R5 -- 15,365 850(b) 16,215
Administrative services fees (Note 2) 51,399 -- 99,624(c) 151,023
Plan administration services fees
(Note 2)
Class R2 -- -- 1,478(d) 1,478
Class R4 2,497 -- -- 2,497
Compensation of board members 1,672 11,819 -- 13,491
Custodian fees 169,870 223,268 -- 393,138
Printing and postage 39,800 40,124 -- 79,924
Registration fees (Note 2) 43,919 69,872 (34,936)(e) 78,855
Professional fees (Note 2) 37,385 92,378 (83,888)(f) 45,875
Other 5,761 34,202 -- 39,963
--------------------------------------------------------------------------------------------------------------------------------
Total expenses 1,368,229 2,664,129 (91,486) 3,940,872
Expenses waived/reimbursed by
RiverSource Investments, LLC
(Note 2) (314,447) -- (434,741)(g) (749,188)
Earnings and bank fee credits on
cash balances (Note 2) (360) -- 360(h) --
--------------------------------------------------------------------------------------------------------------------------------
Total net expenses 1,053,422 2,664,129 (525,867) 3,191,684
--------------------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net 815,280 (449,867) 525,867 891,280
--------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (32,515,965) (79,094,688) -- (111,610,653)
Foreign currency transactions (515,722) (4,274,738) -- (4,790,460)
Payment received from former
investment manager -- 550,000 -- 550,000
--------------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on
investments (33,031,687) (82,819,426) -- (115,851,113)
Net change in unrealized appreciation
(depreciation) on investments and
on translation of assets and
liabilities in foreign currencies (16,485,002) (6,201,945) -- (22,686,947)
--------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments and
foreign currencies (49,516,689) (89,021,371) -- (138,538,060)
--------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $(48,701,409) $(89,471,238) $ 525,867 $(137,646,780)
--------------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
72
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (BUYING FUND)
SELIGMAN GLOBAL SMALLER COMPANIES FUND (SELLING FUND)
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited as to April 30, 2009)
1. BASIS OF COMBINATION
The unaudited pro forma combining statement of assets and liabilities and the
statement of operations reflect the accounts of the two funds at, and for, the
12-month period ending April 30, 2009. These statements have been derived from
financial statements prepared for the RiverSource Partners International Small
Cap Fund and the Seligman Global Smaller Companies Fund as of April 30, 2009.
Each Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The primary investments
of each Fund are as follows:
RiverSource Partners International Small Cap Fund invests primarily in equity
securities of non-U.S. companies.
Seligman Global Smaller Companies Fund invests primarily in equity securities of
smaller U.S. and non-U.S companies and may invest in companies domiciled in any
country, although it typically invests in developed countries.
The pro forma statements give effect to the proposed transfer of the assets and
liabilities of Seligman Global Smaller Companies Fund in exchange for Class A,
Class B, Class C, Class R2 and Class R5 shares of RiverSource Partners
International Small Cap Fund under U.S. generally accepted accounting
principles. The pro forma statements reflect estimates for the combined
RiverSource Partners International Small Cap Fund based on the increased asset
level of the Reorganization and associated economies of scale, adjusted to
reflect current fees.
The pro forma combining statements should be read in conjunction with the
historical financial statements of the funds incorporated by reference in the
Statement of Additional Information.
The pro forma statement of operations give effect to the proposed transaction on
the historical operations of the accounting survivor, RiverSource Partners
International Small Cap Fund, as if the transaction had occurred at the
beginning of the year presented.
2. PRO FORMA ADJUSTMENTS
(a) To reflect the change in investment management services fees due to the
Reorganization.
(b) To reflect the change in transfer agent fees due to the Reorganization
including adjusting for closed account fees for each Seligman Global Smaller
Companies Fund shareholder account that will be closed on the system as a
result of the Reorganization.
(c) To reflect the change in administrative services fees due to the
Reorganization.
(d) To reflect the change in plan administration services fees due to the
Reorganization.
(e) To reflect the reduction in registration fees due to the Reorganization.
(f) To reflect the reduction in audit fees due to the Reorganization.
(g) To adjust the expense reimbursement to reflect the net reduction in fees
resulting from the Reorganization per the agreement (through Oct. 31, 2009)
by RiverSource Investments, LLC and its affiliates to waive certain fees and
absorb certain expenses of the combined fund.
(h) To reflect the elimination of the earnings and bank fee credits on cash
balances.
73
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional Class
A, Class B, Class C, Class R2 and Class R5 shares of RiverSource Partners
International Small Cap Fund at April 30, 2009, in connection with the
Reorganization. The following table reflects the number of RiverSource Partners
International Small Cap Fund shares assumed to be issued to the shareholders of
the Seligman Global Smaller Companies Fund.
<Table>
<Caption>
SELIGMAN GLOBAL RIVERSOURCE PARTNERS
SMALLER COMPANIES FUND INTERNATIONAL SMALL CAP FUND TOTAL PRO FORMA
SHARES ISSUED SHARES OUTSTANDING SHARES OUTSTANDING
-------------------------------------------------------------------------------------------------------------------------
Class A 12,061,751 5,422,645 17,484,396
-------------------------------------------------------------------------------------------------------------------------
Class B 442,548 1,087,107 1,529,655
-------------------------------------------------------------------------------------------------------------------------
Class C 5,356,831 96,292 5,453,123
-------------------------------------------------------------------------------------------------------------------------
Class I N/A 4,500,170 4,500,170
-------------------------------------------------------------------------------------------------------------------------
Class R2* 152,443 N/A 152,443
-------------------------------------------------------------------------------------------------------------------------
Class R4 N/A 430,699 430,699
-------------------------------------------------------------------------------------------------------------------------
Class R5* 1,787,556 N/A 1,787,556
-------------------------------------------------------------------------------------------------------------------------
</Table>
* The inception date for the RiverSource Partners International Small Cap
Fund Class R2 and Class R5 shares is expected to be in the first quarter of
2010.
74
COMBINED PORTFOLIO OF INVESTMENTS
RiverSource Partners International Small Cap Fund
APRIL 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (95.6%)(C)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
AUSTRALIA (2.5%)
ABB Grain 6,788 -- 6,788 $ 43,003 $ -- $ 43,003
Ansell 10,251 -- 10,251 62,410 -- 62,410
AJ Luca Group -- 102,813 102,813 -- 192,622 192,622
Ausenco -- 72,950 72,950 -- 185,940 185,940
Australian
Worldwide
Exploration 8,800 -- 8,800(b) 15,600 -- 15,600
Domino's Pizza
Enterprises 19,267 -- 19,267 43,113 -- 43,113
Emeco Holdings 184,335 -- 184,335 52,899 -- 52,899
Energy Resources of
Australia 5,850 -- 5,850 88,827 -- 88,827
Felix Resources 7,935 -- 7,935 64,393 -- 64,393
Goodman Fielder 700 -- 700 585 -- 585
Healthscope 37,400 -- 37,400 105,154 -- 105,154
Incitiec Pivot -- 225,570 225,570 -- 348,154 348,154
Karoon Gas
Australia -- 76,275 76,275(b) -- 301,739 301,739
Macmahon Holdings 125,900 -- 125,900 31,099 -- 31,099
NRW Holdings 115,986 -- 115,986 65,727 -- 65,727
Nufarm 8,356 -- 8,356 80,316 -- 80,316
Reject Shop 2,074 -- 2,074 16,650 -- 16,650
Seek 179 -- 179 428 -- 428
Sigma
Pharmaceuticals 130,000 -- 130,000 105,779 -- 105,779
Sims Metal
Management -- 24,867 24,867 -- 360,583 360,583
Tower Australia
Group 90,600 -- 90,600 134,935 -- 134,935
Whitehaven Coal -- 229,359 229,359(b) -- 333,040 333,040
WorleyParsons -- 25,368 25,368 -- 338,028 338,028
-------------------------------------------------------
Total 910,918 2,060,106 2,971,024
-------------------------------------------------------
AUSTRIA (0.2%)
bwin Interactive
Entertainment 3,600(f) -- 3,600(b) 114,337 -- 114,337
Osterreichische
Post 3,646 -- 3,646 107,065 -- 107,065
-------------------------------------------------------
Total 221,402 -- 221,402
-------------------------------------------------------
BELGIUM (0.5%)
Mobistar 1,700 -- 1,700 102,181 -- 102,181
Nyrstar 17,300 -- 17,300 112,867 -- 112,867
Telenet Group
Holding 5,600(f) -- 5,600(b) 109,160 -- 109,160
Umicore -- 16,250 16,250 -- 318,461 318,461
-------------------------------------------------------
Total 324,208 318,461 642,669
-------------------------------------------------------
BERMUDA (0.2%)
Lancashire Holdings 26,313 -- 26,313(b) 186,862 -- 186,862
-------------------------------------------------------
BRAZIL (1.4%)
Brasil Brokers
Paricipacoes -- 224,500 224,500(b) -- 276,914 276,914
Cia de Saneamento
Basico do Estado de
Sao Paulo 6,700 -- 6,700 95,425 -- 95,425
Companhia
Catarinense de
Aguas Saneamento -- 65,600 65,600(b) -- 403,379 403,379
Companhia de
Saneamento de Minas
Gerias "Coposa MG" -- 33,800 33,800 -- 368,581 368,581
EDP Energias do
Brasil 9,600 -- 9,600 115,529 -- 115,529
General Shopping
Brazil -- 154,600 154,600(b) -- 235,896 235,896
Metalurgica Gerdau 9,700 -- 9,700 92,161 -- 92,161
Vivo Participacoes 6,300 -- 6,300 101,395 -- 101,395
-------------------------------------------------------
Total 404,510 1,284,770 1,689,280
-------------------------------------------------------
</Table>
75
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
BRITISH VIRGIN ISLANDS (0.1%)
Playtech 18,625 -- 18,625 $ 126,066 $ -- $ 126,066
-------------------------------------------------------
CANADA (3.5%)
Alimentation
Couche-Tard 7,800 -- 7,800 85,351 -- 85,351
Allen-Vanguard -- 306,000 306,000(b) -- 25,643 25,643
ATCO Cl I 1,600 -- 1,600 46,084 -- 46,084
Aurizon Mines 21,100 -- 21,100(b) 78,201 -- 78,201
Biovail 7,800 -- 7,800 85,351 -- 85,351
Capstone Mining 48,300 -- 48,300(b) 81,000 -- 81,000
Corus Entertainment
Series B 8,600 -- 8,600 114,657 -- 114,657
Empire Co Cl A 2,200 -- 2,200 91,941 -- 91,941
Enerflex Systems
Income Fund Unit 12,800 -- 12,800 108,617 -- 108,617
First Quantum
Minerals 3,900 -- 3,900 150,918 -- 150,918
Gammon Gold 17,600 -- 17,600(b) 117,028 -- 117,028
Gildan Activewear -- 24,500 24,500(b) -- 280,525 280,525
Gluskin Shef &
Associates -- 29,800 29,800(b) -- 287,187 287,187
Highpine Oil & Gas 15,400 -- 15,400(b) 70,505 -- 70,505
Home Capital Group 5,600 -- 5,600 129,271 -- 129,271
IAMGOLD 7,400 -- 7,400 59,009 -- 59,009
Laurentian Bank of
Canada 6,900 -- 6,900 166,628 -- 166,628
Mahalo Energy -- 110,300 110,300(b) -- 2,773 2,773
Maple Leaf Foods 7,300 -- 7,300 51,540 -- 51,540
Open Text 2,300 -- 2,300(b) 75,792 -- 75,792
Quebecor Cl B 3,100 -- 3,100 40,030 -- 40,030
Sierra Wireless -- 57,100 57,100(b) -- 322,044 322,044
Silvercorp Metals -- 120,500 120,500 -- 279,716 279,716
Superior Plus 10,000 -- 10,000 90,977 -- 90,977
Uranium
Participation -- 56,500 56,500(b) -- 347,532 347,532
Value Creation -- 58,000 58,000(b) -- 211,917 211,917
Viterra -- 27,000 27,000(b) -- 196,849 196,849
Western Goldfields -- 243,500 243,500 -- 433,430 433,430
WestJet Airlines 10,200 -- 10,200(b) 99,212 -- 99,212
-------------------------------------------------------
Total 1,742,112 2,387,616 4,129,728
-------------------------------------------------------
CHINA (2.4%)
AsiaInfo Holdings 13,600 -- 13,600(b) 227,800 -- 227,800
China Citic Bank
Series H 212,000 -- 212,000 97,658 -- 97,658
China High Speed
Transmission
Equipment Group 116,000 59,000 175,000 209,551 106,017 315,568
China Natl
Materials Series H 71,000 -- 71,000 54,693 -- 54,693
China Railway
Construction Series
H 94,900 -- 94,900(b) 132,249 -- 132,249
China South
Locomotive &
Rolling Stock
Series H 176,000 -- 176,000(b) 79,711 -- 79,711
China Vanke Series
B 105,200 -- 105,200 111,038 -- 111,038
CSG Holding Series
B 160,700 -- 160,700 115,913 -- 115,913
Dongfeng Motor
Group 166,000 -- 166,000 125,090 -- 125,090
Li Ning 16,000 127,000 143,000 33,033 261,271 294,304
Mindray Medical
Intl ADR -- 8,400 8,400 -- 191,688 191,688
NetEase.com ADR -- 7,500 7,500 -- 226,350 226,350
Perfect World ADR -- 17,000 17,000(b) -- 308,720 308,720
Sinotruk Hong Kong 58,000 -- 58,000 53,361 -- 53,361
Sohu.com 1,400 -- 1,400(b) 73,010 -- 73,010
Weichai Power
Series H 16,800 -- 16,800 47,908 -- 47,908
Zhejiang Expressway
Series H 180,000 -- 180,000 154,918 -- 154,918
Zhuyzhou CSR Times
Electric Series H 118,000(f) -- 118,000 162,614 -- 162,614
-------------------------------------------------------
Total 1,678,547 1,094,046 2,772,593
-------------------------------------------------------
</Table>
76
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
DENMARK (0.6%)
Genmab 1,338 -- 1,338(b) $ 52,012 $ -- $ 52,012
H Lundbeck 9,400 -- 9,400 171,218 -- 171,218
Rockwool Intl
Series B -- 3,663 3,663 -- 283,825 283,825
SimCorp 1,776 -- 1,776 233,546 -- 233,546
-------------------------------------------------------
Total 456,776 283,825 740,601
-------------------------------------------------------
FINLAND (0.3%)
Nokian Renkaat -- 11,474 11,474 -- 181,954 181,954
Tieto 9,360 -- 9,360 121,388 -- 121,388
-------------------------------------------------------
Total 121,388 181,954 303,342
-------------------------------------------------------
FRANCE (5.7%)
ALTRAN Technologies 22,900 -- 22,900(b) 77,671 -- 77,671
April Group -- 13,179 13,179 -- 392,203 392,203
bioMerieux -- 8,617 8,617 -- 645,553 645,553
Etablissements
Maurel et Prom -- 20,843 20,843 -- 307,933 307,933
Eurofins Scientific -- 9,371 9,371(b) -- 517,894 517,894
Faiveley 2,526 -- 2,526 185,624 -- 185,624
Gemalto 2,500 -- 2,500(b) 79,235 -- 79,235
Guerbet 782 -- 782 116,898 -- 116,898
Havas 33,400 -- 33,400 105,638 -- 105,638
Imerys -- 5,633 5,633 -- 233,198 233,198
Klepierre -- 8,360 8,360 -- 182,849 182,849
Korian -- 16,623 16,623(b) -- 377,872 377,872
Meetic 7,222 -- 7,222(b) 161,804 -- 161,804
Nexity 6,269 -- 6,269 204,830 -- 204,830
Orpea 4,440 -- 4,440(b) 182,998 -- 182,998
PagesJaunes Groupe 8,100 -- 8,100 88,647 -- 88,647
Rubis 3,786 -- 3,786 215,739 -- 215,739
Seche Environnement -- 7,898 7,898 -- 465,132 465,132
Sechilienne-Sidec 7,105 16,517 23,622 246,343 571,749 818,092
Soitec 25,590 -- 25,590(b) 164,175 -- 164,175
Vilmorin & Cie -- 7,197 7,197 -- 679,874 679,874
Virbac 2,814 3,994 6,808 189,920 269,616 459,536
Zodiac 2,800 -- 2,800 82,333 -- 82,333
-------------------------------------------------------
Total 2,101,855 4,643,873 6,745,728
-------------------------------------------------------
GERMANY (3.3%)
aleo solar 7,850 -- 7,850(b) 61,395 -- 61,395
BAUER 2,600(f) -- 2,600 98,404 -- 98,404
Centrotherm
Photovoltaics 3,293 -- 3,293(b) 127,901 -- 127,901
CTS Eventim 6,537 -- 6,537 190,316 -- 190,316
ElringKlinger 8,596 29,174 37,770 124,789 422,877 547,666
Fielmann 3,969 -- 3,969 243,447 -- 243,447
Freenet 19,462 -- 19,462(b) 124,912 -- 124,912
Fresenius Medical
Care & Co 3,000 -- 3,000 118,109 -- 118,109
Gerresheimer 4,950 -- 4,950 119,548 -- 119,548
GERRY WEBER Intl 6,250 -- 6,250 133,906 -- 133,906
Hannover
Rueckversicherung 1,750 -- 1,750 56,901 -- 56,901
Hochtief -- 7,059 7,059 -- 345,104 345,104
Lanxess 5,300 -- 5,300 114,605 -- 114,605
Kontron -- 74,134 74,134(b) -- 809,145 809,145
Praktiker Bau- und
Heimwerkermaerkte
Holding -- 31,318 31,318(b) -- 227,080 227,080
Rational 759 -- 759 77,411 -- 77,411
Rheinmmetall 922 -- 922 39,129 -- 39,129
Rhon-Klinikum 4,176 -- 4,176 87,979 -- 87,979
Software 3,999 -- 3,999 250,421 -- 250,421
Wirecard 12,500 -- 12,500(b) 104,214 -- 104,214
-------------------------------------------------------
Total 2,073,387 1,804,206 3,877,593
-------------------------------------------------------
</Table>
77
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
HONG KONG (1.9%)
AAC Acoustic
Technologies
Holdings 34,000 -- 34,000(b) $ 18,514 $ -- $ 18,514
Agile Property
Holdings 124,000 -- 124,000 93,601 -- 93,601
Cafe de Coral
Holdings 10,000 -- 10,000 18,607 -- 18,607
Chaoda Modem
Agriculture
Holdings 201,838 -- 201,838 115,636 -- 115,636
Cheung Kong
Infrastructure
Holdings 19,000 -- 19,000 73,672 -- 73,672
China Everbright
Intl 777,000 -- 777,000 179,464 -- 179,464
China Insurance
Intl Holdings 42,000(f) -- 42,000 70,453 -- 70,453
China Mengniu Dairy 27,000 -- 27,000 48,426 -- 48,426
China Natl Building
Material Series H 66,000(f) -- 66,000 140,007 -- 140,007
Dah Sing Banking
Group 30,800 -- 30,800 22,256 -- 22,256
Denway Motors 296,000 -- 296,000 124,895 -- 124,895
FU JI Food &
Catering Services
Holdings 84,000 -- 84,000 44,764 -- 44,764
Hengan Intl Group 30,000 -- 30,000 125,615 -- 125,615
Hopson Development
Holdings 198,000(f) -- 198,000 154,060 -- 154,060
Huabao Intl
Holdings 105,000 285,000 390,000 74,517 201,833 276,350
Noble Group 99,000 -- 99,000 86,989 -- 86,989
Pacific Basin
Shipping 189,000 -- 189,000 94,867 -- 94,867
Peace Mark Holdings 92,000(d,e,g) -- 92,000(b) -- -- --
Sa Sa Intl Holdings 304,000 668,000 972,000 106,696 233,649 340,345
Sinofert Holdings 134,000(f) -- 134,000 62,765 -- 62,765
Techtronic Inds 39,500(f) -- 39,500 23,649 -- 23,649
Xinyi Glass
Holdings 106,000 -- 106,000 66,473 -- 66,473
-------------------------------------------------------
Total 1,745,926 435,482 2,181,408
-------------------------------------------------------
INDONESIA (0.1%)
United Tractors 114,333 -- 114,333 97,075 -- 97,075
-------------------------------------------------------
IRELAND (0.2%)
DCC 7,631 -- 7,631 138,238 -- 138,238
United Drug 17,900 -- 17,900 50,218 -- 50,218
-------------------------------------------------------
Total 188,456 -- 188,456
-------------------------------------------------------
ISRAEL (0.4%)
Bezeq Israeli
Telecommunication 120,804 -- 120,804 190,709 -- 190,709
Cellcom Israel 3,500 -- 3,500 79,911 -- 79,911
Makhteshim-Agan
Inds 25,086 -- 25,086 111,815 -- 111,815
Partner
Communications 4,800 -- 4,800 80,100 -- 80,100
-------------------------------------------------------
Total 462,535 -- 462,535
-------------------------------------------------------
ITALY (2.4%)
ACEA 4,583 -- 4,583 57,253 -- 57,253
Amplifon 4,942 -- 4,942 12,681 -- 12,681
Ansaldo STS 22,863 -- 22,863(b) 366,397 -- 366,397
Azimut Holding 37,006 -- 37,006(b) 261,999 -- 261,999
Davide Compari-
Milano 36,660 -- 36,660 248,877 -- 248,877
DiaSorin 11,704 25,985 37,689 260,981 577,254 838,235
ERG 7,700 -- 7,700 119,832 -- 119,832
Geox -- 31,901 31,901 -- 270,594 270,594
Immobiliare Grande
Distribuzione -- 253,579 253,579 -- 338,755 338,755
Lottomatica 2,700 -- 2,700(b) 55,775 -- 55,775
Maire Tecnimont 31,900 -- 31,900 65,813 -- 65,813
Prysmian 6,900 -- 6,900 84,828 -- 84,828
Recordati 27,200 -- 27,200 157,568 -- 157,568
-------------------------------------------------------
Total 1,692,004 1,186,603 2,878,607
-------------------------------------------------------
JAPAN (18.7%)
Aeon Delight -- 23,100 23,100 -- 294,084 294,084
Aichi Steel 44,000(f) -- 44,000 145,032 -- 145,032
Ain Pharmaciez 8,300 -- 8,300 126,185 -- 126,185
Air Water -- 21,000 21,000 -- 171,821 171,821
Alpen 5,300 -- 5,300 87,349 -- 87,349
</Table>
78
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
JAPAN (CONT.)
Amada -- 65,000 65,000 $ -- $ 396,924 $ 396,924
Asics -- 45,000 45,000 -- 290,640 290,640
Axell 85 -- 85 276,728 -- 276,728
Benefit One 100 -- 100 54,159 -- 54,159
Capcom -- 23,600 23,600 -- 408,301 408,301
Chiyoda 7,800 43,000 50,800 107,666 256,992 364,658
Chugoku Marine
Paints 24,000(f) -- 24,000 136,797 -- 136,797
CMIC 140 -- 140 30,244 -- 30,244
COMSYS Holdings 11,000 -- 11,000 89,027 -- 89,027
Cosmos
Pharmaceutical -- 14,900 14,900 -- 193,319 193,319
Credit Saison 12,800 -- 12,800 142,281 -- 142,281
Daihatsu Diesel Mfg 6,000 -- 6,000 31,035 -- 31,035
Dai-ichi Seiko 7,100 -- 7,100 121,119 -- 121,119
Daiichikosho 16,000 -- 16,000 128,196 -- 128,196
Daiichi Chuo Kisen
Kaisha -- 172,000 172,000 -- 400,829 400,829
Daiseki 5,000(f) -- 5,000 95,640 -- 95,640
DeNA 33 -- 33 117,476 -- 117,476
Disco 3,400 -- 3,400 101,725 -- 101,725
Don Quijote 3,300 -- 3,300 50,270 -- 50,270
Ebara 26,000 -- 26,000 69,879 -- 69,879
en-japan 110 -- 110 83,226 -- 83,226
EPS 43 182 225 154,819 654,468 809,287
FamilyMart -- 2,800 2,800 -- 76,798 76,798
Foster Electric 12,000(f) -- 12,000 93,713 -- 93,713
FP 7,100(f) -- 7,100 248,431 -- 248,431
Fuji Oil 5,400 -- 5,400 53,508 -- 53,508
Funai Electric 4,900(f) -- 4,900 138,653 -- 138,653
GOLDCREST 3,000 -- 3,000 68,611 -- 68,611
Gourmet Navigator 71 -- 71 157,051 -- 157,051
H.I.S 3,300 -- 3,300 51,776 -- 51,776
Hiroshima Bank 15,000 -- 15,000 56,593 -- 56,593
Hisamitsu
Pharmaceutical 1,800 -- 1,800 50,934 -- 50,934
Hitachi Information
Systems 8,500 -- 8,500 150,346 -- 150,346
Hitachi Software
Engineering 4,700 -- 4,700 57,678 -- 57,678
Hogy Medical -- 5,700 5,700 -- 304,288 304,288
Intage 7,600 -- 7,600 111,766 -- 111,766
IRISO Electronics 11,200 -- 11,200 74,970 -- 74,970
IT Holdings 4,700 -- 4,700 56,915 -- 56,915
Kakaku.com 39(f) -- 39 133,298 -- 133,298
Kandenko 7,000 -- 7,000 44,301 -- 44,301
Kobayashi
Pharmaceutical -- 10,600 10,600 -- 344,028 344,028
Koito Mfg 22,000(f) -- 22,000 199,029 -- 199,029
Kokusai 18,700 -- 18,700 59,932 -- 59,932
Kyowa Exeo 16,000(f) -- 16,000 124,789 -- 124,789
Kureha -- 73,000 73,000 -- 308,524 308,524
Lintec 3,600 -- 3,600 49,071 -- 49,071
Macromill 78 -- 78 75,548 -- 75,548
Maeda 30,000 -- 30,000 96,451 -- 96,451
Mandom -- 12,300 12,300 -- 221,309 221,309
MANI 3,200 -- 3,200 170,711 -- 170,711
Mars Engineering 10,200(f) -- 10,200 285,002 -- 285,002
Matsui Securities 20,800(f) -- 20,800 147,247 -- 147,247
Megane TOP 2,800 -- 2,800 26,722 -- 26,722
Meitec 9,400 -- 9,400 126,987 -- 126,987
Message 78 -- 78 89,630 -- 89,630
Minebea 26,000 -- 26,000 99,940 -- 99,940
Miraca Holdings 7,300(f) -- 7,300 148,074 -- 148,074
Miura -- 21,100 21,100 -- 461,120 461,120
Mitsui Engineering
& Shipbuilding 79,000 -- 79,000 160,244 -- 160,244
</Table>
79
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
JAPAN (CONT.)
Modec 3,200 21,500 24,700 $ 45,631 $ 307,771 $ 353,402
Mori Seiki -- 22,900 22,900 -- 217,878 217,878
Moshi Moshi Hotline 9,800(f) 14,900 24,700 166,681 252,847 419,528
Nabtesco -- 38,000 38,000 -- 307,274 307,274
NAMCO BANDAI
Holdings 10,200 -- 10,200 101,277 -- 101,277
Net One Systems 84 -- 84 105,299 -- 105,299
Nichii Gakkan 3,600 -- 3,600 30,670 -- 30,670
Nichi-iko
Pharmaceutical 5,900(f) -- 5,900 159,469 -- 159,469
Nichirei 48,000 -- 48,000 167,466 -- 167,466
Nihon Kohden 3,500 -- 3,500 38,160 -- 38,160
Nihon M&A Center 12 -- 12 29,550 -- 29,550
Nihon Unisys 12,200 -- 12,200 76,344 -- 76,344
Nippon Carbon -- 42,000 42,000 -- 99,592 99,592
Nippon Denko 16,000 23,000 39,000 67,993 97,370 165,363
Nippon Electric
Glass -- 38,000 38,000 -- 305,568 305,568
NIPRO 9,000(f) -- 9,000 130,985 -- 130,985
Nishimatsuya Chain 33,300(f) -- 33,300 265,457 -- 265,457
Nishi-Nippon City
Bank 61,000 -- 61,000 121,877 -- 121,877
Nomura Real Estate
Holdings 6,400 -- 6,400 104,504 -- 104,504
OBIC -- 190 190 -- 25,681 25,681
Oenon Holdings 61,000 -- 61,000 117,547 -- 117,547
Okinawa Electric
Power 2,370 -- 2,370 112,732 -- 112,732
Optex 8,100 -- 8,100 66,378 -- 66,378
Osaka Securities
Exchange 35 172 207 110,752 545,392 656,144
Otsuka 4,500(f) -- 4,500 166,584 -- 166,584
Outsourcing 164 -- 164 23,303 -- 23,303
Park24 10,000 -- 10,000 77,384 -- 77,384
POINT 2,440 8,920 11,360(b) 108,885 397,605 506,490
Proto 7,100 -- 7,100 156,619 -- 156,619
Rinnai 3,500 -- 3,500 121,756 -- 121,756
Roland 10,800(f) -- 10,800 145,024 -- 145,024
Sanden 6,000 -- 6,000 13,509 -- 13,509
Sanki Engineering 17,000 -- 17,000 114,829 -- 114,829
Sanyo Special Steel 33,000 -- 33,000 116,806 -- 116,806
SEC Carbon -- 56,000 56,000 -- 201,852 201,852
Seven Bank -- 81 81 -- 190,860 190,860
Shima Seiki Mfg 900 -- 900 19,488 -- 19,488
Shimano 900(f) -- 900 26,380 -- 26,380
Shinko Plantech -- 72,200 72,200 -- 477,565 477,565
Showa Shell Sekiyu 12,300 -- 12,300 107,657 -- 107,657
Sintokogio 8,600 -- 8,600 55,124 -- 55,124
Software Service 6,300 -- 6,300 49,263 -- 49,263
Square Enix
Holdings -- 35,600 35,600 -- 639,671 639,671
Sugi Holdings -- 17,100 17,100 -- 321,993 321,993
Sumco -- 26,100 26,100 -- 378,110 378,110
Sundrug -- 18,000 18,000 -- 279,233 279,233
Sysmex 3,000 -- 3,000 90,062 -- 90,062
Taiko
Pharmaceutical 1,400 -- 1,400 56,228 -- 56,228
Taiyo Nippon Sanso -- 29,000 29,000 -- 202,811 202,811
TBK 35,000 -- 35,000 50,762 -- 50,762
Toho Pharmaceutical 12,400 -- 12,400 119,473 -- 119,473
Token 5,790 -- 5,790 135,356 -- 135,356
Tokyo Ohka Kogyo -- 19,200 19,200 -- 322,042 322,042
Toridoll 18(f) -- 18 67,364 -- 67,364
Toshiba Machine 20,000(f) -- 20,000 59,230 -- 59,230
Toyo Engineering 22,000 67,000 89,000 69,615 212,679 282,294
Toyoda Gosei -- 7,200 7,200 -- 140,845 140,845
Toyota Boshoku -- 26,500 26,500 -- 333,948 333,948
Tsubakimoto Chain 11,000 -- 11,000 35,923 -- 35,923
</Table>
80
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
JAPAN (CONT.)
Tsumura -- 11,500 11,500 $ -- $ 314,524 $ 314,524
UBE Inds 24,000 -- 24,000 45,031 -- 45,031
Union Tool 6,000 6,900 12,900 143,308 164,372 307,680
United Arrows 16,600 -- 16,600 101,015 -- 101,015
USJ 216 -- 216 108,220 -- 108,220
Valor 18,000 -- 18,000 134,545 -- 134,545
Village Vanguard 54 -- 54 123,336 -- 123,336
VSN 6,900 -- 6,900 41,848 -- 41,848
Works Applications 202 -- 202 92,192 -- 92,192
Yamaguchi Financial
Group 8,000 -- 8,000 76,999 -- 76,999
Zappallas 33 -- 33 68,277 -- 68,277
-------------------------------------------------------
Total 10,496,941 11,520,928 22,017,869
-------------------------------------------------------
MALAYSIA (0.3%)
Asiatic Development -- 154,000 154,000 -- 211,117 211,117
Berjaya Sports Toto 41,200 -- 41,200 56,987 -- 56,987
DiGi.Com 15,000 -- 15,000 94,040 -- 94,040
Sarawak Energy 72,800 -- 72,800 41,138 -- 41,138
-------------------------------------------------------
Total 192,165 211,117 403,282
-------------------------------------------------------
MEXICO (0.5%)
Coca-Cola Femsa ADR 1,900 -- 1,900 74,746 -- 74,746
Corporacion GEO
Series B 74,800 -- 74,800(b) 97,708 -- 97,708
Grupo Financiero
Banorte Series O 123,700 -- 123,700 191,208 -- 191,208
Mexichem 192,900 -- 192,900 173,585 -- 173,585
-------------------------------------------------------
Total 537,247 -- 537,247
-------------------------------------------------------
NETHERLANDS (1.2%)
ASM Pacific
Technology -- 86,700 86,700 -- 390,577 390,577
Grontmij 4,600 -- 4,600 101,781 -- 101,781
Imtech 14,423 21,055 35,478 226,750 328,291 555,041
Smit Internationale -- 4,474 4,474 -- 251,734 251,734
Ten Cate 2,700 -- 2,700 51,952 -- 51,952
Unit 4 Agresso 8,800(f) -- 8,800 107,138 -- 107,138
-------------------------------------------------------
Total 487,621 970,602 1,458,223
-------------------------------------------------------
NEW ZEALAND (0.3%)
Nufarm -- 41,877 41,877 -- 403,448 403,448
-------------------------------------------------------
NORWAY (0.5%)
Atea 17,200 -- 17,200 52,981 -- 52,981
DNO -- 362,000 362,000(b) -- 309,071 309,071
Opera Software 24,748 -- 24,748(b) 100,761 -- 100,761
TGS NOPEC
Geophysical 11,600 -- 11,600(b) 87,206 -- 87,206
-------------------------------------------------------
Total 240,948 309,071 550,019
-------------------------------------------------------
PANAMA (0.1%)
Thunderbird Resorts -- 71,100 71,100(b) -- 113,760 113,760
-------------------------------------------------------
POLAND (0.1%)
KGHM Polska Miedz 5,431 -- 5,431 96,659 -- 96,659
-------------------------------------------------------
PORTUGAL (0.1%)
Mota Engil 18,484 -- 18,484(b) 80,476 -- 80,476
-------------------------------------------------------
RUSSIA (0.1%)
Mechel ADR 10,900 -- 10,900 57,988 -- 57,988
Sistema 13,600 -- 13,600 116,960 -- 116,960
-------------------------------------------------------
Total 174,948 -- 174,948
-------------------------------------------------------
</Table>
81
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
SINGAPORE (0.7%)
CH Offshore 439,700 -- 439,700 $ 86,187 $ -- $ 86,187
Golden Agri-
Resources 146,640 -- 146,640 36,672 -- 36,672
Goodpack -- 643,000 643,000(b) -- 352,765 352,765
Indofood Agri
Resources 176,000 -- 176,000(b) 108,848 -- 108,848
Olam Intl 85,000 -- 85,000 101,690 -- 101,690
Singapore Post 227,000 -- 227,000 116,607 -- 116,607
-------------------------------------------------------
Total 450,004 352,765 802,769
-------------------------------------------------------
SOUTH AFRICA (0.5%)
Group Five 27,200 -- 27,200 102,286 -- 102,286
JD Group 15,586(f) -- 15,586 63,068 -- 63,068
Massmart Holdings 13,500 -- 13,500 117,228 -- 117,228
Pretoria Portland
Cement 23,335 -- 23,335 90,288 -- 90,288
Shoprite Holdings 20,800 -- 20,800 125,499 -- 125,499
Woolworths Holdings 46,067 -- 46,067 65,311 -- 65,311
-------------------------------------------------------
Total 563,680 -- 563,680
-------------------------------------------------------
SOUTH KOREA (2.8%)
Cheil Inds 2,470 -- 2,470 88,634 -- 88,634
CJ CheilJedang -- 1,653 1,653 -- 202,938 202,938
Daewoo Shipbuilding
& Marine
Engineering 3,780 -- 3,780 67,084 -- 67,084
Daishin Securities 5,200 -- 5,200 72,408 -- 72,408
Digitech Systems 2,647 -- 2,647(b) 54,307 -- 54,307
Hana Tour Service -- 6,806 6,806 -- 159,611 159,611
Hansol Paper 6,850 -- 6,850(b) 50,658 -- 50,658
Hite Brewery 323 -- 323 46,110 -- 46,110
Hotel Shilla -- 17,760 17,760 -- 219,314 219,314
Hyundai DSF 5,810 -- 5,810 35,669 -- 35,669
Hyundai Marine &
Fire Insurance 12,000 -- 12,000 139,012 -- 139,012
Hyundai Securities 8,680 -- 8,680(b) 101,568 -- 101,568
Korea Plant Service
& Engineering -- 11,350 11,350 -- 282,733 282,733
Korean Reinsurance 21,790 -- 21,790 201,428 -- 201,428
LG Dacom 5,180 -- 5,180 79,403 -- 79,403
LG Household &
Health Care 341 -- 341 46,951 -- 46,951
LIG Insurance 10,590 -- 10,590 133,005 -- 133,005
MegaStudy -- 2,530 2,530 -- 428,757 428,757
Mirae Asset
Securities -- 4,953 4,953 -- 286,840 286,840
Nong Shim 400 -- 400 67,400 -- 67,400
Sodiff Advanced
Materials 1,906 -- 1,906 121,030 -- 121,030
Synopex 9,315 -- 9,315(b) 28,703 -- 28,703
Taewoong 1,315 -- 1,315 96,940 -- 96,940
Taeyoung
Engineering &
Construction 12,130 -- 12,130 69,076 -- 69,076
Woongjin Thinkbig 5,370 -- 5,370 91,113 -- 91,113
YedangOnline 16,440 -- 16,440(b) 112,986 -- 112,986
-------------------------------------------------------
Total 1,703,485 1,580,193 3,283,678
-------------------------------------------------------
SPAIN (1.1%)
Bolsas y Mercados
Espanoles 6,723 -- 6,723 189,503 -- 189,503
Ebro Puleva 15,926 -- 15,926 227,827 -- 227,827
Grifols -- 23,817 23,817 -- 418,240 418,240
Prosegur Compania
de Seguridad 8,504 -- 8,504 243,644 -- 243,644
Red Electrica de
Espana 2,600 -- 2,600 109,380 -- 109,380
Viscofan 6,190 -- 6,190 115,828 -- 115,828
-------------------------------------------------------
Total 886,182 418,240 1,304,422
-------------------------------------------------------
</Table>
82
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
SWEDEN (1.4%)
Autoliv 5,011 -- 5,011 $ 123,621 $ -- $ 123,621
Axfood 3,450 -- 3,450 72,317 -- 72,317
Betsson 16,802 -- 16,802(b) 194,385 -- 194,385
Elekta Series B 19,030(f) -- 19,030 221,937 -- 221,937
Hexagon Series B 28,250 -- 28,250 218,765 -- 218,765
Loomis Series B 20,792 -- 20,792 177,823 -- 177,823
Lundin Petroleum -- 53,222 53,222(b) -- 347,590 347,590
SWECO -- 60,116 60,116(b) -- 277,056 277,056
-------------------------------------------------------
Total 1,008,848 624,646 1,633,494
-------------------------------------------------------
SWITZERLAND (3.2%)
Acino Holding 753 -- 753 112,162 -- 112,162
Aryzta 2,500 -- 2,500(b) 73,016 -- 73,016
Bachem Holding -- 3,928 3,928 -- 241,302 241,302
Banque Cantonale
Vaudoise 545 -- 545(b) 186,714 -- 186,714
Clariant 21,752 -- 21,752(b) 124,075 -- 124,075
Dufry Group -- 28,532 28,532(b) -- 760,342 760,342
Ferrexpo 13,400 -- 13,400 29,143 -- 29,143
Galenica 400 -- 400 115,658 -- 115,658
Helvetia Holding 550 -- 550 143,488 -- 143,488
Panalpina
Welttransport
Holding -- 3,708 3,708 -- 202,432 202,432
Paris RE Holdings -- 15,685 15,685(b) -- 301,077 301,077
Schindler Holding 1,700 -- 1,700 89,894 -- 89,894
Swiss Prime Site 2,800(f) -- 2,800(b) 131,377 -- 131,377
Temenos Group -- 46,162 46,162(b) -- 637,119 637,119
Valiant Holding -- 3,376 3,376 -- 593,772 593,772
-------------------------------------------------------
Total 1,005,527 2,736,044 3,741,571
-------------------------------------------------------
TAIWAN (1.7%)
Cheng Shin Rubber
Ind 97,000 -- 97,000 145,965 -- 145,965
Chia Hsin Cement 174,000 -- 174,000(b) 87,892 -- 87,892
Chicony Electronics 65,470 -- 65,470 107,134 -- 107,134
Compal Electronics 100,000 -- 100,000 84,994 -- 84,994
D-Link 88,808 -- 88,808 64,334 -- 64,334
InnoLux Display 29,000 -- 29,000 32,060 -- 32,060
L&K Engineering 78,000 -- 78,000 62,049 -- 62,049
MiTAC Intl 111,000 -- 111,000 51,369 -- 51,369
Novatek
Microelectronics 57,000 -- 57,000 119,307 -- 119,307
President Chain
Store 39,000 -- 39,000 93,781 -- 93,781
Radiant Opto-
Electronics 110,000 -- 110,000 131,922 -- 131,922
Realtek
Semiconductor 79,000 -- 79,000 128,317 -- 128,317
Richtek Technology 17,000 -- 17,000 85,872 -- 85,872
Sheng Yu Steel 115,000 -- 115,000 79,308 -- 79,308
Shin Zu Shing 9,000 -- 9,000 37,159 -- 37,159
Simplo Technology 12,000 -- 12,000 45,915 -- 45,915
Taiwan Cement 138,000 -- 138,000 131,902 -- 131,902
U-Ming Marine
Transport 112,000 -- 112,000 202,583 -- 202,583
Uni-President
Enterprises 98,000 -- 98,000 98,560 -- 98,560
USI 233,000 -- 233,000 85,628 -- 85,628
Vanguard Intl
Semiconductor 123,427 -- 123,427 45,920 -- 45,920
Wistron 53,000 -- 53,000 67,170 -- 67,170
-------------------------------------------------------
Total 1,989,141 -- 1,989,141
-------------------------------------------------------
THAILAND (0.3%)
BEC World 207,200 -- 207,200 116,385 -- 116,385
Kasikornbank 56,100 -- 56,100 89,123 -- 89,123
Tata Steel Thailand 745,300 -- 745,300 22,835 -- 22,835
Thoresen Thai
Agencies 164,720 -- 164,720 76,636 -- 76,636
-------------------------------------------------------
Total 304,979 -- 304,979
-------------------------------------------------------
</Table>
83
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
TURKEY (0.7%)
Anadolu Sigorta 165,000 -- 165,000 $ 111,459 $ -- $ 111,459
Aygaz 66,000 -- 66,000 97,836 -- 97,836
Tupras Turkiye
Petrol Rafinerileri 19,000 -- 19,000 190,143 -- 190,143
Turk
Telekomunikasyon 41,000 -- 41,000(b) 112,835 -- 112,835
Turkiye Halk
Bankasi 36,000 -- 36,000 126,095 -- 126,095
Yapi ve Kredi
Bankasi 152,535 -- 152,535(b) 206,077 -- 206,077
-------------------------------------------------------
Total 844,445 -- 844,445
-------------------------------------------------------
UNITED KINGDOM (10.6%)
Aegis Group 134,388 -- 134,388 181,427 -- 181,427
Aggreko 24,285 -- 24,285 207,671 -- 207,671
Atkins WS 7,400 -- 7,400 67,003 -- 67,003
Babcock
International Group -- 85,820 85,820 -- 551,215 551,215
Beazley Group 66,600 -- 66,600 100,011 -- 100,011
BlueBay Asset
Management 1,283 -- 1,283 3,455 -- 3,455
Chemring Group 7,881 15,966 23,847 245,905 495,024 740,929
Chloride Group 102,474 -- 102,474 248,258 -- 248,258
Close Brothers
Group 14,576 24,047 38,623 135,643 222,406 358,049
Connaught -- 30,932 30,932 -- 162,471 162,471
Croda Intl 47,117 -- 47,117 379,214 -- 379,214
Dana Petroleum 15,276 -- 15,276(b) 284,766 -- 284,766
De La Rue 17,653 -- 17,653 251,769 -- 251,769
Domino's Pizza UK &
IRL -- 118,028 118,028 -- 355,297 355,297
eaga 144,130 -- 144,130 285,738 -- 285,738
Electrocomponents 27,000 -- 27,000 63,414 -- 63,414
Eurasian Natural
Resources 7,337 -- 7,337 64,587 -- 64,587
GAME Group 88,062 -- 88,062 258,292 -- 258,292
Halfords Group 21,800 -- 21,800 107,401 -- 107,401
Halma 26,178 -- 26,178 69,036 -- 69,036
Hampson Inds -- 188,061 188,061 -- 275,390 275,390
HMV Group 52,614 -- 52,614 111,508 -- 111,508
IG Group Holdings 38,127 62,765 100,892 124,239 203,277 327,516
Infinity Bio-Energy -- 340,514 340,514(b) -- 20,431 20,431
Intertek Group 5,300 -- 5,300 80,059 -- 80,059
James Fisher & Sons -- 40,076 40,076 -- 262,847 262,847
Jardine Lloyd
Thompson Group 14,800 -- 14,800 96,782 -- 96,782
JD Wetherspoon 16,100 -- 16,100 97,661 -- 97,661
Keller Group 14,200 -- 14,200 125,001 -- 125,001
McBride 71,294 -- 71,294 132,902 -- 132,902
Mears Group 31,413 151,835 183,248 120,835 580,920 701,755
Micro Focus Intl 84,028 -- 84,028 396,573 -- 396,573
Misys 50,200 -- 50,200 103,235 -- 103,235
N Brown Group -- 138,534 138,534 -- 479,594 479,594
Northern Foods 67,100 -- 67,100 61,549 -- 61,549
PayPoint 27,816 -- 27,816 197,124 -- 197,124
Petrofac 5,100 -- 5,100 43,348 -- 43,348
Premier Oil 7,850 -- 7,850(b) 121,249 -- 121,249
PV Crystalox Solar 75,017 -- 75,017 125,137 -- 125,137
PZ Cussons 94,449 -- 94,449 223,577 -- 223,577
Regus 64,200 -- 64,200 73,137 -- 73,137
Restaurant Group 77,698 -- 77,698 184,500 -- 184,500
Rightmove 20,200 59,967 80,167 97,128 286,381 383,509
RM 27,452 -- 27,452 59,297 -- 59,297
Spectris 12,500 -- 12,500 108,927 -- 108,927
Spirax-Sarco
Engineering 5,800 -- 5,800 73,668 -- 73,668
Spirent
Communications 196,800 -- 196,800 164,505 -- 164,505
TelecityGroup 35,639 -- 35,639(b) 139,200 -- 139,200
Tullett Prebon 58,049 -- 58,049 229,521 -- 229,521
Ultra Electronics
Holdings 13,367 34,393 47,760 235,535 601,819 837,354
</Table>
84
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
UNITED KINGDOM (CONT.)
Victrex 15,055 -- 15,055 $ 119,609 $ -- $ 119,609
VT Group 26,171 76,496 102,667 179,658 521,532 701,190
Wellstream Holdings -- 55,808 55,808(b) -- 424,915 424,915
WH Smith 27,335 -- 27,335 169,855 -- 169,855
-------------------------------------------------------
Total 6,948,909 5,443,519 12,392,428
-------------------------------------------------------
UNITED STATES (25.0%)
Akamai Technologies -- 12,500 12,500(b) -- 275,250 275,250
AMCOL Intl -- 12,000 12,000 -- 232,560 232,560
Ameron Intl -- 5,900 5,900 -- 349,103 349,103
AmSurg -- 20,750 20,750(b) -- 426,205 426,205
Anworth Mtge Asset -- 67,800 67,800 -- 435,954 435,954
Applied Industrial
Technologies -- 18,500 18,500 -- 416,250 416,250
AptarGroup -- 11,500 11,500 -- 356,845 356,845
Arena
Pharmaceuticals -- 107,000 107,000(b) -- 300,670 300,670
Ariba -- 25,200 25,200(b) -- 242,172 242,172
ARRIS Group -- 29,500 29,500(b) -- 314,765 314,765
Asyst Technologies -- 78,958 78,958(b) -- 3,395 3,395
Atwood Oceanics -- 4,000 4,000(b) -- 89,280 89,280
Barnes Group -- 23,500 23,500 -- 332,760 332,760
BioCryst
Pharmaceuticals -- 37,400 37,400(b) -- 148,104 148,104
BPZ Resources -- 71,700 71,700(b) -- 390,765 390,765
Brocade
Communications
Sytems -- 74,500 74,500(b) -- 430,610 430,610
Capstead Mtge -- 38,300 38,300 -- 436,237 436,237
Carlisle Companies -- 15,300 15,300 -- 348,075 348,075
Carpenter
Technology -- 16,700 16,700 -- 345,189 345,189
Cato Cl A -- 16,300 16,300 -- 313,286 313,286
Centene -- 15,500 15,500(b) -- 284,735 284,735
Ceradyne -- 17,000 17,000(b) -- 293,080 293,080
Cimarex Energy -- 12,000 12,000 -- 322,800 322,800
Circor Intl -- 13,000 13,000 -- 334,490 334,490
CRA Intl -- 17,000 17,000(b) -- 396,780 396,780
Crane -- 16,000 16,000 -- 369,440 369,440
Cubic -- 11,000 11,000 -- 315,810 315,810
Dollar Financial -- 37,300 37,300(b) -- 376,730 376,730
DSP Group -- 42,000 42,000(b) -- 264,180 264,180
DSW -- 32,100 32,100(b) -- 348,927 348,927
Duff & Phelps Cl A -- 19,100 19,100(b) -- 360,226 360,226
EFJ -- 61,900 61,900(b) -- 39,616 39,616
EMCOR Group -- 20,500 20,500(b) -- 426,195 426,195
Emulex -- 22,900 22,900(b) -- 239,763 239,763
Flowers Foods -- 15,250 15,250 -- 352,275 352,275
Force Protection -- 34,900 34,900 -- 265,938 265,938
GeoEye -- 11,000 11,000(b) -- 273,790 273,790
Grubb & Ellis -- 222,600 222,600(b) -- 207,018 207,018
H&E Equipment
Services -- 42,200 42,200 -- 317,766 317,766
Harris Stratex
Networks -- 36,400 36,400(b) -- 146,328 146,328
Hatteras Financial -- 17,400 17,400(b) -- 418,818 418,818
Highbury Financial -- 37,300 37,300(b) -- 140,807 140,807
ICU Medical -- 1,100 1,100(b) -- 41,360 41,360
Imation -- 39,100 39,100 -- 391,000 391,000
Incyte -- 88,600 88,600(b) -- 209,096 209,096
Investors Real
Estate Trust -- 24,900 24,900 -- 230,325 230,325
Jaguar Mining 17,400 -- 17,400(b) 102,568 -- 102,568
JDA Software Group -- 24,900 24,900 -- 351,339 351,339
Kansas City Life
Insurance -- 8,900 8,900 -- 196,067 196,067
Kirby -- 11,300 11,300(b) -- 348,718 348,718
Knot -- 43,728 43,728(b) -- 396,613 396,613
Lance -- 16,800 16,800 -- 389,088 389,088
</Table>
85
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
UNITED STATES (CONT.)
LHC Group -- 16,500 16,500(b) $ -- $ 376,530 $ 376,530
MAXIMUS -- 7,000 7,000 -- 282,310 282,310
Medicines -- 33,200 33,200(b) -- 331,336 331,336
Mednax -- 11,700 11,700(b) -- 420,030 420,030
MFA Mtge
Investments -- 76,000 76,000 -- 447,640 447,640
NBTY -- 15,000 15,000(b) -- 388,650 388,650
NETGEAR -- 19,500 19,500(b) -- 312,195 312,195
Novatel Wireless -- 40,700 40,700(b) -- 278,795 278,795
Odyssey HealthCare -- 36,700 36,700(b) -- 380,212 380,212
OfficeMax -- 45,100 45,100 -- 335,995 335,995
Oilsands Quest -- 154,400 154,400(b) -- 115,800 115,800
OSI Systems -- 17,800 17,800(b) -- 333,750 333,750
Park
Electrochemical -- 15,300 15,300 -- 315,180 315,180
ParkerVision -- 62,000 62,000(b) -- 173,600 173,600
Plains Exploration
& Production -- 7,000 7,000(b) -- 132,090 132,090
Platinum
Underwriters
Holdings -- 11,980 11,980 -- 344,664 344,664
Portland General
Electric -- 20,000 20,000 -- 365,400 365,400
Prospect Capital -- 38,400 38,400 -- 348,288 348,288
Quidel -- 37,500 37,500(b) -- 436,500 436,500
Regis -- 20,100 20,100 -- 384,714 384,714
Rentech -- 229,900 229,900(b) -- 135,641 135,641
Res-Care -- 26,000 26,000(b) -- 416,520 416,520
Retail Ventures -- 115,200 115,200(b) -- 299,520 299,520
Rigel
Pharmaceuticals -- 57,154 57,154(b) -- 379,503 379,503
RSC Holdings -- 48,900 48,900(b) -- 349,635 349,635
Rudolph
Technologies -- 21,400 21,400(b) -- 111,922 111,922
SeaChange Intl -- 47,700 47,700(b) -- 299,079 299,079
Shutterfly -- 31,800 31,800(b) -- 407,358 407,358
SRA Intl -- 17,200 17,200(b) -- 264,708 264,708
TAL Intl Group -- 41,000 41,000(b) -- 392,780 392,780
Tellabs -- 64,500 64,500(b) -- 337,980 337,980
Textainer Group
Holdings -- 47,500 47,500(b) -- 420,850 420,850
Titanium Asset
Management -- 95,000 95,000(b) -- 498,750 498,750
Trimble Navigation -- 4,200 4,200(b) -- 90,048 90,048
TTM Technologies -- 29,300 29,300(b) -- 217,406 217,406
Unisource Energy -- 13,000 13,000 -- 342,160 342,160
Universal Stainless
& Alloy Products -- 21,200 21,200(b) -- 284,080 284,080
W&T Offshore -- 40,500 40,500 -- 375,840 375,840
Waddell & Reed
Financial -- 6,000 6,000 -- 134,460 134,460
Westar Energy -- 18,000 18,000 -- 315,540 315,540
Whiting Petroleum -- 9,200 9,200(b) -- 301,392 301,392
World Acceptance -- 20,700 20,700(b) -- 614,376 614,376
Zebra Technologies
Cl A -- 16,000 16,000(b) -- 340,000 340,000
Zygo -- 36,804 36,804(b) -- 184,756 184,756
-------------------------------------------------------
Total 102,568 29,254,576 29,357,144
----------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost:
$132,625,406) $42,648,800 $69,619,851 $112,268,651
----------------------------------------------------------------------------------------------------------------------------
<Caption>
CLOSED-END FUNDS (--%)(C)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
CANADA
Cineplex Galaxy
Income Fund 3,600 -- 3,600 $ 43,800 $ -- $ 43,800
----------------------------------------------------------------------------------------------------------------------------
TOTAL CLOSED-END
FUNDS
(Cost: $41,667) $ 43,800 $ -- $ 43,800
----------------------------------------------------------------------------------------------------------------------------
</Table>
86
<Table>
<Caption>
BONDS (0.2%)(C)
PRINCIPAL PRINCIPAL PRINCIPAL
ISSUER COUPON RATE AMOUNT AMOUNT AMOUNT VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
PARTNERS PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
CANADA
Scorpio Mining
Cv 7.00% $-- $238,400 $238,400 $-- $151,360 $151,360
05-05-11
UNITED STATES
Nova Biosource
Fuels 10.00 -- 1,032,000 1,032,000 -- 56,760 56,760
09-30-12
---------------------------------------------------------------------------------------------------------------------------------
TOTAL BONDS
(Cost:
$1,265,886) $-- $208,120 $208,120
---------------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
PREFERRED STOCKS & OTHER (0.2%)(C)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
BRAZIL (0.2%)
Lojas Americanas -- 50,600 50,600 $ -- $ 208,045 $ 208,045
FRANCE (-- %)
Klepierre
Rights -- 13,756 13,756(b) -- -- --
SOUTH KOREA (-- %)
Synopex
Rights 2,477 -- 2,477(b) 1,932 -- 1,932
UNITED STATES (-- %)
Oilsands Quest
Warrants -- 11,750 11,750(b) -- 822 822
Rentech
Warrants -- 7,000 7,000(b) -- 395 395
Titanium Asset
Management
Warrants -- 95,000 95,000(b) -- 61,484 61,484
----------------------------------------------------
Total -- 62,701 62,701
--------------------------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS & OTHER
(Cost: $193,494) $ 1,932 $ 270,746 $ 272,678
--------------------------------------------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (0.3%)
SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RiverSource Short-
Term Cash Fund,
0.28% 386,087 -- 386,087(h) $ 386,087 $ -- $ 386,087
--------------------------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET
FUND
(Cost: $386,087) $ 386,087 $ -- $ 386,087
--------------------------------------------------------------------------------------------------------------------------
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (2.7%)
SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime
Money Market Fund 3,225,398 -- 3,225,398 $ 3,225,398 $ -- $ 3,225,398
--------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
OF CASH COLLATERAL
RECEIVED FOR
SECURITIES ON LOAN
(Cost: $3,225,398) $ 3,225,398 $ -- $ 3,225,398
--------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost:
$137,737,938)(i) $46,306,017 $70,098,717 $116,404,734
--------------------------------------------------------------------------------------------------------------------------
</Table>
87
<Table>
<Caption>
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY
The following table represents the portfolio investments of the Fund by industry classifications as
a percentage of total net assets at April 30, 2009:
PERCENTAGE OF
INDUSTRY NET ASSETS VALUE VALUE VALUE
RIVERSOURCE
PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED)
Aerospace & Defense 2.8% $ 743,431 $ 2,502,655 $ 3,246,086
Air Freight &
Logistics 0.7 223,672 555,197 778,869
Airlines 0.1 99,212 -- 99,212
Auto Components 1.3 724,148 745,676 1,469,824
Automobiles 0.5 249,985 333,948 583,933
Beverages 0.4 487,280 -- 487,280
Biotechnology 1.3 52,012 1,455,613 1,507,625
Building Products 0.5 -- 632,928 632,928
Capital Markets 2.4 951,841 1,839,415 2,791,256
Chemicals 3.0 1,504,473 1,955,052 3,459,525
Commercial Banks 2.1 1,341,228 1,106,674 2,447,902
Commercial Services
& Supplies 4.0 1,853,221 2,863,192 4,716,413
Communications
Equipment 2.2 247,354 2,293,936 2,541,290
Computers &
Peripherals 1.4 667,208 991,839 1,659,047
Construction &
Engineering 3.3 1,637,674 2,224,879 3,862,553
Construction
Materials 0.7 566,002 233,198 799,200
Consumer Finance 1.0 142,281 991,106 1,133,387
Containers &
Packaging 0.5 248,431 356,845 605,276
Diversified
Consumer Services 0.7 -- 813,471 813,471
Diversified
Financial Services 1.1 424,494 889,476 1,313,970
Diversified
Telecommunication
Services 0.4 492,107 -- 492,107
Electric Utilities 1.3 452,451 1,023,100 1,475,551
Electrical
Equipment 1.2 1,019,684 407,461 1,427,145
Electronic
Equipment,
Instruments &
Components 1.7 534,479 1,472,351 2,006,830
Energy Equipment &
Services 1.3 370,989 1,159,994 1,530,983
Food & Staples
Retailing 1.6 991,540 871,343 1,862,883
Food Products 3.0 1,226,861 2,238,671 3,465,532
Gas Utilities 0.3 313,575 -- 313,575
Health Care
Equipment &
Supplies 2.9 1,240,218 2,196,643 3,436,861
Health Care
Providers &
Services 3.2 1,018,349 2,682,104 3,700,453
Health Care
Technology 0.1 49,263 -- 49,263
Hotels, Restaurants
& Leisure 1.6 1,037,489 847,982 1,885,471
Household Durables 1.1 1,247,425 -- 1,247,425
Household Products 0.4 403,430 -- 403,430
Independent Power
Producers & Energy
Traders 0.7 246,343 571,749 818,092
Industrial
Conglomerates 0.6 350,952 348,075 699,027
Insurance 2.2 1,374,336 1,234,011 2,608,347
Internet & Catalog
Retail 0.9 117,476 886,952 1,004,428
Internet Software &
Services 1.8 1,212,541 898,213 2,110,754
IT Services 1.3 911,742 572,699 1,484,441
Leisure Equipment &
Products 0.4 445,692 -- 445,692
Life Sciences Tools
& Services 1.5 304,611 1,413,664 1,718,275
Machinery 4.0 1,835,985 2,850,196 4,686,181
Marine 1.0 374,086 749,547 1,123,633
Media 1.5 1,465,722 286,381 1,752,103
Metals & Mining 3.1 1,474,103 2,184,288 3,658,391
Multiline Retail 0.6 167,900 507,565 675,465
Multi-Utilities 0.1 103,337 -- 103,337
Office Electronics 0.3 -- 340,000 340,000
Oil, Gas &
Consumable Fuels 4.6 1,062,972 4,277,178 5,340,150
Paper & Forest
Products 0.1 50,658 -- 50,658
Personal Products 0.9 125,615 953,987 1,079,602
Pharmaceuticals 1.6 982,850 915,476 1,898,326
Professional
Services 1.1 506,563 757,006 1,263,569
Real Estate
Investment Trusts
(REITs) 2.1 -- 2,490,578 2,490,578
Real Estate
Management &
Development 1.1 594,580 719,828 1,314,408
Semiconductors &
Semiconductor
Equipment 3.0 1,053,965 2,434,894 3,488,859
</Table>
88
<Table>
<Caption>
SUMMARY OF INVESTMENTS IN SECURITIES BY INDUSTRY (CONTINUED)
PERCENTAGE OF
INDUSTRY (CONT.) NET ASSETS VALUE VALUE VALUE
RIVERSOURCE
PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED)
Software 3.5% $ 1,539,132 $ 2,587,322 $ 4,126,454
Specialty Retail 3.9 1,880,697 2,616,884 4,497,581
Textiles, Apparel &
Luxury Goods 1.2 274,492 1,103,030 1,377,522
Thrifts & Mortgage
Finance 0.1 129,271 -- 129,271
Trading Companies &
Distributors 1.8 230,865 1,897,281 2,128,146
Transportation
Infrastructure 0.8 521,315 448,583 969,898
Water Utilities 0.4 95,425 368,581 464,006
Wireless
Telecommunication
Services 0.6 699,499 -- 699,499
Other(1) 3.1 3,611,485 -- 3,611,485
---------------------------------------------------------------------------------------------------
Total $46,306,017 $70,098,717 $116,404,734
---------------------------------------------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
<Table>
<Caption>
INVESTMENTS IN DERIVATIVES
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT APRIL 30, 2009
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
CURRENCY TO BE CURRENCY TO BE UNREALIZED UNREALIZED
EXCHANGE DATE DELIVERED RECEIVED APPRECIATION DEPRECIATION
-----------------------------------------------------------------------------------------------------------------------------
May 1, 2009 96,753 141,259 $-- $(1,885)
British Pound U.S. Dollar
-----------------------------------------------------------------------------------------------------------------------------
May 4, 2009 251,121 32,401 -- (3)
Hong Kong Dollar U.S. Dollar
-----------------------------------------------------------------------------------------------------------------------------
May 5, 2009 98,573 157,167 -- (270)
U.S. Dollar Turkish Lira
-----------------------------------------------------------------------------------------------------------------------------
May 6, 2009 985,523 113,321 -- (3,053)
South African Rand U.S. Dollar
-----------------------------------------------------------------------------------------------------------------------------
May 6, 2009 57,308 43,330 32 --
U.S. Dollar European Monetary Unit
-----------------------------------------------------------------------------------------------------------------------------
May 7, 2009 280,315 32,997 -- (96)
South African Rand U.S. Dollar
-----------------------------------------------------------------------------------------------------------------------------
May 7, 2009 110,883 10,696,852 -- (2,391)
U.S. Dollar Japanese Yen
-----------------------------------------------------------------------------------------------------------------------------
May 8, 2009 580,016 68,440 -- (86)
South African Rand U.S. Dollar
-----------------------------------------------------------------------------------------------------------------------------
Total $32 $(7,784)
-----------------------------------------------------------------------------------------------------------------------------
</Table>
89
<Table>
<Caption>
INVESTMENTS IN DERIVATIVES (CONTINUED)
FORWARD FOREIGN CURRENCY CONTRACTS OPEN (CONTINUED)
SELIGMAN GLOBAL SMALLER COMPANIES FUND
CURRENCY TO BE CURRENCY TO BE UNREALIZED UNREALIZED
EXCHANGE DATE DELIVERED RECEIVED APPRECIATION DEPRECIATION
-------------------------------------------------------------------------------------------------------------------------------
May 1, 2009 16,162 23,657 $ -- $ (252)
British Pounds U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
May 1, 2009 11,276,416 116,602 2,260 --
Japanese Yen U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
May 4, 2009 265,746 34,290 -- --
Hong Kong Dollars U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
May 5, 2009 103,010 137,260 967 --
European Monetary Unit U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
May 5, 2009 131,781 1,021,306 -- (1)
U.S. Dollar Hong Kong Dollar
-------------------------------------------------------------------------------------------------------------------------------
May 6, 2009 187,019 141,040 -- (409)
U.S. Dollar European Monetary Unit
-------------------------------------------------------------------------------------------------------------------------------
May 7, 2009 113,652 10,944,816 -- (2,672)
U.S. Dollar Japanese Yen
-------------------------------------------------------------------------------------------------------------------------------
May 8, 2009 37,153 3,644,957 -- (194)
U.S. Dollar Japanese Yen
-------------------------------------------------------------------------------------------------------------------------------
Total $3,227 $ (3,528)
-------------------------------------------------------------------------------------------------------------------------------
Pro forma Combined Total $3,259 $(11,312)
-------------------------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO COMBINED PORTFOLIO OF INVESTMENTS
(a) Securities are valued by policies described in Note 1 and/or 2 to the
financial statements in the annual report.
(b) Non-income producing.
(c) Foreign security values are stated in U.S. dollars.
(d) Negligible market value.
(e) Security valued by management at fair value according to procedures
approved, in good faith, by the Board.
(f) At April 30, 2009, security was partially or fully on loan. See Note 5 to
the financial statements.
(g) Identifies issues considered to be illiquid as to their marketability (see
Note 1 to the financial statements). The aggregate value of such securities
at April 30, 2009, was $0. Information concerning such security holdings at
April 30, 2009, is as follows:
<Table>
<Caption>
SECURITY ACQUISITION DATES COST
-------------------------------------------------------------------------------------------------
Peace Mark Holdings 06-04-08 $102,024
</Table>
(h) Affiliated Money Market Fund -- See Note 5 to the financial statements in
the annual report. The rate shown is the seven-day current annualized yield
at April 30, 2009.
(i) At April 30, 2009, the approximate cost of securities for federal income tax
purposes and the approximate aggregate gross unrealized appreciation and
depreciation based on that cost was:
<Table>
<Caption>
RIVERSOURCE
PARTNERS
RIVERSOURCE SELIGMAN INTERNATIONAL
PARTNERS GLOBAL SMALL CAP FUND
INTERNATIONAL SMALLER PRO FORMA
SMALL CAP FUND COMPANIES FUND COMBINED
Cost of securities for federal income tax purposes: $ 53,402,000 $ 84,336,000 $137,738,000
Unrealized appreciation $ 3,022,000 $ 6,024,000 $ 9,046,000
Unrealized depreciation (10,117,000) (20,263,000) (30,380,000)
---------------------------------------------------------------------------------------------------------
Net unrealized depreciation $ (7,095,000) $(14,239,000) $(21,334,000)
---------------------------------------------------------------------------------------------------------
</Table>
The industries identified above are based on the Global Industry Classification
Standard (GICS), which was developed by and is the exclusive property of Morgan
Stanley Capital International Inc. and Standard & Poor's, a division of The
McGraw-Hill Companies, Inc.
90
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (BUYING FUND)
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND (SELLING FUND)
INTRODUCTION TO PROPOSED FUND REORGANIZATION
June 30, 2009
The accompanying unaudited pro forma combining statement of assets and
liabilities and the statement of operations reflect the accounts of the two
funds at, and for, the 12-month period ending June 30, 2009. These statements
have been derived from financial statements prepared for the RiverSource
Government Money Market Fund and the RiverSource Tax-Exempt Money Market Fund as
of June 30, 2009. RiverSource Government Money Market Fund invests primarily in
high-quality, short-term money market securities that are issued or guaranteed
by the U.S. government, its agencies or instrumentalities. RiverSource Tax-
Exempt Money Market Fund invests primarily in short-term debt obligations whose
interest is exempt from federal income taxes.
Under the proposed Agreement and Plan of Reorganization, share classes of
RiverSource Tax-Exempt Money Market Fund would be exchanged for share classes of
RiverSource Government Money Market Fund.
<Table>
<Caption>
SELLING FUND BUYING FUND
-----------------------------------------------------------------------------------------------------
RiverSource Tax-Exempt Money Market Fund Class A* RiverSource Government Money Market Fund Class A
-----------------------------------------------------------------------------------------------------
</Table>
* The single class of shares of RiverSource Tax-Exempt Money Market Fund is
referred to as Class A.
Note: RiverSource Government Money Market Fund also offers Class B, Class C,
Class R2 and Class R5 shares.
The pro forma combining statements have been prepared to give effect to the
proposed transaction on the historical operations of the accounting survivor,
RiverSource Government Money Market Fund, as if the transaction had occurred at
the beginning of the fiscal year ending June 30, 2009.
91
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (BUYING FUND)
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF ASSETS AND LIABILITIES
<Table>
<Caption>
RIVERSOURCE RIVERSOURCE
GOVERNMENT GOVERNMENT
RIVERSOURCE RIVERSOURCE MONEY MARKET MONEY MARKET
GOVERNMENT TAX-EXEMPT FUND FUND
MONEY MARKET MONEY MARKET PRO FORMA PRO FORMA
FUND FUND ADJUSTMENTS COMBINED
JUNE 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
ASSETS
Investments in securities, at cost
Unaffiliated issuers $134,286,900 $90,976,474 $ -- $225,263,374
Affiliated money market fund $ -- $ 2,991,937 $ -- $ 2,991,937
----------------------------------------------------------------
Investments in securities, at value
Unaffiliated issuers $134,286,900 $90,976,474 $ -- $225,263,374
Affiliated money market fund $ -- $ 2,991,937 $ -- $ 2,991,937
Cash 240,846 305,120 -- 545,966
Capital shares receivable 305,364 174,787 -- 480,151
Dividends and accrued interest receivable -- 92,668 -- 92,668
Receivable for investment securities sold -- 480,000 -- 480,000
Prepaid expense -- 11,493 -- 11,493
Other assets 4,456 -- -- 4,456
----------------------------------------------------------------------------------------------------------------------
Total assets 134,837,566 95,032,479 -- 229,870,045
----------------------------------------------------------------------------------------------------------------------
LIABILITIES
Dividends payable to shareholders 21,887 148 -- 22,035
Capital shares payable 529,616 385,489 -- 915,105
Accrued investment management services fees 1,213 858 -- 2,071
Accrued distribution fees 6,858 16,642 -- 23,500
Accrued transfer agency fees 163,453 273 -- 163,726
Accrued administrative services fees 221 156 -- 377
Accrued plan administration services fees 368 -- -- 368
Other accrued expenses 38,788 57,777 -- 96,565
----------------------------------------------------------------------------------------------------------------------
Total liabilities 762,404 461,343 -- 1,223,747
----------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $134,075,162 $94,571,136 $ -- $228,646,298
----------------------------------------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value (Note 3) $ 1,340,840 $ 946,037 $ (326) $ 2,286,551
Additional paid-in capital (Note 3) 132,734,322 93,625,638 326 226,360,286
Accumulated net realized gain (loss) -- (539) -- (539)
----------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding capital stock $134,075,162 $94,571,136 $ -- $228,646,298
----------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding
shares: Class A $107,965,547 $94,571,136 $ -- $202,536,683
Class B $ 5,586,167 $ -- $ -- $ 5,586,167
Class C $ 14,946,130 $ -- $ -- $ 14,946,130
Class R2 $ 2,978,274 $ -- $ -- $ 2,978,274
Class R5 $ 2,599,044 $ -- $ -- $ 2,599,044
Shares outstanding
(Note 3): Class A shares 107,976,833 94,603,728 (32,592) 202,547,969
Class B shares 5,584,264 -- -- 5,584,264
Class C shares 14,945,234 -- -- 14,945,234
Class R2 shares 2,978,311 -- -- 2,978,311
Class R5 shares 2,599,351 -- -- 2,599,351
Net asset value per share of outstanding capital
stock: Class A $ 1.00 $ 1.00 $ -- $ 1.00
Class B $ 1.00 $ -- $ -- $ 1.00
Class C $ 1.00 $ -- $ -- $ 1.00
Class R2 $ 1.00 $ -- $ -- $ 1.00
Class R5 $ 1.00 $ -- $ -- $ 1.00
----------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
92
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (BUYING FUND)
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND (SELLING FUND)
PRO FORMA COMBINING
STATEMENT OF OPERATIONS
<Table>
<Caption>
RIVERSOURCE RIVERSOURCE GOVERNMENT RIVERSOURCE
GOVERNMENT TAX-EXEMPT MONEY MARKET GOVERNMENT MONEY
MONEY MARKET MONEY MARKET FUND PRO FORMA MARKET FUND PRO
FUND FUND ADJUSTMENTS FORMA COMBINED
YEAR ENDED JUNE 30, 2009 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
INVESTMENT INCOME
Income:
Interest $ 1,755,075 $1,551,388 $ -- $3,306,463
Income distributions from affiliated money
market fund -- 6,374 -- 6,374
---------------------------------------------------------------------------------------------------------------
Total income 1,755,075 1,557,762 -- 3,312,837
---------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees (Note 2) 784,465 417,822 (147,277)(a) 1,055,010
Distribution fees (Note 2)
Class A 27,183 126,614 122,726(b) 276,523
Class B 67,186 -- -- 67,186
Class C 159,112 -- -- 159,112
Class R2 5,441 -- -- 5,441
Transfer agency fees (Note 2)
Class A 724,349 105,351 (415,492)(c) 414,208
Class B 35,078 -- (20,598)(c) 14,480
Class C 84,908 -- (50,627)(c) 34,281
Class R2 11,286 -- (10,202)(c) 1,084
Class R5 34,372 -- (25,290)(c) 9,082
Administrative services fees (Note 2) 4,256 75,968 111,596(d) 191,820
Plan administration services fees -- Class R2
(Note 2) 368 -- 5,054(e) 5,422
Compensation of board members 22,007 3,806 -- 25,813
Custodian fees 71,189 18,880 -- 90,069
Printing and postage 72,349 29,660 -- 102,009
Registration fees (Note 2) 113,221 46,813 (23,407)(f) 136,627
Professional fees (Note 2) 38,610 32,455 (30,575)(g) 40,490
Temporary guarantee program participation fees
(Note 2) -- 27,333 (27,333)(h) --
Other 93,623 21,227 -- 114,850
---------------------------------------------------------------------------------------------------------------
Total expenses 2,349,003 905,929 (511,425) 2,743,507
Expenses waived/reimbursed by RiverSource
Investments, LLC (Note 2) (1,219,147) (164,797) 873,871(i) (510,073)
Earnings and bank fee credits on cash
balances (Note 2) -- (2,178) 2,178(j) --
---------------------------------------------------------------------------------------------------------------
Total net expenses 1,129,856 738,954 364,624 2,233,434
---------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net 625,219 818,808 (364,624) 1,079,403
---------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on security
transactions -- 22,390 -- 22,390
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities in
foreign currencies -- (360) -- (360)
---------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments and foreign
currencies -- 22,030 -- 22,030
---------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $ 625,219 $ 840,838 $(364,624) $1,101,433
---------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
93
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (BUYING FUND)
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND (SELLING FUND)
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited as to June 30, 2009)
1. BASIS OF COMBINATION
The unaudited pro forma combining statement of assets and liabilities and the
statement of operations reflect the accounts of the two funds at, and for, the
12-month period ending June 30, 2009. These statements have been derived from
financial statements prepared for the RiverSource Government Money Market Fund
and the RiverSource Tax-Exempt Money Market Fund as of June 30, 2009.
Each Fund is registered under the Investment Company Act of 1940 (as amended) as
a diversified, open-end management investment company. The primary investments
of each Fund are as follows:
RiverSource Government Money Market Fund invests primarily in high-quality,
short-term money market securities that are issued or guaranteed by the U.S.
government, its agencies or instrumentalities.
RiverSource Tax-Exempt Money Market Fund invests primarily in short-term debt
obligations whose interest is exempt from federal income taxes.
The pro forma statements give effect to the proposed transfer of the assets and
liabilities of RiverSource Tax-Exempt Money Market Fund in exchange for Class A
shares of RiverSource Government Money Market Fund under U.S. generally accepted
accounting principles. The pro forma statements reflect estimates for the
combined RiverSource Government Money Market Fund based on the increased asset
level of the Reorganization and associated economies of scale, adjusted to
reflect current fees.
The pro forma combining statements should be read in conjunction with the
historical financial statements of the funds incorporated by reference in the
Statement of Additional Information.
The pro forma statement of operations give effect to the proposed transaction on
the historical operations of the accounting survivor, RiverSource Government
Money Market Fund, as if the transaction had occurred at the beginning of the
year presented.
2. PRO FORMA ADJUSTMENTS
(a) To reflect the change in investment management services fees due to the
Reorganization.
(b) To reflect the change in distribution fees due to the Reorganization.
(c) To reflect the change in transfer agent fess due to the Reorganization
including adjusting for closed account fees for each RiverSource Tax-Exempt
Money Market Fund shareholder account that will be closed on the system as a
result of the Reorganization.
(d) To reflect the change in administrative services fees due to the
Reorganization.
(e) To reflect the change in plan administration services fees due to the
Reorganization.
(f) To reflect the reduction in registration fees due to the Reorganization.
(g) To reflect the reduction in audit fees due to the Reorganization.
(h) To reflect the elimination of the fees related to the U.S. Department of
Treasury's Temporary Guarantee Program for Money Market Funds, which expired
after the close of business on Sept. 18, 2009.
(i) To adjust the expense reimbursement to reflect the net reduction in fees
resulting from the Reorganization per the agreement (through April 30, 2010)
by RiverSource Investments, LLC and its affiliates to waive certain fees and
absorb certain expenses of the combined fund.
(j) To reflect the elimination of the earnings and bank fee credits on cash
balances.
94
3. CAPITAL SHARES
The pro forma net asset value per share assumes the issuance of additional Class
A shares of RiverSource Government Money Market Fund at June 30, 2009, in
connection with the Reorganization. The following table reflects the number of
RiverSource Government Money Market Fund shares assumed to be issued to the
shareholders of the RiverSource Tax-Exempt Money Market Fund.
<Table>
<Caption>
RIVERSOURCE TAX-EXEMPT RIVERSOURCE GOVERNMENT
MONEY MARKET FUND MONEY MARKET FUND TOTAL PRO FORMA
SHARES ISSUED SHARES OUTSTANDING SHARES OUTSTANDING
----------------------------------------------------------------------------------------------------------------------
Class A 94,571,136 107,976,833 202,547,969
----------------------------------------------------------------------------------------------------------------------
Class B N/A 5,584,264 5,584,264
----------------------------------------------------------------------------------------------------------------------
Class C N/A 14,945,234 14,945,234
----------------------------------------------------------------------------------------------------------------------
Class R2 N/A 2,978,311 2,978,311
----------------------------------------------------------------------------------------------------------------------
Class R5 N/A 2,599,351 2,599,351
----------------------------------------------------------------------------------------------------------------------
</Table>
95
COMBINED PORTFOLIO OF INVESTMENTS
RiverSource Government Money Market Fund
JUNE 30, 2009
(Percentages represent value of investments compared to net assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
U.S. GOVERNMENT AGENCIES (30.3%)
AMOUNT AMOUNT AMOUNT
EFFECTIVE PAYABLE PAYABLE PAYABLE
ISSUER YIELD AT MATURITY AT MATURITY AT MATURITY VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
GOVERNMENT GOVERNMENT
RIVERSOURCE RIVERSOURCE MONEY RIVERSOURCE RIVERSOURCE MONEY
GOVERNMENT TAX-EXEMPT MARKET FUND GOVERNMENT TAX-EXEMPT MARKET FUND
MONEY MONEY PRO FORMA MONEY MONEY PRO FORMA
MARKET FUND MARKET FUND COMBINED MARKET FUND MARKET FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
Federal Home Loan Bank Disc Nts
07/01/09 0.01% $49,300,000 $-- $49,300,000 $49,300,000 $-- $49,300,000
Federal Home Loan Mtge Corp Disc Nts
08/12/09 0.13 20,000,000 -- 20,000,000 19,996,967 -- 19,996,967
-------------------------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCIES
(Cost: $69,296,967) $69,296,967 $-- $69,296,967
-------------------------------------------------------------------------------------------------------------------
<Caption>
FDIC-INSURED DEBT (28.4%)(B)
AMOUNT AMOUNT AMOUNT
EFFECTIVE PAYABLE PAYABLE PAYABLE
ISSUER YIELD AT MATURITY AT MATURITY AT MATURITY VALUE(a) Value(a) Value(a)
Citigroup Funding FDIC Govt Guaranty
07/01/09 0.23% $50,000,000 $-- $50,000,000 $49,993,333 -- $49,993,333
08/04/09 0.24 15,000,000 -- 15,000,000 14,996,600 -- 14,996,600
-------------------------------------------------------------------------------------------------------------------
TOTAL FDIC-INSURED DEBT
(Cost: $64,989,933) $64,989,933 $-- $64,989,933
-------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MUNICIPAL NOTES (37.6%)
Amount Amount Amount
Effective payable payable payable
ISSUE(c,d) yield at maturity at maturity at maturity Value(a) Value(a) Value(a)
ALABAMA (1.7%)
Columbia Industrial Development Board
Refunding Revenue Bonds
Alabama Power Company Project
V.R.D.N. Series 1995E
10/01/22 0.35% $ -- $4,000,000 $4,000,000(e) $-- $ 4,000,000 $ 4,000,000
----------------------------------------------
ALASKA (1.7%)
City of Valdez
Refunding Revenue Bonds
Exxon Mobil Project
V.R.D.N. Series 2001
12/01/29 0.11 -- 1,700,000 1,700,000(e) -- 1,700,000 1,700,000
City of Valdez
Refunding Revenue Bonds
Exxon Pipeline Company Project
V.R.D.N. Series 1993B
12/01/33 0.17 -- 2,300,000 2,300,000(e) -- 2,300,000 2,300,000
----------------------------------------------
Total -- 4,000,000 4,000,000
----------------------------------------------
ARIZONA (1.5%)
Salt River Project Agricultural
C.P.
07/06/09 0.23 -- 1,000,000 1,000,000 -- 1,000,000 1,000,000
07/06/09 0.28 -- 2,450,000 2,450,000 -- 2,450,000 2,450,000
----------------------------------------------
Total -- 3,450,000 3,450,000
----------------------------------------------
</Table>
96
<Table>
<Caption>
MUNICIPAL NOTES (CONTINUED)
AMOUNT AMOUNT AMOUNT
EFFECTIVE PAYABLE PAYABLE PAYABLE
ISSUE(C,D) YIELD AT MATURITY AT MATURITY AT MATURITY VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
GOVERNMENT GOVERNMENT
RIVERSOURCE RIVERSOURCE MONEY RIVERSOURCE RIVERSOURCE MONEY
GOVERNMENT TAX-EXEMPT MARKET FUND GOVERNMENT TAX-EXEMPT MARKET FUND
MONEY MONEY PRO FORMA MONEY MONEY PRO FORMA
MARKET FUND MARKET FUND COMBINED MARKET FUND MARKET FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
CALIFORNIA (3.7%)
California Pollution Control Financing Authority
Refunding Revenue Bonds
Pacific Gas & Electric Company
V.R.D.N. Series 1996F (JP Morgan Chase & Co)
11/01/26 0.13% $ -- $2,000,000 $2,000,000(e) $-- $ 2,000,000 $ 2,000,000
California State Department of Water Resources
Revenue Bonds
V.R.D.N. Series 2002B-3 (Bank of New York)
05/01/22 0.13 -- 4,000,000 4,000,000(e) -- 4,000,000 4,000,000
Los Angeles County Metroplitan Transportation Authority
Refunding Revenue Bonds
Proposition C V.R.D.N. 2nd Sr Series 2009A-2
(JP Morgan Chase Bank)
07/01/23 0.18 -- 2,135,000 2,135,000(e) -- 2,135,000 2,135,000
----------------------------------------------
Total -- 8,135,000 8,135,000
----------------------------------------------
COLORADO (0.9%)
Colorado Educational & Cultural Facilities Authority
Revenue Bonds
Clyford Still
Museum Project
V.R.D.N. Series 2008 (Wells Fargo Bank)
12/01/38 0.27 -- 2,000,000 2,000,000(e) -- 2,000,000 2,000,000
----------------------------------------------
CONNECTICUT (1.6%)
Connecticut State Health & Educational Facility Authority
Revenue Bonds
Yale University
V.R.D.N. Series 2001-V2
07/01/36 0.15 -- 1,800,000 1,800,000(e) -- 1,800,000 1,800,000
Connecticut State Health & Educational Facility Authority
Revenue Bonds
Yale University
V.R.D.N. Series 2005-Y2
07/01/35 0.15 -- 800,000 800,000(e) -- 800,000 800,000
Connecticut State Health & Educational Facility Authority
Revenue Bonds
Yale University
V.R.D.N. Series 2005-Y3
07/01/35 0.15 -- 1,090,000 1,090,000(e) -- 1,090,000 1,090,000
----------------------------------------------
Total -- 3,690,000 3,690,000
----------------------------------------------
ILLINOIS (0.6%)
Illinois Finance Authority
Refunding Revenue Bonds
Amoco Oil Company Project
V.R.D.N. Series 1994
11/01/12 0.25 -- 300,000 300,000(e) -- 300,000 300,000
Illinois International District
Refunding Revenue Bonds
V.R.D.N. Series 2003 (LaSalle Bank)
01/01/23 1.55 -- 1,000,000 1,000,000(e) -- 1,000,000 1,000,000
----------------------------------------------
Total -- 1,300,000 1,300,000
----------------------------------------------
</Table>
97
<Table>
<Caption>
MUNICIPAL NOTES (CONTINUED)
AMOUNT AMOUNT AMOUNT
EFFECTIVE PAYABLE PAYABLE PAYABLE
ISSUE(C,D) YIELD AT MATURITY AT MATURITY AT MATURITY VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
GOVERNMENT GOVERNMENT
RIVERSOURCE RIVERSOURCE MONEY RIVERSOURCE RIVERSOURCE MONEY
GOVERNMENT TAX-EXEMPT MARKET FUND GOVERNMENT TAX-EXEMPT MARKET FUND
MONEY MONEY PRO FORMA MONEY MONEY PRO FORMA
MARKET FUND MARKET FUND COMBINED MARKET FUND MARKET FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
INDIANA (1.1%)
City of Hammond
Refunding Revenue Bonds
Amoco Oil Company Project
V.R.D.N. Series 1994
02/01/22 0.35% $ -- $ 300,000 $ 300,000(e) $-- $ 300,000 $ 300,000
Purdue University
Revenue Bonds
Student Facilities Systems
V.R.D.N. Series 2004A
07/01/33 0.18 -- 1,300,000 1,300,000(e) -- 1,300,000 1,300,000
Purdue University
Revenue Bonds
Student Fees
V.R.D.N. Series 2005V
07/01/27 0.18 -- 890,000 890,000(e) -- 890,000 890,000
----------------------------------------------
Total -- 2,490,000 2,490,000
----------------------------------------------
KENTUCKY (2.0%)
City of Newport
Revenue Bonds
V.R.D.N. Series 2002 (U.S. Bank)
04/01/32 0.30 -- 2,000,000 2,000,000(e) -- 2,000,000 2,000,000
Kentucky Economic Development Finance Authority
Revenue Bonds
Baptist Healthcare System
V.R.D.N. Series 2009-B1 (JP Morgan Chase Bank)
08/15/38 0.35 -- 2,500,000 2,500,000(e) -- 2,500,000 2,500,000
----------------------------------------------
Total -- 4,500,000 4,500,000
----------------------------------------------
MARYLAND (1.3%)
Maryland Health & Higher Education
C.P.
07/01/09 0.30 -- 3,000,000 3,000,000 -- 3,000,000 3,000,000
----------------------------------------------
MASSACHUSETTS (1.7%)
Massachusetts Health & Educational Facilities Authority
Revenue Bonds
Harvard University
V.R.D.N. Series 1999R
11/01/49 0.15 -- 4,000,000 4,000,000(e) -- 4,000,000 4,000,000
----------------------------------------------
MICHIGAN (1.7%)
University of Michigan
Refunding Revenue Bonds
University of Michigan Hospitals
V.R.D.N. Series 1992A
12/01/19 0.28 -- 4,000,000 4,000,000(e) -- 4,000,000 4,000,000
----------------------------------------------
</Table>
98
<Table>
<Caption>
MUNICIPAL NOTES (CONTINUED)
AMOUNT AMOUNT AMOUNT
EFFECTIVE PAYABLE PAYABLE PAYABLE
ISSUE(C,D) YIELD AT MATURITY AT MATURITY AT MATURITY VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
GOVERNMENT GOVERNMENT
RIVERSOURCE RIVERSOURCE MONEY RIVERSOURCE RIVERSOURCE MONEY
GOVERNMENT TAX-EXEMPT MARKET FUND GOVERNMENT TAX-EXEMPT MARKET FUND
MONEY MONEY PRO FORMA MONEY MONEY PRO FORMA
MARKET FUND MARKET FUND COMBINED MARKET FUND MARKET FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
MINNESOTA (5.1%)
Center City
Revenue Bonds
Hazelden Foundation Project
V.R.D.N. Series 2005 (Bank of New York)
11/01/35 0.30% $ -- $4,000,000 $4,000,000(e) $-- $ 4,000,000 $ 4,000,000
City of Arden Hills
Refunding Revenue Bonds
Presbyterian Homes
V.R.D.N. Series 1999A (U.S. Bank)
09/01/29 0.25 -- 2,000,000 2,000,000(e) -- 2,000,000 2,000,000
City of Arden Hills
Revenue Bonds
Presbyterian Homes
V.R.D.N. Series 1999B (U.S. Bank)
09/01/29 0.25 -- 2,005,000 2,005,000(e) -- 2,005,000 2,005,000
Southern Minnesota Municipal Power
C.P.
07/06/09 0.43 -- 3,500,000 3,500,000 -- 3,500,000 3,500,000
----------------------------------------------
Total -- 11,505,000 11,505,000
----------------------------------------------
MISSISSIPPI (1.2%)
County of Jackson
Refunding Revenue Bonds
Chevron USA Incorporated Project
V.R.D.N. Series 1993
06/01/23 0.15 -- 2,700,000 2,700,000(e) -- 2,700,000 2,700,000
----------------------------------------------
NEW HAMPSHIRE (1.7%)
New Hampshire Health & Education Facilities Authority
Revenue Bonds
Darmouth College
V.R.D.N. Series 2007A (JP Morgan Chase Bank)
06/01/31 0.25 -- 3,995,000 3,995,000(e) -- 3,995,000 3,995,000
----------------------------------------------
NEW MEXICO (1.7%)
City of Farmington
Refunding Revenue Bonds
Arizona Public Service Company
V.R.D.N. Series 1994B (Barclays Bank)
09/01/24 0.33 -- 4,000,000 4,000,000(e) -- 4,000,000 4,000,000
----------------------------------------------
OHIO (0.6%)
Kent State University
Revenue Bonds
V.R.D.N. Series 2009 (JP Morgan Chase Bank)
05/01/31 0.18 -- 1,300,000 1,300,000(e) -- 1,300,000 1,300,000
----------------------------------------------
PENNSYLVANIA (0.2%)
Pennsylvania State Higher Educational Facilities Authority
Refunding Revenue Bonds
Carnegie Mellon University
V.R.D.N. Series 1995C (Morgan Guaranty Trust)
11/01/29 0.18 -- 500,000 500,000(e) -- 500,000 500,000
----------------------------------------------
</Table>
99
<Table>
<Caption>
MUNICIPAL NOTES (CONTINUED)
AMOUNT AMOUNT AMOUNT
EFFECTIVE PAYABLE PAYABLE PAYABLE
ISSUE(C,D) YIELD AT MATURITY AT MATURITY AT MATURITY VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
GOVERNMENT GOVERNMENT
RIVERSOURCE RIVERSOURCE MONEY RIVERSOURCE RIVERSOURCE MONEY
GOVERNMENT TAX-EXEMPT MARKET FUND GOVERNMENT TAX-EXEMPT MARKET FUND
MONEY MONEY PRO FORMA MONEY MONEY PRO FORMA
MARKET FUND MARKET FUND COMBINED MARKET FUND MARKET FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
RHODE ISLAND (0.4%)
Rhode Island Health & Educational Building Corporation
Revenue Bonds
Brown University
V.R.D.N. Series 2003B
09/01/43 0.17% $ -- $ 200,000 $ 200,000(e) $-- $ 200,000 $ 200,000
Rhode Island Health & Educational Building Corporation
Revenue Bonds
Brown University
V.R.D.N. Series 2005A
05/01/35 0.30 -- 800,000 800,000(e) -- 800,000 800,000
----------------------------------------------
Total -- 1,000,000 1,000,000
----------------------------------------------
TENNESSEE (3.0%)
Clarksville Public Building Authority
Revenue Bonds
Pooled Financing
Tennessee Municipal Bond Fund
V.R.D.N. Series 2001 (Bank of America)
07/01/31 0.32 -- 1,445,000 1,445,000(e) -- 1,445,000 1,445,000
Clarksville Public Building Authority
Revenue Bonds
Pooled Financing
Tennessee Municipal Bond Fund
V.R.D.N. Series 2004 (Bank of America)
07/01/34 0.32 -- 2,055,000 2,055,000(e) -- 2,055,000 2,055,000
Montgomery County Public Building Authority
Revenue Bonds
Tennessee County Loan Pool
V.R.D.N. Series 2002 (Bank of America)
04/01/32 0.32 -- 1,755,000 1,755,000(e) -- 1,755,000 1,755,000
Montgomery County Public Building Authority
Revenue Bonds
Tennessee County Loan Pool
V.R.D.N. Series 2006 (Bank of America)
02/01/36 0.32 -- 1,510,000 1,510,000(e) -- 1,510,000 1,510,000
----------------------------------------------
Total -- 6,765,000 6,765,000
----------------------------------------------
TEXAS (3.1%)
Port of Port Arthur Navigation District
Refunding Revenue Bonds
Texaco Incorporated Project
V.R.D.N. Series 1994
10/01/24 0.30 -- 1,100,000 1,100,000(e) -- 1,100,000 1,100,000
San Antonio Texas Electric & Gas
C.P.
07/07/09 0.20 -- 3,000,000 3,000,000 -- 3,000,000 3,000,000
State of Texas
Limited General Obligation Notes
T.R.A.N. Series 2008
08/28/09 1.62 -- 3,000,000 3,000,000 -- 3,006,474 3,006,474
----------------------------------------------
Total -- 7,106,474 7,106,474
----------------------------------------------
</Table>
100
<Table>
<Caption>
MUNICIPAL NOTES (CONTINUED)
AMOUNT AMOUNT AMOUNT
EFFECTIVE PAYABLE PAYABLE PAYABLE
ISSUE(C,D) YIELD AT MATURITY AT MATURITY AT MATURITY VALUE(a) Value(a) Value(a)
RIVERSOURCE RIVERSOURCE
GOVERNMENT GOVERNMENT
RIVERSOURCE RIVERSOURCE MONEY RIVERSOURCE RIVERSOURCE MONEY
GOVERNMENT TAX-EXEMPT MARKET FUND GOVERNMENT TAX-EXEMPT MARKET FUND
MONEY MONEY PRO FORMA MONEY MONEY PRO FORMA
MARKET FUND MARKET FUND COMBINED MARKET FUND MARKET FUND COMBINED
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED)
WISCONSIN (1.1%)
Milwaukee Redevelopment Authority
Revenue Bonds
La Causa Incorporated Project
V.R.D.N. Series 2000 (U.S. Bank)
12/01/20 0.22% $ -- $2,540,000 $2,540,000(e) $-- $ 2,540,000 $ 2,540,000
----------------------------------------------------------------------------------------------------------------------
TOTAL MUNICIPAL
NOTES
(Cost: $85,976,474) $-- $85,976,474 $85,976,474
----------------------------------------------------------------------------------------------------------------------
<Caption>
U.S. GOVERNMENT AGENCIES (2.2%)
AMOUNT AMOUNT AMOUNT
EFFECTIVE PAYABLE PAYABLE PAYABLE
ISSUER YIELD AT MATURITY AT MATURITY AT MATURITY VALUE(a) Value(a) Value(a)
DISTRICT OF COLUMBIA
Federal Home Loan Bank Disc Nts
07/01/09 0.01% $ -- $5,000,000 $5,000,000 -- 5,000,000 5,000,000
----------------------------------------------------------------------------------------------------------------------
TOTAL U.S. GOVERNMENT AGENCIES
(Cost: $5,000,000) $-- $ 5,000,000 $ 5,000,000
----------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
MONEY MARKET FUND (1.3%)
SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
JPMorgan Tax-Free
Money Market Fund -- 2,991,937 2,991,937 -- $ 2,991,937 $ 2,991,937
--------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $2,991,937) $ -- $ 2,991,937 $ 2,991,937
--------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost:
$228,255,311)(f) $134,286,900 $93,968,411 $228,255,311
--------------------------------------------------------------------------------------------------------
</Table>
NOTES TO COMBINED PORTFOLIO OF INVESTMENTS
(a) Securities are valued by policies described in Note 1 and/or 2 to the
financial statements in the annual report.
(b) This debt is guaranteed under the FDIC's Temporary Liquidity Guarantee
Program (TLGP) and is backed by the full faith and credit of the United
States.
(c) The following abbreviations may be used in the portfolio descriptions:
<Table>
A.M.T. -- Alternative Minimum Tax
B.A.N. -- Bond Anticipation Note
C.P. -- Commercial Paper
R.A.N. -- Revenue Anticipation Note
T.A.N. -- Tax Anticipation Note
T.R.A.N. -- Tax & Revenue Anticipation Note
V.R. -- Variable Rate
V.R.D.B. -- Variable Rate Demand Bond
V.R.D.N. -- Variable Rate Demand Note
</Table>
(d) The Fund is entitled to receive principal and interest from the party, if
indicated in parentheses, after a day or a week's notice or upon maturity.
The maturity date disclosed represents the final maturity. For purposes of
Rule 2a-7, maturity is the later of the next put or interest rate reset
date.
(e) Interest rate varies to reflect current market conditions; rate shown is the
effective rate on June 30, 2009.
(f) Also represents the cost of securities for federal income tax purposes at
June 30, 2009.
101
PART C. OTHER INFORMATION
Item 15. Indemnification
Reference is made to the provisions of Articles Twelfth and Thirteenth of
Registrant's Amended and Restated Articles of Incorporation filed as Exhibit
24(b)(1) to Registrant's Post-Effective Amendment No. 30 to the Registration
Statement filed on April 29, 1997 and Article X of Registrant's Amended and
Restated By-laws filed as Exhibit Item 23(b) of Registrant's Post-Effective
Amendment No. 42 filed on May 1, 2006.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised by the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
Item 16. Exhibits
(1)(a) Form of Articles of Amendment dated May 16, 2008. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 44 filed on
April 29, 2008.)
(1)(b) Articles Supplementary, dated April 7, 2003. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 39 filed on April 30,
2003.)
(1)(c) Articles Supplementary dated November 19, 2001. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 37 filed on
November 29, 2001.)
(1)(d) Articles Supplementary dated May 24, 1999. (Incorporated by reference
to Registrant's Post-Effective Amendment No. 34 filed on May 28, 1999.)
(1)(e) Amended and Restated of Articles of Incorporation of Registrant.
(Incorporated by reference to Registrant's Post-Effective Amendment No.
30 filed on April 29, 1997.)
(2) Amended and Restated By-laws of the Registrant. (Incorporated by
reference to Registrant's Post-Effective Amendment No. 42 filed on May
1, 2006.)
(3) Not applicable.
(4) Form of Agreement and Plan of Reorganization is included herein as
Exhibit A to Part A of this Registration Statement.
(5) Not applicable.
(6) Investment Management Services Agreement to be filed by Amendment.
(7)(a) Distribution Agreement, effective Nov. 7, 2008, amended and restated
Sept. 14, 2009, between Registrant and RiverSource Fund Distributors,
Inc. filed electronically on or about Sept. 25, 2009 as Exhibit (e)(1)
to RiverSource Large Cap Series, Inc. Post-Effective Amendment No. 86
to Registration Statement No. 2-38355 is incorporated by reference.
(7)(b) Form of Service Agreement filed electronically on or about Aug. 27,
2007 as Exhibit (e)(3) to RiverSource Sector Series, Inc.
Post-Effective Amendment No. 39 to Registration Statement No. 33-20872
is incorporated by reference.
(7)(c) Form of RiverSource Funds Dealer Agreement filed electronically on or
about Aug. 27, 2007 as Exhibit (e)(4) to RiverSource Sector Series,
Inc. Post-Effective Amendment No. 39 to Registration Statement No.
33-20872 is incorporated by reference.
(8) Deferred Compensation Plan, amended and restated Jan. 1, 2009, filed
electronically on or about Jan. 27, 2009 as Exhibit (f) to RiverSource
Equity Series, Inc. Post-Effective Amendment No. 105 to Registration
Statement No. 2-13188 is incorporated by reference.
(9) Form of Master Global Custody Agreement with JPMorgan Chase Bank, N.A.
filed electronically on or about Dec. 23, 2008 as Exhibit (g) to
RiverSource International Managers Series, Inc. Post-Effective
Amendment No. 18 to Registration Statement No. 333-64010 is
incorporated by reference.
(10)(a) Plan of Distribution and Agreement of Distribution, effective Nov. 7,
2008, amended and restated Sept. 14, 2009, between Registrant and
RiverSource Fund Distributors, Inc. filed electronically on or about
Sept. 25, 2009 as Exhibit (m) to RiverSource Large Cap Series, Inc.
Post-Effective Amendment No. 86 to Registration Statement No. 2-38355
is incorporated by reference.
(10)(b) Rule 18f - 3(d) Plan, amended and restated as of Sept. 14, 2009, filed
electronically on or about Sept. 25, 2009 as Exhibit (n) to RiverSource
Large Cap Series, Inc. Post-Effective Amendment No. 86 to Registration
Statement No. 2-38355 is incorporated by reference.
(10)(c) Form of Revised Sales and 12b-1 Agreement between RiverSource Fund
Distributors, Inc. and Dealers to be filed by Amendment.
(10)(d) Form of Services Agreement between Morgan Stanley Dean Witter, Inc. and
RiverSource Fund Distributors, Inc. to be filed by Amendment.
(10)(e) Form of Selected Dealer Agreement between Merrill Lynch Pierce, Fenner
& Smith, Incorporated and RiverSource Fund Distributors, Inc. to be
filed by Amendment.
(10)(f) Form of Supplemental Fund Services Agreement between Merrill Lynch
Pierce, Fenner & Smith, Incorporated, RiverSource Investments, LLC and
RiverSource Fund Distributors, Inc. to be filed by Amendment.
(10)(g) Form of Services Agreement between CIBC Oppenheimer & Co., Inc and
RiverSource Fund Distributors, Inc. to be filed by Amendment.
(10)(h) Form of Services Agreement between Paine Webber Incorporated and
RiverSource Fund Distributors, Inc. to be filed by Amendment.
(10)(i) Form of Services Agreement among Fidelity Brokerage Services, LLC,
National Financial Services, LLC and RiverSource Fund Distributors,
Inc. to be filed by Amendment.
(10)(j) Participation Agreement between Salomon Smith Barney Inc. and
RiverSource Fund Distributors, Inc. to be filed by Amendment.
(10)(k) Form of Services Agreement between Charles Schwab & Co., Inc., the
Registrant and RiverSource Fund Distributors, Inc. to be filed by
Amendment.
(10)(l) Form of Mutual Fund Dealer Agreement between RiverSource Fund
Distributors, Inc. and Smith Barney Inc. to be filed by Amendment.
(10)(m) Form of Supplemental Fund Services Agreement between The Princeton
Retirement Group, Inc. and GPC Securities, Inc., RiverSource
Investments, LLC and RiverSource Fund Distributors, Inc. to be filed by
Amendment.
(10)(n) Form of Mutual Fund Services Agreement between Prudential Investment
Management Services LLC, Prudential Investments LLC and RiverSource
Fund Distributors, Inc. to be filed by Amendment.
(10)(o) Form of Operating Agreement between Pershing LLC and RiverSource Fund
Distributors, Inc. to be filed by Amendment.
(10)(p) Form of Load Fund Operating Agreement between Charles Schwab & Co., the
Registrant and RiverSource Fund Distributors, Inc. to be filed by
Amendment.
(11) Opinion and consent of counsel as to the legality of the securities
being registered to be filed by Amendment.
(12) Tax opinion to be filed by Amendment.
(13)(a) Administrative Services Agreement, dated Oct. 1, 2005, amended and
restated Sept. 14, 2009, between Registrant and Ameriprise Financial,
Inc. filed electronically on or about Sept. 25, 2009 as Exhibit (h)(1)
to RiverSource Large Cap Series, Inc. Post-Effective Amendment No. 86
to Registration Statement No. 2-38355 is incorporated by reference.
(13)(b) Plan Administration Services Agreement, dated Dec. 1, 2006, amended and
restated Sept. 14, 2009, between Registrant and RiverSource Service
Corporation filed electronically on or about Sept. 25, 2009 as Exhibit
(h)(3) to RiverSource Large Cap Series, Inc. Post-Effective Amendment
No. 86 to Registration Statement No. 2-38355 is incorporated by
reference.
(13)(c) Transfer Agency Agreement, dated Oct. 1, 2005, amended and restated
Sept. 14, 2009, between Registrant and RiverSource Service Corporation
filed electronically on or about Sept. 25, 2009 as Exhibit (h)(2) to
RiverSource Large Cap Series, Inc. Post-Effective Amendment No. 86 to
Registration Statement No. 2-38355 is incorporated by reference.
(13)(d) Master Fee Cap/Fee Waiver Agreement, dated Oct. 1, 2005, amended and
restated Sept. 14, 2009 between RiverSource Investments, LLC,
Ameriprise Financial, Inc., RiverSource Service Corporation,
RiverSource Fund Distributors, Inc. and the Registrant filed
electronically on or about Sept. 25, 2009 as Exhibit (h)(11) to
RiverSource Large Cap Series, Inc. Post-Effective Amendment No. 86 to
Registration Statement No. 2-38355 is incorporated by reference.
(13)(e) License Agreement, effective May 1, 2006, amended and restated as of
Nov. 12, 2008, between Ameriprise Financial, Inc. and RiverSource
Family of Funds filed electronically on or about Feb. 27, 2009 as
Exhibit (h)(4) to RiverSource Variable Series Trust Post-Effective
Amendment No. 4 to Registration Statement No. 333-146374 is
incorporated by reference.
(14) Consent of Independent Registered Public Accounting Firm to be filed by
Amendment.
(15) Financial Statements: Not applicable.
(16) Directors/Trustees Power of Attorney to sign this Registration
Statement and its amendments, dated Nov. 11, 2009, is filed
electronically herewith as Exhibit (16).
(17)(a) Code of Ethics adopted under Rule 17j-1 for Registrant filed
electronically on or about Feb. 27, 2009 as Exhibit (p)(1) to
RiverSource Variable Series Trust Post-Effective Amendment No. 4 to
Registration Statement No. 333-146374 is incorporated by reference.
(17)(b) Code of Ethics adopted under Rule 17j-1 for Registrant's principal
underwriter, dated April 2008, filed electronically on or about April
25, 2008 as Exhibit (p)(2) to RiverSource Variable Series Trust
Post-Effective Amendment No. 3 to Registration Statement No. 333-146374
is incorporated by reference.
(17)(c) Code of Ethics adopted under Rule 17j-1 for Registrant's investment
adviser, dated Nov. 15, 2008, filed electronically on or about Nov. 25,
2008 as Exhibit (p)(3) to RiverSource Investment Series, Inc.
Post-Effective Amendment No. 121 to Registration Statement No. 2-11328
is incorporated by reference.
(17)(d) Prospectus, dated Feb. 29, 2009, for RiverSource Tax-Exempt Money
Market Fund to be filed by Amendment.
(17)(e) Prospectus, dated May 1, 2009, for RiverSource Government Money Market
Fund to be filed by Amendment.
(17)(f) Statement of Additional Information, dated Nov. 27, 2009, for
RiverSource Tax-Exempt Money Market Fund to be filed by Amendment.
(17)(g) Statement of Additional Information, dated May 1, 2009, for RiverSource
Government Money Market Fund to be filed by Amendment.
(17)(h) Annual Report for the period ended Dec. 31, 2008 for RiverSource
Tax-Exempt Money Market Fund to be filed by Amendment.
(17)(i) Annual Report for the period ended Dec. 31, 2008 for RiverSource
Government Money Market Fund to be filed by Amendment.
(17)(j) Semiannual Report for the period ended June 30, 2009 for RiverSource
Government Money Market Fund to be filed by Amendment.
(17)(k) Semiannual Report for the period ended June 30, 2009 for RiverSource
Tax-Exempt Money Market Fund to be filed by Amendment.
Item 17. Undertakings.
(1) The undersigned registrant agrees that prior to any public reoffering
of the securities registered through the use of a prospectus which is a
part of this registration statement by any person or party who is
deemed to be an underwriter within the meaning of Rule 145(c) of the
Securities Act, the reoffering prospectus will contain the information
called for by the applicable registration form for the reofferings by
persons who may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(2) The undersigned registrant agrees that every prospectus that is filed
under paragraph (1) above will be filed as a part of an amendment to
the registration statement and will not be used until the amendment is
effective, and that, in determining any liability under the 1933 Act,
each post-effective amendment shall be deemed to be a new registration
statement for the securities offered therein, and the offering of the
securities at that time shall be deemed to be the initial bona fide
offering of them.
(3) The Registrant undertakes to file by Post-Effective Amendment an
Opinion of Counsel supporting the tax consequences of the proposed
reorganization within a reasonable time after receipt of such opinion.
SIGNATURES
As required by the Securities Act of 1933, as amended, this Registration
Statement has been signed on behalf of the Registrant, in the City of
Minneapolis, and State of Minnesota on the 25th day of November, 2009.
RIVERSOURCE GOVERNMENT MONEY MARKET FUND, INC.
By /s/ Patrick T. Bannigan
----------------------------------
Patrick T. Bannigan
President
By /s/ Jeffrey P. Fox
----------------------------------
Jeffrey P. Fox
Treasurer
As required by the Securities Act of 1933, this Registration Statement has been
signed below by the following persons in the capacities indicated on the 25th
day of November, 2009.
Signature Capacity
------------------------------------- ----------------------------------------
/s/ Stephen R. Lewis, Jr.* Chair of the Board
-------------------------------------
Stephen R. Lewis, Jr.
/s/ Kathleen A. Blatz* Director
-------------------------------------
Kathleen A. Blatz
/s/ Arne H. Carlson* Director
-------------------------------------
Arne H. Carlson
/s/ Pamela G. Carlton* Director
-------------------------------------
Pamela G. Carlton
/s/ Patricia M. Flynn* Director
-------------------------------------
Patricia M. Flynn
/s/ Anne P. Jones* Director
-------------------------------------
Anne P. Jones
Signature Capacity
------------------------------------- ----------------------------------------
/s/ Jeffrey Laikind* Director
-------------------------------------
Jeffrey Laikind
/s/ John F. Maher* Director
-------------------------------------
John F. Maher
/s/ Catherine James Paglia* Director
-------------------------------------
Catherine James Paglia
/s/ Leroy C. Richie* Director
-------------------------------------
Leroy C. Richie
/s/ Alison Taunton-Rigby* Director
-------------------------------------
Alison Taunton-Rigby
/s/ William F. Truscott* Director
-------------------------------------
William F. Truscott
* Signed pursuant to Directors/Trustees Power of Attorney, dated November 11,
2009, filed electronically herewith as Exhibit (16), by:
/s/ Scott R. Plummer
-------------------------------------
Scott R. Plummer
EXHIBIT INDEX
(16) Directors/Trustees Power of Attorney to sign this Registration
Statement and its amendments, dated Nov. 11, 2009.