UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-14
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
[X] Pre-Effective Amendment No. 1 (File No.
333-163371)
[ ] 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.
This Registration Statement shall hereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933. It is proposed that this filing will
become effective on January 27, 2010.
RIVERSOURCE FAMILY OF FUNDS
734 Ameriprise Financial Center
Minneapolis, Minnesota 55474
NOTICE OF A JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD MARCH 10, 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 2:00 p.m. CST on
March 10, 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 proposal 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
beginning on or about Jan. 28, 2010.
By order of the Boards of Directors
/S/ Scott R. Plummer
Scott R. Plummer, Secretary
Jan. 27, 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. 27, 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. 28,
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 2:00 p.m. CST on March 10, 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 the 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 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, dated Jan. 22, 2010, as
supplemented to date;
3
the Statement of Additional Information of Seligman Global Smaller Companies
Fund, dated Dec. 30, 2009, as supplemented to date;
the Statement of Additional Information relating to the Reorganizations (the
"Merger SAI"), dated Jan. 27, 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 10, 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....................................................... 48
Comparison of the Selling Fund and the Buying Fund........................... 48
Comparison of Investment Objectives........................................ 48
Comparison of Principal Investment Strategies.............................. 48
Comparison of Fundamental Policies......................................... 49
Comparison of Nonfundamental Policies...................................... 50
Comparison of Principal Risk Factors....................................... 51
Performance................................................................ 51
PROPOSAL 5. REORGANIZATION OF SELIGMAN GLOBAL SMALLER COMPANIES FUND INTO
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND............................ 56
Comparison of the Selling Fund and the Buying Fund........................... 56
Comparison of Investment Objectives........................................ 56
Comparison of Principal Investment Strategies.............................. 56
Comparison of Fundamental Policies......................................... 58
Comparison of Nonfundamental Policies...................................... 59
Comparison of Principal Risk Factors....................................... 60
Performance................................................................ 62
PROPOSAL 6. REORGANIZATION OF RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND INTO
RIVERSOURCE GOVERNMENT MONEY MARKET FUND..................................... 66
Comparison of the Selling Fund and the Buying Fund........................... 66
Comparison of Investment Objectives........................................ 66
Comparison of Principal Investment Strategies.............................. 66
Comparison of Fundamental Policies......................................... 68
Comparison of Nonfundamental Policies...................................... 70
Comparison of Principal Risk Factors....................................... 70
Performance................................................................ 71
ADDITIONAL INFORMATION ABOUT EACH REORGANIZATION............................... 73
Terms of the Reorganizations................................................. 73
Conditions to Closing Each Reorganization.................................... 73
Termination of the Agreement................................................. 73
Tax Status of the Reorganizations............................................ 73
Reasons for the Proposed Reorganizations and Board Deliberations............. 77
Board Determinations......................................................... 82
Board Recommendation and Required Vote....................................... 82
</Table>
6
<Table>
<Caption>
PAGE
----
SECTION B -- PROXY VOTING AND SHAREHOLDER MEETING INFORMATION.................... 83
SECTION C -- CAPITALIZATION, OWNERSHIP OF FUND SHARES AND FINANCIAL HIGHLIGHTS... 85
Capitalization of Selling Funds and Buying Funds............................. 85
Ownership of Selling Fund and Buying Fund Shares............................. 88
Financial Highlights......................................................... 93
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 Reorganization 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)* 0.78% 0.78% 0.78% 0.78% 0.78% 0.78% 0.78% 0.78%
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) 0.37% 0.40% 0.37% 0.11% 0.41% 0.41% 0.41% 0.16%
Total annual fund operating expenses 1.40% 2.18% 2.15% 0.89% 1.69% 1.44% 1.19% 0.94%
<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)* 0.78% 0.78% 0.78% 0.78% 0.78% 0.78% 0.78% 0.78%
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) 0.44% 0.48% 0.44% 0.11% 0.41% 0.41% 0.41% 0.16%
Total annual fund operating expenses 1.47% 2.26% 2.22% 0.89% 1.69% 1.44% 1.19% 0.94%
Fee waiver/expense reimbursement 0.11% 0.12% 0.10% 0.00% 0.00% 0.00% 0.00% 0.00%
Total annual (net) fund operating expenses(e) 1.36% 2.14% 2.12% 0.89% 1.69% 1.44% 1.19% 0.94%
</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. Other expenses for Class R2, Class R3 and Class R5 are based on
estimated amounts for the current fiscal year.
(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 increased
the management fee by 0.08% 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 for at least one year following
the Reorganization date, unless sooner terminated at the discretion of the
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.
* 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) $709 $ 993 $1,298 $2,163
Class B $721(b) $ 982(b)$1,370(b)$2,320(c)
Class C $318(b) $ 673 $1,155 $2,487
Class I $ 91 $ 284 $ 494 $1,100
Class R2 $172 $ 533 $ 919 $2,003
Class R3 $147 $ 456 $ 788 $1,729
Class R4 $121 $ 378 $ 655 $1,448
Class R5 $ 96 $ 300 $ 521 $1,159
<Caption>
RIVERSOURCE MID CAP GROWTH FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $706 $1,003 $1,323 $2,227
Class B $717(b) $ 995(b)$1,400(b)$2,391(c)
Class C $315(b) $ 685 $1,182 $2,551
Class I $ 91 $ 284 $ 494 $1,100
Class R2 $172 $ 533 $ 919 $2,003
Class R3 $147 $ 456 $ 788 $1,729
Class R4 $121 $ 378 $ 655 $1,448
Class R5 $ 96 $ 300 $ 521 $1,159
</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 $221 $682 $1,170 $2,320(a)
Class C $218 $673 $1,155 $2,487
<Caption>
RIVERSOURCE MID CAP GROWTH FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $217 $695 $1,200 $2,391(a)
Class C $215 $685 $1,182 $2,551
</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 126%
</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) 1.16% 1.19% 1.17% 0.72% 1.02% 1.02% 1.02% 0.77%
Total annual fund operating expenses 2.30% 3.08% 3.06% 1.61% 2.41% 2.16% 1.91% 1.66%
Fee waiver/expense reimbursement 0.79% 0.79% 0.78% 0.55% 0.55% 0.55% 0.55% 0.55%
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) 1.19% 1.21% 1.20% 0.72% 1.02% 1.02% 1.02% 0.77%
Total annual fund operating expenses 2.33% 3.10% 3.09% 1.61% 2.41% 2.16% 1.91% 1.66%
Fee waiver/expense reimbursement 0.82% 0.81% 0.81% 0.55% 0.55% 0.55% 0.55% 0.55%
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 $1,181 $1,668 $3,006
Class B $732(b) $1,177(b)$1,748(b)$3,158(c)
Class C $331(b) $ 872 $1,539 $3,323
Class I $108 $ 455 $ 825 $1,870
Class R2 $189 $ 699 $1,237 $2,709
Class R3 $164 $ 623 $1,110 $2,455
Class R4 $138 $ 547 $ 982 $2,193
Class R5 $113 $ 470 $ 852 $1,925
<Caption>
SELIGMAN FRONTIER FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $720 $1,187 $1,680 $3,033
Class B $732(b) $1,181(b)$1,756(b)$3,178(b)
Class C $331(b) $ 878 $1,551 $3,349
Class I $108 $ 455 $ 825 $1,870
Class R2 $189 $ 699 $1,237 $2,709
Class R3 $164 $ 623 $1,110 $2,455
Class R4 $138 $ 547 $ 982 $2,193
Class R5 $113 $ 470 $ 852 $1,925
</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 $877 $1,548 $3,158(a)
Class C $231 $872 $1,539 $3,323
<Caption>
SELIGMAN FRONTIER FUND (PRO FORMA COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $232 $881 $1,556 $3,178(a)
Class C $231 $878 $1,551 $3,349
</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 162%
</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 0.95% 0.95% 0.95% 0.95% 0.95%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.50% 0.00%
Other expenses(a) 0.85% 0.88% 0.86% 0.77% 0.52%
Total annual fund operating expenses 2.05% 2.83% 2.81% 2.22% 1.47%
Acquired fund fees and expenses(b) 0.02% 0.02% 0.02% 0.02% 0.02%
Total fund and acquired fund fees and expenses(b) 2.07% 2.85% 2.83% 2.24% 1.49%
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
(ACTUAL) (BUYING FUND)
Management fees(c) 1.02% 1.02% 1.02% 1.02% 1.02%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.50% 0.00%
Other expenses(d) 1.19% 1.22% 1.22% 0.95% 0.70%
Total annual fund operating expenses 2.46% 3.24% 3.24% 2.47% 1.72%
Fee waiver/expense reimbursement 0.81% 0.81% 0.83% 0.47% 0.47%
Total annual (net) fund operating expenses(e) 1.65% 2.43% 2.41% 2.00% 1.25%
</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(c) 1.02% 1.02% 1.02% 1.02% 1.02%
Distribution and/or service (12b-1) fees 0.25% 1.00% 1.00% 0.50% 0.00%
Other expenses(d) 1.12% 1.15% 1.13% 0.94% 0.69%
Total annual fund operating expenses 2.39% 3.17% 3.15% 2.46% 1.71%
Fee waiver/expense reimbursement 0.74% 0.74% 0.74% 0.46% 0.46%
Total annual (net) fund operating expenses(e) 1.65% 2.43% 2.41% 2.00% 1.25%
</Table>
(a) Other expenses include an administrative services fee, a transfer agency
fee, a custody fee, other nonadvisory expenses and a plan administrative
services fee (for Class R2).
(b) 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.
(c) Includes the impact of a performance incentive adjustment fee that decreased
the management fee by 0.10% 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.
(d) 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. Other expenses for Class R2 and Class
R5 are based on estimated amounts for the current fiscal year.
(e) 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 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 1.75% for Class A, 2.53% for Class B, 2.51% for
Class C, 2.10% for Class R2 and 1.35% 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) $773 $1,187 $1,625 $2,842
Class B $788(b) $1,183(b)$1,704(b)$2,994(c)
Class C $386(b) $ 877 $1,194 $3,160
Class R2 $227 $ 701 $1,201 $2,579
Class R5 $152 $ 471 $ 814 $1,785
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (ACTUAL)
(BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $733 $1,225 $1,742 $3,157
Class B $746(b) $1,223(b)$1,824(b)$3,308(c)
Class C $344(b) $ 921 $1,622 $3,486
Class R2 $203 $ 725 $1,274 $2,775
Class R5 $127 $ 496 $ 890 $1,996
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (PRO FORMA
COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class A(a) $733 $1,211 $1,715 $3,096
Class B $746(b) $1,209(b)$1,796(b)$3,247(c)
Class C $344(b) $ 903 $1,586 $3,410
Class R2 $203 $ 723 $1,270 $2,766
Class R5 $127 $ 494 $ 886 $1,986
</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 $288 $883 $1,504 $2,994(a)
Class C $286 $877 $1,194 $3,160
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (ACTUAL)
(BUYING FUND) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $246 $923 $1,624 $3,308(a)
Class C $244 $921 $1,622 $3,486
<Caption>
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (PRO FORMA
COMBINED) 1 YEAR 3 YEARS 5 YEARS 10 YEARS
Class B $246 $909 $1,596 $3,247(a)
Class C $244 $903 $1,586 $3,410
</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 140%
RiverSource Partners International Small Cap Fund 174%
</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 0.00% 0.30%(a) 0.25%(a)
Total annual (net) fund operating expenses 0.68% 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). The market
assets may be invested in foreign investments capitalization of the companies included
within the Index was $250 million to $16.27
billion as of Nov. 30, 2009. 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 largest
market capitalization of a company within the
Index or falls below the market
capitalization of the smallest company within
the Index.
--------------------------------------------------------------------------------------------
</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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 29.
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.
28
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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 29.
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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 29.
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.
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.
29
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 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% +31.33%
2004 2005 2006 2007 2008 2009
During the periods shown in the bar chart, the highest return for a calendar
quarter was +19.10% (quarter ended Sept. 30, 2009) 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 Dec. 31, 2009 was +31.33%.
30
RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
-5.66% -12.65% -13.78% +22.99% +9.47% +9.88% -0.23% +14.04% -44.67% +62.52%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
During the periods shown in the bar chart, the highest return for a calendar
quarter was +26.78% (quarter ended June 30, 2009) 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 Dec. 31, 2009 was +62.52%.
31
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2009)
<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 +23.77% -0.33% +6.42% N/A N/A
Return after taxes on distributions +23.77% -0.54% +5.98% N/A N/A
Return after taxes on distributions and sale of
fund shares +15.45% -0.34% +5.36% N/A N/A
Class B
Return before taxes +25.31% -0.32% +6.55% N/A N/A
Class C
Return before taxes +29.50% +0.10% +6.57% N/A N/A
Class I
Return before taxes +31.94% +1.25% N/A +2.10% N/A
Class R2
Return before taxes +30.74% N/A N/A N/A -4.71%
Class R3
Return before taxes +31.23% N/A N/A N/A -4.37%
Class R4
Return before taxes +31.59% +1.12% +7.64% N/A N/A
Class R5
Return before taxes +31.94% N/A N/A N/A -4.04%
Russell Midcap Growth Index (reflects no deduction
for fees, expenses or taxes) +46.29% +2.40% +8.81% +3.45% -3.61%
Lipper Mid-Cap Growth Funds Index +42.65% +3.35% +8.56%() +4.87% -1.04%
<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 +53.17% +1.17% +0.14% N/A N/A
Return after taxes on distributions +53.17% -0.28% -1.09% N/A N/A
Return after taxes on distributions and sale of
fund shares +34.56% +0.91% -0.11% N/A N/A
Class B
Return before taxes +56.42% +1.33% -0.05% N/A N/A
Class C
Return before taxes +60.29% +1.60% N/A -0.05% N/A
Class I
Return before taxes +63.51% +2.85% N/A N/A +3.43%
Class R4
Return before taxes +63.16% +2.57% +0.91% N/A N/A
Russell Midcap Growth Index (reflects no deduction
for fees, expenses or taxes) +46.29% +2.40% -0.52% -1.79% +3.45%
Lipper Mid-Cap Growth Funds Index +42.65% +3.35% -1.47% +0.16% +4.87%
</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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 35.
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.
34
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.
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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 35.
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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 35.
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.
35
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 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% +31.81%
2003 2004 2005 2006 2007 2008 2009
During the periods shown in the bar chart, the highest return for a calendar
quarter was +19.44% (quarter ended Sept. 30, 2009) 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 Dec. 31, 2009 was +31.81%.
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% +39.57%
2003 2004 2005 2006 2007 2008 2009
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 Dec. 31, 2009 was +39.57%.
37
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2009)
<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 +24.24% +0.02% +3.81% N/A
Return after taxes on distributions +23.69% -2.13% +2.32% N/A
Return after taxes on distributions and sale of fund
shares +15.75% -0.39% +2.99% N/A
Class B
Return before taxes +26.15% +0.21% +3.81% N/A
Class C
Return before taxes +29.97% +0.48% +3.84% N/A
Class I
Return before taxes +32.57% +1.64% N/A +2.87%
Class R4
Return before taxes +32.20% +1.51% +4.85% N/A
Russell Midcap Value Index (reflects no deduction for fees,
expense or taxes) +34.21% +1.98% +6.13% +4.32%
Lipper Mid-Cap Value Funds Index +39.74% +1.89% +5.06% +4.20%
<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 +31.54% +1.98% +6.79% N/A
Return after taxes on distributions +30.96% +0.74% +5.91%() N/A
Return after taxes on distributions and sale of fund
shares +20.50% +1.42% +5.72% N/A
Class B
Return before taxes +33.56% +2.09% +6.77% N/A
Class C
Return before taxes +37.59% +2.40% +6.78%() N/A
Class I
Return before taxes +40.34% +3.64% N/A +5.74%
Class R4
Return before taxes +39.93% +3.35% +7.78% N/A
Russell Midcap Value Index (reflects no deduction for fees,
expenses or taxes) +34.21% +1.98% +6.83% +4.32%
Lipper Mid-Cap Value Funds Index +39.74% +1.89% +5.14% +4.20%
</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 to provide
shareholders with 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. The Fund will provide
investment, have a market capitalization not shareholders with at least 60 days' notice of
greater than that of the largest company in any change in the 80% policy.
the Russell 2000(R) Index or the S&P SmallCap
600 Index. The market capitalization range Although the Fund invests primarily in common
and the composition of both the Russell 2000 stocks of domestic issuers, it may also
Index and the S&P SmallCap 600 Index are invest in other equity-related securities of
subject to change. The Fund will primarily domestic issuers, including preferred stock,
invest in value stocks, but may invest in stock convertible into or exchangeable for
growth stocks based on available such securities, and common stock purchase
opportunities. The Fund will provide rights and warrants. The Fund may also
shareholders with at least 60 days' notice of invest in American Depositary Receipts
any change in the 80% policy. ("ADRs"). ADRs 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 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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 42.
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.
----------------------------------------------------------------------------------------------------
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 42.
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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 42.
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.
42
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 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 certain 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 measures of market performance 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;
43
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.
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)
(BAR CHART)
<Table>
+46.34% +18.48% +8.75% +9.87% +0.63% -36.59% +29.20%
2003 2004 2005 2006 2007 2008 2009
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 Dec. 31, 2009 was +29.20%.
44
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+26.55% +16.18% -17.45% +48.96% +20.58% -3.08% +21.38% +6.26% -41.19% +36.40%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
During the periods shown in the bar chart, the highest return for a calendar
quarter was +29.74% (quarter ended June 30, 2009) 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 Dec. 31, 2009 was +36.40%.
45
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2009)
<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 +21.78% -1.48% +2.23% N/A
Return after taxes on distributions +21.42% -2.54% +1.12% N/A
Return after taxes on distributions and sale of fund
shares +14.16% -1.36% +1.65% N/A
Class B
Return before taxes +23.30% -1.34% +2.23% N/A
Class C
Return before taxes +27.23% -1.01% +2.23% N/A
Class I
Return before taxes +29.59% -0.14% N/A +1.57%
Class R4
Return before taxes +29.19% -0.12% +3.18% N/A
Russell 2000(R) Index (reflects no deduction for fees,
expenses or taxes) +27.17% +0.51% +4.27% +2.09%
Lipper Small-Cap Core Funds Index +34.50% +1.55% +4.48% +3.76%
</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.
46
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2009) (CONTINUED)
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND):
Class A*
Return before taxes +28.60% -1.12% +7.50%
Return after taxes on distributions +28.60% -2.05% +6.95%
Return after taxes on distributions and sale of Fund shares +18.59% -0.92% +6.65%
Class B
Return before taxes +30.48% -0.98% +7.33%
Class C**
Return before taxes +34.56% -0.65% +7.35%
Russell 2000(R) Value Index
(reflects no deductions for fees, sales charges, expenses or
taxes) +20.58% -0.01% +8.27%
Lipper Small-Cap Core Funds Index +34.50% +1.55% +5.24%
Lipper Small-Cap Value Funds Index +33.00% +1.42% +8.73%
Lipper Small-Cap Core Funds Average +31.96% +0.65% +5.86%
Lipper Small-Cap Value Funds Average +32.43% +0.91% +8.11%
</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 SmallCap 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 Jan. 1, 2010, the Lipper Indexes
replaced the Lipper Averages as the Fund's secondary benchmarks. A Lipper
Average includes all funds categorized by Lipper within the broad universe of
funds in the Lipper Average, whereas a 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 Indexes and the Lipper
Averages will be included for a one-year transition period. Thereafter, only the
Lipper Indexes will be included.
47
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.
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 Small companies are currently defined as
2000 Growth Index. The Fund will provide companies with market capitalization, at the
shareholders with at least 60 days' notice of time of purchase, of $2 billion or less.
any change in the 80% policy. Companies are selected for their growth
prospects.
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'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>
48
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
The Fund generally sells a stock if the investment manager believes:
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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 51.
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.
----------------------------------------------------------------------------------------------------
</Table>
49
----------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP GROWTH
POLICY FUND (SELLING FUND) SELIGMAN FRONTIER FUND (BUYING FUND)
----------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------
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.
----------------------------------------------------------------------------------------------------
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 51.
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.
50
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 51.
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. Also, due to the fact that the Buying Fund's portfolio turnover rate
is higher than the Selling Fund's as of their respective fiscal year ends, the
Buying Fund's shareholders may be impacted by higher taxable income when Fund
shares are held in a taxable account. 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.
MARKET RISK. The market value of securities may fall or fail to rise, and you
may lose money. 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, by focusing on a particular style, for example,
investing 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 earnings of small capitalization companies tend to be less predictable
and have shorter operating histories, and 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. This means that the fund could have greater
difficulty selling such securities at the time and price that the fund would
like. In addition, the returns from a specific type of security (for example,
small-cap stocks) may trail returns from other asset classes or the overall
market. Historically, small-capitalization companies have sometimes gone
through extended periods where they did not perform as well as larger
companies. These periods may last for several years.
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.
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 certain 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.
51
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 measures of market performance 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.
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% +25.20%
2002 2003 2004 2005 2006 2007 2008 2009
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 Dec. 31, 2009 was +25.20%.
52
SELIGMAN FRONTIER FUND (BUYING FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
-14.19% -8.72% -27.07% +37.01% +13.09% -3.91% +20.42% +6.20% -42.31% +32.94%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
During the periods shown in the bar chart, the highest return for a calendar
quarter was +20.88% (quarter ended June 30, 2009) 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 Dec. 31, 2009 was +32.94%.
53
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2009)
<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 +18.00% -2.84% -2.90% N/A N/A
Return after taxes on distributions +18.00% -3.80% -3.44% N/A N/A
Return after taxes on distributions and sale of
fund shares +11.70% -2.48% -2.46% N/A N/A
Class B
Return before taxes +19.26% -2.73% -3.01% N/A N/A
Class C
Return before taxes +23.68% -2.41% -2.98% N/A N/A
Class I
Return before taxes +25.86% -1.19% N/A -0.87% N/A
Class R2
Return before taxes +25.00% N/A N/A N/A -7.51%
Class R3
Return before taxes +25.19% N/A N/A N/A -7.23%
Class R4
Return before taxes +25.19% -1.52% -2.11% N/A N/A
Class R5
Return before taxes +25.87% N/A N/A N/A -6.98%
Russell 2000(R) Growth Index (reflects no deduction
for fees, expenses or taxes) +34.47% +0.87% +0.54% +1.80% -4.35%
Lipper Small-Cap Growth Funds Index +38.03% +0.25% +1.39% +1.88% -4.57%
</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.
54
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2009) (CONTINUED)
<Table>
<Caption>
SINCE SINCE
INCEPTION INCEPTION
(CLASS R2) (CLASS R5)
1 YEAR 5 YEARS 10 YEARS (4/30/03) (11/30/01)
SELIGMAN FRONTIER FUND:
Class A*
Return before taxes +25.24% -2.34% -2.38% N/A N/A
Return after taxes on distributions +25.24% -3.58% -3.18% N/A N/A
Return after taxes on distributions and sale of
Fund shares +16.41% -2.09% -2.08% N/A N/A
Class B
Return before taxes +26.83% -2.18% -2.55% N/A N/A
Class C**
Return before taxes +31.07% -1.81% -2.50% N/A N/A
Class R2
Return before taxes +32.54% -1.46% N/A +4.84% N/A
Class R5
Return before taxes +33.15% -0.59% N/A N/A +2.00%
Russell 2000 Growth Index +34.47% +0.87% -1.37% +8.14% +3.43%
Lipper Small-Cap Growth Funds Index +38.03% +0.25% -0.63% +4.95% +2.92%
Lipper Small-Cap Growth Funds Average +36.37% +0.23% -0.18% +7.04% +2.72%
</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
measures the performance of these Russell 2000 Index companies with higher
price-to-book ratios and higher forecasted growth values. The index reflects
reinvestment of all distributions, if any and excludes the effect of expenses,
fees, sales charges and taxes.
The Lipper Small-Cap Growth Funds Index ("Lipper Index") includes the 30 largest
small-cap growth funds tracked by Lipper Inc.
The Lipper Small-Cap Growth Funds Average ("Lipper 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.
The Lipper Index and the Lipper Average assume reinvestment of all
distributions, if any, and exclude the effect of sales-related fees (but include
operating expenses), sales charges and taxes.
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.
55
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 to provide
shareholders with 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. Smaller companies are currently defined as
those with market capitalization, at the time of purchase by the Fund,
equivalent to U.S. $3 billion or less. The Fund's Board may change the
definition of smaller companies if it concludes that such a change is
appropriate. The Fund will provide shareholders with at least 60 days' notice of
any change in the 80% policy. 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.
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
56
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.
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 normally concentrates its investments in common stocks; however, it may
invest in other types of equity securities, including depositary receipts.
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 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. Forward foreign currency exchange contracts 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 even when they are available.
The principal investment strategies may be changed without shareholder approval.
Any material changes to these strategies, however, must be approved by the
Fund's Board of Directors.
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 Index). The market capitalization within the Index will
vary. The market capitalization range of the companies included within the Index
was $12 million to $12 billion as of Nov. 30, 2009. 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 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.
57
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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 60.
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.
---------------------------------------------------------------------------------------------------
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.
---------------------------------------------------------------------------------------------------
</Table>
58
---------------------------------------------------------------------------------------------------
SELIGMAN GLOBAL SMALLER COMPANIES FUND RIVERSOURCE PARTNERS INTERNATIONAL SMALL
POLICY (SELLING FUND) CAP FUND (BUYING FUND)
---------------------------------------------------------------------------------------------------
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.
---------------------------------------------------------------------------------------------------
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 60.
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 between the nonfundamental policies of the Funds result in
any material differences in the way the Funds have been managed
59
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.
---------------------------------------------------------------------------------------------------
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 60.
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. The
asset management strategy of one of the Buying Fund's Subadvisers may result in
a large portion of assets it manages to be invested in a particular sector
thereby exposing Buying Fund shareholders to greater sector risk. Also the
Buying Fund currently has greater exposure to emerging market securities and
therefore may expose shareholders to greater emerging market risk. In addition,
due to the fact that the Buying Fund's portfolio turnover rate is higher than
the Selling Fund's as of their respective fiscal year ends, the Buying Fund's
shareholders may be impacted by higher taxable income when Fund shares are held
in a taxable
60
account. 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.
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.
61
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 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.
In addition to the risks described above, the Buying Fund is subject to the
additional principal investment risk set forth below. While this additional risk
may also be a risk of the Selling Fund, it is not stated as a principal
investment risk of the Selling Fund. For more information regarding the Selling
Fund's principal investment risks, see "Principal Risks" of the Selling Fund's
prospectus.
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 certain 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
measures of market performance 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.
62
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>
-16.29% -17.63% -25.23% +39.64% +21.69% +16.44% +17.39% +3.29% -47.60% +42.74%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
During the periods shown in the bar chart, the highest return for a calendar
quarter was +30.84% (quarter ended June 30, 2009) 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 Dec. 31, 2009 was +42.74%.
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% +35.82%
2003 2004 2005 2006 2007 2008 2009
During the periods shown in the bar chart, the highest return for a calendar
quarter was +24.93% (quarter ended June 30, 2009) 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 Dec. 31, 2009 was +35.82%.
63
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2009)
<Table>
<Caption>
SINCE SINCE
INCEPTION INCEPTION
(CLASS R2) (CLASS R5)
1 YEAR 5 YEARS 10 YEARS (4/30/03) (11/30/01)
SELIGMAN GLOBAL SMALLER COMPANIES FUND
Class A*
Return before taxes +34.59% -0.09% -1.36% N/A N/A
Return after taxes on distributions +34.07% -1.41% -2.19% N/A N/A
Return after taxes on distributions and sale of
Fund shares +22.48% -0.29% -1.29% N/A N/A
Class B
Return before taxes +36.84% +0.05% -1.53% N/A N/A
Class C**
Return before taxes +40.63% +0.35% -1.51% N/A N/A
Class R2
Return before taxes +42.73% +0.88% N/A +9.02% N/A
Class R5
Return before taxes +44.02% +1.74% N/A N/A +4.73%
S&P Developed Broad Market Index Less Than $2
Billion USD (reflects no deduction for fees,
expenses or taxes) +51.54% +5.07% +7.16% +13.68% +10.80%
Lipper Global Small/Mid-Cap Funds Index +42.48% N/A N/A N/A N/A
Lipper Global Small/Mid-Cap Funds Average +42.15% +2.92% +1.96% +10.71% +6.49%
</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 Standard & Poor's Developed Broad Market Index Less Than $2 Billion USD (the
"S&P Developed BMI LT $2B USD"), 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 S&P Developed BMI LT $2B USD assumes reinvestment of all
distributions, if any, and excludes the effect of expenses, fees, sales charges
and taxes.
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 Lipper Global Small/Mid-Cap Funds Average (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.
The Lipper Index and the Lipper Average assume reinvestment of all
distributions, if any, and exclude the effect of sales-related fees (but
includes operating expenses), sales charges and taxes.
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.
Investors cannot invest directly in an average or an index.
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.
64
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2009) (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 +28.02% -0.40% +8.92%
Return after taxes on distributions +27.98% -2.34% +6.91%
Return after taxes on distributions and sale of fund shares +18.21% -0.65% +7.28%
Class B
Return before taxes +29.92% -0.23% +8.98%
Class C
Return before taxes +33.92% +0.04% +9.00%
S&P Global ex-U.S. SmallCap Index (reflects no deduction for
fees, expenses or taxes) +56.84% +7.12% +16.42%
S&P Global ex-U.S. Under USD2 Billion Index (reflects no
deduction for fees, expenses or taxes) +62.85% +7.95% +17.49%
Lipper International Small-Cap Funds Index +48.74% +5.77% +15.29%
</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.
65
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).
66
Detailed strategies for the Selling Fund and the Buying Fund are set forth
below:
<Table>
<Caption>
------------------------------------------------------------------------------------
RIVERSOURCE TAX-EXEMPT MONEY MARKET RIVERSOURCE GOVERNMENT MONEY MARKET FUND
FUND (SELLING FUND) (BUYING FUND)
------------------------------------------------------------------------------------
The Fund's assets primarily are The Fund will normally invest at least 80% of
invested in debt obligations. Under its net assets in high-quality, short-term
normal market conditions, at least money market securities that are issued or
80% of the Fund's net assets are guaranteed by the U.S. government, its agencies
invested in short-term debt or instrumentalities. The Fund will provide
obligations whose interest is shareholders with at least 60 days' notice of
exempt from federal income taxes. any change in the 80% policy.
This 80% threshold is a fundamental
policy of the Fund. These The Fund will invest only in U.S. dollar-
securities must be rated in one of denominated securities having a remaining
the two highest categories by maturity of 13 months (397 days) or less and
national rating services. The Fund will maintain a U.S. dollar-weighted average
may invest up to 25% of its net portfolio maturity of 90 days or less.
assets in securities of issuers
located in the same state or region In seeking to maintain a constant net asset
or in industrial revenue bonds. value of $1.00, the Fund will limit its
investments to securities that, in accordance
Because the Fund seeks to maintain with guidelines approved by the Fund's Board of
a constant net asset value of $1.00 Directors, present minimal credit risk.
per share, capital appreciation is Accordingly, the Fund will only purchase U.S.
not expected to play a role in the government securities, or securities rated in
Fund's return. An investment in the one of the two highest rating categories
Fund is not insured or guaranteed assigned to short-term debt securities by at
by the Federal Deposit Insurance least two nationally recognized statistical
Corporation or any other government rating organizations (such as Moody's Investors
agency. Service ("Moody's") or Standard & Poor's
Ratings Services ("S&P")), or if not so rated,
Some notes issued in the tax-free determined to be of comparable quality.
securities market are subject to
the alternative minimum tax Determination of quality is made at the time of
("AMT"). To avoid any federal investment, in accordance with procedures
income tax liability for investors approved by the Fund's Board of Directors. The
who may be subject to the AMT, the investment manager continuously monitors the
Fund does not intend to invest in quality of the Fund's investments. If the
such issues. quality of an investment declines, the Fund
may, in certain limited circumstances, continue
In pursuit of the Fund's objective, to hold it.
the Fund's investment manager
chooses debt obligations by: Currently, the Fund invests only in U.S.
Considering opportunities and government securities and in securities that
risks in short-term municipal are rated in the top category by Moody's and
obligations given current S&P. However, the Fund is permitted to invest
interest rates and anticipated up to 5% of its assets in securities rated in
interest rates. the second rating category by two rating
Identifying investments that: organizations. The Fund may not invest more
- have interest not subject to than the greater of 1% of its total assets or
the AMT; and $1,000,000 in any one security in the second
- have short-term effective rating category.
maturities.
Identifying obligations that In pursuit of the Fund's objective, the
contribute to portfolio investment manager chooses investments by:
diversification of the Fund.
- Considering opportunities and risks given
The Fund restricts its investments current interest rates and anticipated
to instruments that meet certain interest rates.
effective maturity and quality
standards required for tax-exempt - Purchasing securities based on the timing of
money market funds. For example, cash flows in and out of the Fund.
the Fund:
Limits its average portfolio
effective maturity to 90 days or
less.
Buys obligations with remaining
effective maturities of 397 days
or less.
Buys only obligations that are
denominated in U.S. dollars and
present minimal credit risk.
If suitable tax-exempt securities
are not 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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 70.
67
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>
68
---------------------------------------------------------------------------------------------------
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.
---------------------------------------------------------------------------------------------------
69
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 70.
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.
DIFFERENCES IN FUNDS' PRINCIPAL INVESTMENT STRATEGIES, FUNDAMENTAL AND
NONFUNDAMENTAL POLICIES AND CURRENT HOLDINGS, MAY EXPOSE FUNDS' SHAREHOLDERS TO
POTENTIAL INCREASED RISK FACTORS, IF ANY. THE COMPARISON OF THOSE RISK FACTORS
ARE DESCRIBED IN THE "COMPARISON OF PRINCIPAL RISK FACTORS" SECTION ON PAGE 70.
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 (exempt from federal income tax and the
alternative minimum tax), whereas the Buying Fund invests primarily in
securities of the U.S. government, its agencies and instrumentalities. If the
Reorganization is approved, it may result in tax implications for Selling Fund
shareholders (becoming Buying Fund shareholders) since the Buying Fund generates
income distributions subject to federal income tax. 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
70
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.
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>
+3.50% +2.21% +0.89% +0.37% +0.50% +1.71% +2.79% +3.09% +1.38% +0.01%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
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 +0.002% (quarter ended Sept. 30, 2009).
The Fund's year-to-date return at Dec. 31, 2009 was +0.01%.
71
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (BUYING
FUND)
CLASS A SHARE PERFORMANCE
(BASED ON CALENDAR YEARS)
(BAR CHART)
<Table>
+5.65% +3.21% +0.74% +0.19% +0.43% +2.20% +3.95% +4.09% +1.12% +0.03%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
During the periods shown in the bar chart, the highest return for a calendar
quarter was +1.48% (quarter ended Dec. 31, 2000) and the lowest return for a
calendar quarter was +0.001% (quarter ended Sept. 30, 2009).
The Fund's Class A year-to-date return at Dec. 31, 2009 was +0.03%.
AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED DEC. 31, 2009)
<Table>
<Caption>
1 YEAR 5 YEARS 10 YEARS
RiverSource Tax-Exempt Money Market Fund -- Class A +0.01% +1.79% +1.64%
RiverSource Government Money Market Fund -- Class A +0.03% +2.26% +2.14%
</Table>
72
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
73
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
74
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
75
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.
76
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" accounts that would experience no tax cost as a
result of the limitation on capital loss carryforwards. The Board also
77
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
78
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 2010 fiscal year
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,
based on this commitment, will not exceed 1.28% for Class A shares. The gross
expense ratio of RiverSource Partners Aggressive Growth Fund is expected to
decline by at least 0.31%, 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
79
not have an expense cap. The Board observed current expense trends and
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
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 2010 fiscal year 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%, the net expenses of RiverSource Partners Select Value Fund
(for Class A and Class B shares only) are expected to increase by no more than
0.03% (before giving effect to any applicable performance incentive
adjustment), as a result of the Reorganization. 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 2010 fiscal year 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, which could potentially impact the Fund's expenses 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 0.34% 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 at 1.51% for Class A.
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 0.44%, the net expense ratio would decline by 0.30%, as
a result of the commitment to waive fees and cap expenses by the investment
manager and its affiliates at 1.75% for Class A shares, as a result of the
Reorganization. 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
80
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 based on the least of: (i) the
current contractual expense cap for RiverSource Government Money Market Fund,
which is 0.66%; or (ii) RiverSource Government Money Market Fund's expense cap
(including the assets of the combined Fund) after applying the Board's pricing
philosophy that it applies when considering renewal of the Fund's investment
management services agreement with RiverSource Investments (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). In this regard, it
was noted that since the current contractual expense cap for RiverSource
Government Money Market Fund is lower than its expense cap after applying the
Board's pricing philosophy, RiverSource Investments and its affiliates have
agreed to waive fees and cap expenses at 0.66%.
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 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.
81
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. 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.
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.
82
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.
83
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.
84
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 Jan. 15, 2010
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 $238,359,699 $7.67 31,095,682
Class B 25,356,386 7.28 3,482,492
Class C 1,917,584 7.29 263,179
Class I 85,702,669 7.85 10,913,945
Class R2 98,754 7.64 12,926
Class R3 24,623 7.72 3,189
Class R4 76,864 7.79 9,873
Class R5 4,467 7.81 572
RIVERSOURCE MID CAP GROWTH FUND (ACTUAL) (BUYING FUND)
Class A $593,883,377 $9.32 63,740,594
Class B 53,956,353 7.74 6,973,426
Class C 9,144,449 7.74 1,180,932
Class I 77,589,463 9.82 7,904,737
Class R4 4,428,613 9.60 461,084
RIVERSOURCE MID CAP GROWTH FUND (PRO FORMA COMBINED)
Class A $832,243,076 $9.32 89,315,669
Class B 79,312,739 7.74 10,249,445
Class C 11,062,033 7.74 1,428,682
Class I 163,292,132 9.82 16,632,096
Class R2* 98,754 9.32 10,596
Class R3* 24,623 9.32 2,642
Class R4 4,505,477 9.60 469,091
Class R5* 4,467 9.82 455
</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.
85
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
-------------------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SELECT VALUE FUND (ACTUAL) (SELLING
FUND)
Class A $ 195,665,664 $4.00 48,867,539
Class B 32,983,209 3.84 8,589,282
Class C 4,171,131 3.82 1,090,851
Class I 64,256,119 4.06 15,815,901
Class R4 74,458 4.03 18,466
RIVERSOURCE MID CAP VALUE FUND (ACTUAL) (BUYING FUND)
Class A $1,364,181,435 $6.57 207,791,540
Class B 105,398,609 6.34 16,627,457
Class C 44,184,836 6.33 6,979,127
Class I 48,425,064 6.66 7,270,782
Class R4 376,040,149 6.60 56,969,128
RIVERSOURCE MID CAP VALUE FUND (PRO FORMA COMBINED)
Class A $1,559,847,099 $6.57 237,573,224
Class B 138,381,818 6.34 21,829,856
Class C 48,355,967 6.33 7,638,073
Class I 112,681,183 6.66 16,918,848
Class R4 376,114,607 6.60 56,980,410
</Table>
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
------------------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP EQUITY FUND (ACTUAL)
(SELLING FUND)
Class A $125,409,032 $ 4.49 27,957,631
Class B 11,405,729 4.19 2,721,254
Class C 1,565,862 4.18 374,631
Class I 7,845 4.55 1,724
Class R4 2,775,679 4.56 608,611
SELIGMAN SMALLER-CAP VALUE FUND (ACTUAL) (BUYING FUND)
Class A $227,638,422 $13.02 17,481,033
Class B 27,334,221 11.53 2,370,639
Class C 47,846,271 11.54 4,145,004
Class I 6,516,153 13.81 471,820
Class R4 44,098 13.79 3,197
SELIGMAN SMALLER-CAP VALUE FUND (PRO FORMA COMBINED)
Class A $353,047,454 $13.02 27,113,063
Class B 38,739,950 11.53 3,359,861
Class C 49,412,133 11.54 4,280,694
Class I 6,523,998 13.81 472,388
Class R4 2,819,777 13.79 204,479
</Table>
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
-----------------------------------------------------------------------------------------------------------
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (ACTUAL)
(SELLING FUND)
Class A $49,555,409 $3.22 15,401,363
Class B 11,458,075 2.96 3,875,750
Class C 2,092,587 2.96 707,057
Class I 44,428,227 3.35 13,278,753
Class R2 3,078 3.24 951
Class R3 3,104 3.26 951
Class R4 143,016 3.27 43,720
Class R5 3,137 3.30 951
</Table>
86
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
-----------------------------------------------------------------------------------------------------------
SELIGMAN FRONTIER FUND (ACTUAL) (BUYING FUND)
Class A $25,277,922 $9.19 2,750,732
Class B 1,180,376 7.37 160,092
Class C 9,705,421 7.41 1,309,955
Class I 1,120,790 9.76 114,806
Class R2 92,961 9.02 10,301
Class R3 5,629 9.04 623
Class R4 12,970 9.75 1,330
Class R5 767,179 9.76 78,601
SELIGMAN FRONTIER FUND (PRO FORMA COMBINED)
Class A $74,833,331 $9.19 8,143,051
Class B 12,638,451 7.37 1,714,783
Class C 11,798,008 7.41 1,592,355
Class I 45,549,017 9.76 4,666,878
Class R2 96,039 9.02 10,642
Class R3 8,733 9.04 966
Class R4 155,986 9.75 15,998
Class R5 770,316 9.76 78,922
</Table>
<Table>
<Caption>
NET ASSET VALUE
FUND NET ASSETS PER SHARE SHARES OUTSTANDING
-----------------------------------------------------------------------------------------------------------
SELIGMAN GLOBAL SMALLER COMPANIES FUND (ACTUAL) (SELLING
FUND)
Class A $50,005,809 $11.98 4,172,679
Class B 1,917,701 9.95 192,745
Class C 24,056,415 10.03 2,398,826
Class R2 1,526,360 11.76 129,802
Class R5 861,711 12.76 67,515
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
(ACTUAL) (BUYING FUND)
Class A $26,313,131 $ 5.54 4,751,524
Class B 4,289,610 5.31 808,593
Class C 523,056 5.30 98,708
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (PRO
FORMA COMBINED)
Class A $76,318,940 $ 5.54 13,777,843
Class B 6,207,311 5.31 1,169,742
Class C 24,579,471 5.30 4,637,654
Class R2* 1,526,360 5.54 275,516
Class R5* 861,711 5.63 153,057
</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* $ 74,497,723 $1.00 74,530,099
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (ACTUAL) (BUYING
FUND)
Class A $ 88,609,477 $1.00 88,620,349
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (PRO FORMA
COMBINED)
Class A $163,107,200 $1.00 163,118,072
</Table>
*The single class of shares of RiverSource Tax-Exempt Money Market Fund is
referred to as Class A shares.
87
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 Nov. 30, 2009. As of Nov.
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 Moderate Aggressive Fund 31.47% N/A
RiverSource Portfolio Builder Moderate Fund 27.05% N/A
RiverSource Portfolio Builder Aggressive Fund 16.62% N/A
RiverSource Portfolio Builder Total Equity Fund 15.72% N/A
RiverSource Portfolio Builder Moderate Conservative Fund 6.78% N/A
Class R2 GWFS Equities Inc., Greenwood Village, CO 95.55% N/A
Class R3 MG Trust Company FBO Body Masters, Inc., Denver, CO 52.61% N/A
MG Trust Company FBO Central Jersey Collision, Denver, CO 28.91% N/A
RiverSource Investments, LLC (RiverSource Investments),
Minneapolis, MN 18.48% N/A
Class R4 Charles Schwab & Co., Inc. (Charles Schwab), a brokerage firm
in San Francisco, CA 87.44% N/A
Matrix Capital Bank MSCS, Denver CO 7.11% N/A
RiverSource Investments 5.45% N/A
Class R5 RiverSource Investments 100.00% N/A
RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
Class A Charles Schwab 6.71% 4.78%
Class B None N/A N/A
Class C Morgan Stanley & Co. (Morgan Stanley), Jersey City, NJ 5.39% 4.41%
Class I RiverSource Portfolio Builder Moderate Aggressive Fund 31.64% 31.55%
RiverSource Portfolio Builder Moderate Fund 27.14% 27.10%
RiverSource Portfolio Builder Aggressive Fund 16.53% 16.58%
RiverSource Portfolio Builder Total Equity Fund 15.52% 15.63%
RiverSource Portfolio Builder Moderate Conservative Fund 6.82% 6.80%
Class R2* GWFS Equities Inc., Greenwood Village, CO N/A 95.54%
Class R3* MG Trust Company FBO Body Masters, Inc., Denver, CO N/A 52.59%
MG Trust Company FBO Central Jersey Collision, Denver, CO N/A 28.90%
RiverSource Investments N/A 18.47%
Class R4 Wachovia Bank NA (Wachovia Bank), Charlotte, NC 83.28% 81.23%
US Bank NA, Milwaukee, WI 7.83% 7.64%
Charles Schwab 7.49% 9.45%
Matrix Capital Bank MSCS, Denver CO N/A 0.17%
RiverSource Investments N/A 0.13%
Class R5* RiverSource Investments N/A 100.00%
</Table>
*Note: Class R2, Class R3 and Class R5 shares are being added to RiverSource
Mid Cap Growth Fund in connection with the Reorganization.
88
<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 5.75% N/A
Class B None N/A N/A
Class C None N/A N/A
Class I RiverSource Portfolio Builder Moderate Aggressive Fund 29.83% N/A
RiverSource Portfolio Builder Moderate Fund 25.19% N/A
RiverSource Portfolio Builder Total Equity Fund 18.43% N/A
RiverSource Portfolio Builder Aggressive Fund 18.07% N/A
RiverSource Portfolio Builder Moderate Conservative Fund 6.32% 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 31.79% 27.76%
Prudential Investment Management Services LLC, Newark, NJ 15.09% 13.18%
Class B None N/A N/A
Class C Merrill Lynch, Pierce Fenner & Smith Inc. (MLFP&S),
Jacksonville, FL 17.81% 16.26%
Citigroup Global Markets (Citigroup), Owings Mills, MD 5.53% 5.05%
Class I RiverSource Portfolio Builder Moderate Aggressive Fund 29.75% 24.94%
RiverSource Portfolio Builder Moderate Fund 25.23% 25.22%
RiverSource Portfolio Builder Total Equity Fund 18.44% 13.23%
RiverSource Portfolio Builder Aggressive Fund 18.08% 23.09%
RiverSource Portfolio Builder Moderate Conservative Fund 6.30% 11.37%
Class R4 John Hancock Live Insurance Company, Buffalo, NY 22.71% 22.71%
Wachovia Bank 16.76% 16.76%
ING Life Insurance and Annuity, Hartford, CT 18.43% 18.44%
NFS LLC FEBO FIIOC as Agent for Qualified Employee Benefit Plans 9.73% 9.73%
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 5.23% 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 95.18% N/A
SELIGMAN SMALLER-CAP VALUE FUND (BUYING FUND)
Class A Charles Schwab N/A 1.84%
Class B None N/A N/A
Class C MLPF&S 33.44% 32.30%
Class I RiverSource Portfolio Builder Total Equity Fund 74.75% 74.69%
RiverSource Portfolio Builder Aggressive Fund 25.11% 25.09%
RiverSource Investments N/A 0.12%
Class R4 Wachovia Bank N/A 93.76%
Charles Schwab 89.04% 1.36%
RiverSource Investments 10.96% 0.17%
</Table>
89
<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 6.71% N/A
Class B None N/A N/A
Class C None N/A N/A
Class I RiverSource Portfolio Builder Moderate Aggressive Fund 30.76% N/A
RiverSource Portfolio Builder Moderate Fund 25.75% N/A
RiverSource Portfolio Builder Aggressive Fund 18.49% N/A
RiverSource Portfolio Builder Total Equity Fund 16.28% N/A
RiverSource Portfolio Builder Moderate Conservative Fund 6.44% N/A
Class R2 RiverSource Investments 100.00% N/A
Class R3 RiverSource Investments 100.00% N/A
Class R4 Charles Schwab 99.08% N/A
Class R5 RiverSource Investments 100.00% N/A
SELIGMAN FRONTIER FUND (BUYING FUND)*
Class A MLPF&S 9.02% 3.06%
Charles Schwab N/A 4.44%
Class B Citigroup 7.06% 0.67%
State Street Bank and Trust FBO Iris Somerstein Simple IRA,
Miami, FL 5.48% 0.52%
State Street Bank and Trust FBO Ronald Hersey Simple IRA, Avon,
MA 5.07% 0.48%
Class C MLPF&S 21.86% 18.01%
Class I RiverSource Portfolio Builder Total Equity Fund 99.50% 18.38%
RiverSource Portfolio Builder Moderate Aggressive Fund N/A 29.96%
RiverSource Portfolio Builder Moderate Fund N/A 25.07%
RiverSource Portfolio Builder Aggressive Fund N/A 18.01%
RiverSource Portfolio Builder Moderate Conservative Fund N/A 6.27%
Class R2 MLPF&S 63.03% 61.00%
Frontier Trust Company FBO, Fargo, ND (Frontier Trust), FBO
Financial Network Audit, LLC 14.43% 13.96%
RiverSource Investments 9.37% 12.32%
Frontier Trust FBO C. Anthony Phillips Accountancy 401K 6.59% 6.37%
Frontier Trust FBO Dedicated Systems Inc. 401K 6.18% 5.98%
Class R3 RiverSource Investments 100.00% 100.00%
Class R4 RiverSource Investments 51.23% 3.68%
Charles Schwab 48.77% 95.61%
Class R5 Grammar Fisher Foundation, Easton, MD 67.75% 67.47%
Patricks Plain (Patricks Plain), Easton, MD 29.23% 29.12%
RiverSource Investments N/A 0.45%
</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 38.54% 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 27.63% of Seligman Frontier Fund.
90
<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 11.35% N/A
Class B MLPF&S 13.27% N/A
Morgan Stanley 6.73% N/A
Class C MLPF&S 18.31% N/A
Class R2 Frontier Trust FBO EFK Moen 401K 19.71% N/A
Frontier Trust FBO Edwards Sales Corporation 401K 12.72% N/A
Frontier Trust FBO B & L Corporation 401K 10.51% N/A
Frontier Trust FBO Physicians Care 401K 10.33% N/A
Frontier Trust FBO Dedicated Systems Inc. 401K 8.79% N/A
Frontier Trust FBO C. Anthony Phillips Accountancy 401K 7.81% N/A
Frontier Trust FBO Financial Network Audit, LLC 401K 7.25% N/A
Frontier Trust FBO General Truck Sales Corp. 401K 6.58% N/A
Frontier Trust FBO Fulton Communications 401K 5.64% N/A
Frontier Trust FBO Signature Mixed Use, LLC 401K 5.42% N/A
Class R5 Patricks Plain 92.85% N/A
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (BUYING FUND)*
Class A Charles Schwab 9.01% 3.07%
MLPF&S N/A 7.48%
Class B MLPF&S N/A 4.01%
Morgan Stanley N/A 2.04%
Class C Morgan Stanley 14.62% 0.31%
MLPF&S N/A 17.73%
Class R2(#) Frontier Trust FBO EFK Moen 401K N/A 19.70%
Frontier Trust FBO Edwards Sales Corporation 401K N/A 12.71%
Frontier Trust FBO B & L Corporation 401K N/A 10.50%
Frontier Trust FBO Physicians Care 401K N/A 10.32%
Frontier Trust FBO Dedicated Systems Inc. 401K N/A 8.79%
Frontier Trust FBO C. Anthony Phillips Accountancy 401K N/A 7.81%
Frontier Trust FBO Financial Network Audit, LLC 401K N/A 7.25%
Frontier Trust FBO General Truck Sales Corp. 401K N/A 6.58%
Frontier Trust FBO Fulton Communications 401K N/A 5.64%
Frontier Trust FBO Signature Mixed Use, LLC 401K N/A 5.41%
Class R5(#) Patricks Plain N/A 94.53%
</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 50.85% 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 29.32% 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 9.07% N/A
Lawrence Garner, Woodstock, GA and Ronald J. Garner, Wycoff, NJ 8.76% N/A
</Table>
91
<Table>
<Caption>
PERCENT OF
PERCENT SHARES HELD
OF SHARES FOLLOWING THE
FUND 5% OWNERS HELD REORGANIZATION
-----------------------------------------------------------------------------------------------------
RIVERSOURCE GOVERNMENT MONEY MARKET FUND (BUYING FUND)
Class A Raymond James and Assoc. Inc., Waverly, TN N/A 4.40%
Lawrence Garner, Woodstock, GA and Ronald J. Garner, Wycoff, NJ N/A 4.25%
</Table>
*The single class of shares of RiverSource Tax-Exempt Money Market Fund is
referred to as Class A shares.
92
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,
RiverSource Partners International Small Cap Fund for the fiscal years ended on
or after Oct. 31, 2007 and Seligman Frontier Fund for the fiscal year ended Oct.
31, 2009 has been derived from the financial statements 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 financial statements for prior fiscal periods for these funds has
been audited by other auditors. The financial statements and financial
highlights as of Dec. 31, 2008 and for the periods then ended for RiverSource
Government Money Market Fund (formerly Seligman Cash Management Fund), and
Seligman Smaller-Cap Value Fund have 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 DATA
Year ended Nov. 30, 2009 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) (.03) (.02) (.05) (.01) (.08)
Net gains (losses) (both realized and unrealized) 3.37 (4.93) 1.62 (.07) 1.93
-------------------------------------------------------------------------------------------------------------
Total from investment operations 3.34 (4.95) 1.57 (.08) 1.85
-------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.58 $5.24 $12.32 $14.40 $14.49
-------------------------------------------------------------------------------------------------------------
Total return 63.74% (48.26%) 14.40% (.55%) 14.64%
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Total expenses 1.40% 1.16% 1.08% 1.09% 1.09%
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.42%) (.05%) (.40%) (.07%) (.57%)
-------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $554 $349 $852 $1,093 $1,376
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 126% 76% 87% 45% 27%
-------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
93
RiverSource Mid Cap Growth Fund - Class B
<Table>
<Caption>
PER SHARE DATA
Year ended Nov. 30, 2009 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) (.07) (.02) (.12) (.12) (.19)
Net gains (losses) (both realized and unrealized) 2.81 (4.20) 1.41 (.05) 1.79
-------------------------------------------------------------------------------------------------------------
Total from investment operations 2.74 (4.22) 1.29 (.17) 1.60
-------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.13 $4.39 $10.74 $13.10 $13.28
-------------------------------------------------------------------------------------------------------------
Total return 62.41% (48.64%) 13.46% (1.28%) 13.70%
-------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Total expenses 2.18% 1.92% 1.84% 1.87% 1.86%
-------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.19%) (.81%) (1.15%) (.89%) (1.35%)
-------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $50 $44 $137 $207 $329
-------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 126% 76% 87% 45% 27%
-------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
94
RiverSource Mid Cap Growth Fund - Class C
<Table>
<Caption>
PER SHARE DATA
Year ended Nov. 30, 2009 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) (.07) (.02) (.11) (.12) (.18)
Net gains (losses) (both realized and unrealized) 2.82 (4.20) 1.40 (.05) 1.78
-----------------------------------------------------------------------------------------------------------------
Total from investment operations 2.75 (4.22) 1.29 (.17) 1.60
-----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $7.14 $4.39 $10.74 $13.10 $13.28
-----------------------------------------------------------------------------------------------------------------
Total return 62.64% (48.63%) 13.46% (1.28%) 13.70%
-----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Total expenses 2.15% 1.92% 1.84% 1.87% 1.87%
-----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.20%) (.81%) (1.03%) (.87%) (1.35%)
-----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $8 $3 $7 $9 $12
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 126% 76% 87% 45% 27%
-----------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
95
RiverSource Mid Cap Growth Fund - Class I
<Table>
<Caption>
PER SHARE DATA
Year ended Nov. 30, 2009 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 .08 (.03) .01 (.01)
Net gains (losses) (both realized and unrealized) 3.53 (5.21) 1.70 (.02) 1.95
-----------------------------------------------------------------------------------------------------------------
Total from investment operations 3.54 (5.13) 1.67 (.01) 1.94
-----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $9.03 $5.49 $12.75 $14.73 $14.75
-----------------------------------------------------------------------------------------------------------------
Total return 64.48% (48.00%) 14.86% (.07%) 15.14%
-----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Total expenses .89% .71% .67% .66% .63%
-----------------------------------------------------------------------------------------------------------------
Net investment income (loss) .10% .39% (.24%) .10% (.09%)
-----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $71 $53 $54 $-- $43
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 126% 76% 87% 45% 27%
-----------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
96
RiverSource Mid Cap Growth Fund - Class R4
<Table>
<Caption>
PER SHARE DATA
Year ended Nov. 30, 2009 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) (.01) .07 (.03) -- (.06)
Net gains (losses) (both realized and unrealized) 3.46 (5.13) 1.65 (.05) 1.95
-----------------------------------------------------------------------------------------------------------------
Total from investment operations 3.45 (5.06) 1.62 (.05) 1.89
-----------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.13) (3.65) (.01) --
-----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.84 $5.39 $12.58 $14.61 $14.67
-----------------------------------------------------------------------------------------------------------------
Total return 64.01% (48.11%) 14.56% (.34%) 14.79%
-----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(a)
Gross expenses prior to expense waiver/reimbursement 1.19% 1.00% .94% .91% .92%
-----------------------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(b) 1.15% .93% .92% .91% .92%
-----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.17%) .18% (.25%) (.07%) (.40%)
-----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $4 $3 $7 $29 $203
-----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 126% 76% 87% 45% 27%
-----------------------------------------------------------------------------------------------------------------
</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 reported expense ratios.
(b) 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.
97
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.
98
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.
99
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.
100
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.
101
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.
102
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.
103
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.
104
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).
105
Seligman Frontier Fund - Class A
<Table>
<Caption>
PER SHARE DATA:
Year ended Oct. 31, 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.29 $15.63 $14.29 $12.36 $12.17
-------------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.08) (.12) (.21) (.21) (.21)
Net gains (losses) (both realized and unrealized) 1.00 (5.93) 3.18 2.64 .40
-------------------------------------------------------------------------------------------------------------------------
Total from investment operations .92 (6.05) 2.97 2.43 .19
-------------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(a) -- .12 -- -- --
-------------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.41) (1.63) (.50) --
-------------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.21 $7.29 $15.63 $14.29 $12.36
-------------------------------------------------------------------------------------------------------------------------
Total return 12.62% (44.19%)(a) 22.93% 20.29% 1.56%
-------------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 2.62% 2.05% 1.90% 1.97% 2.01%
-------------------------------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 1.86% 1.97% 1.90% 1.97% 2.01%
-------------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.91%) (1.13%) (1.47%) (1.60%) (1.70%)
-------------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $23 $25 $52 $48 $48
-------------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162% 156% 116% 92% 96%
-------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
106
Seligman Frontier Fund - Class B
<Table>
<Caption>
PER SHARE DATA:
Year ended Oct. 31, 2009 2008 2007 2006 2005
Net asset value, beginning of period $5.90 $13.22 $12.42 $10.88 $10.80
---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.12) (.16) (.27) (.27) (.27)
Net gains (losses) (both realized and unrealized) .82 (4.85) 2.70 2.31 .35
---------------------------------------------------------------------------------------------------------------------
Total from investment operations .70 (5.01) 2.43 2.04 .08
---------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(a) -- .10 -- -- --
---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.41) (1.63) (.50) --
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.60 $5.90 $13.22 $12.42 $10.88
---------------------------------------------------------------------------------------------------------------------
Total return 11.86% (44.62%)(a) 21.90% 19.43% .74%
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 3.38% 2.81% 2.66% 2.73% 2.76%
---------------------------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 2.63% 2.73% 2.66% 2.73% 2.76%
---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.65%) (1.89%) (2.23%) (2.36%) (2.45%)
---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $1 $3 $4 $7
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162% 156% 116% 92% 96%
---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
107
Seligman Frontier Fund - Class C
<Table>
<Caption>
PER SHARE DATA:
Year ended Oct. 31, 2009 2008 2007 2006 2005
Net asset value, beginning of period $5.93 $13.23 $12.42 $10.89 $10.81
---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.12) (.15) (.27) (.27) (.27)
Net gains (losses) (both realized and unrealized) .82 (4.84) 2.71 2.30 .35
---------------------------------------------------------------------------------------------------------------------
Total from investment operations .70 (4.99) 2.44 2.03 .08
---------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(a) -- .10 -- -- --
---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.41) (1.63) (.50) --
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $6.63 $5.93 $13.23 $12.42 $10.89
---------------------------------------------------------------------------------------------------------------------
Total return 11.80% (44.38%)(a) 22.00% 19.31% .74%
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 3.36% 2.81% 2.66% 2.73% 2.76%
---------------------------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 2.61% 2.73% 2.66% 2.73% 2.76%
---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.66%) (1.89%) (2.23%) (2.36%) (2.45%)
---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $9 $9 $3 $3 $3
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162% 156% 116% 92% 96%
---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
108
Seligman Frontier Fund - Class I
<Table>
<Caption>
PER SHARE DATA:
Period ended Oct. 31, 2009(d)
Net asset value, beginning of period $8.65
------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)
Net gains (losses) (both realized and unrealized) .07
------------------------------------------------------------------------------------------------
Total from investment operations .06
------------------------------------------------------------------------------------------------
Net asset value, end of period $8.71
------------------------------------------------------------------------------------------------
Total return .69%
------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 1.30%(e)
------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 1.06%(e)
------------------------------------------------------------------------------------------------
Net investment income (loss) (.39%)(e)
------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1
------------------------------------------------------------------------------------------------
Portfolio turnover rate 162%
------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
109
Seligman Frontier Fund - Class R2*
<Table>
<Caption>
PER SHARE DATA:
Year ended Oct. 31, 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.18 $15.47 $14.20 $12.30 $12.17
---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.10) (.14) (.24) (.25) (.25)
Net gains (losses) (both realized and unrealized) .98 (5.86) 3.14 2.65 .38
---------------------------------------------------------------------------------------------------------------------
Total from investment operations .88 (6.00) 2.90 2.40 .13
---------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(a) -- .12 -- -- --
---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.41) (1.63) (.50) --
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.06 $7.18 $15.47 $14.20 $12.30
---------------------------------------------------------------------------------------------------------------------
Total return 12.26% (44.36%)(a) 22.53% 20.14% 1.07%
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 2.90% 2.31% 2.15% 2.23% 2.25%
---------------------------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 2.14% 2.23% 2.15% 2.23% 2.25%
---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (1.21%) (1.39%) (1.72%) (1.86%) (1.94%)
---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $-- $-- $--
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162% 156% 116% 92% 96%
---------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
110
Seligman Frontier Fund - Class R3
<Table>
<Caption>
PER SHARE DATA:
Period ended Oct. 31, 2009(d)
Net asset value, beginning of period $8.03
------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.02)
Net gains (losses) (both realized and unrealized) .06
------------------------------------------------------------------------------------------------
Total from investment operations .04
------------------------------------------------------------------------------------------------
Net asset value, end of period $8.07
------------------------------------------------------------------------------------------------
Total return .50%
------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 2.00%(e)
------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 1.62%(e)
------------------------------------------------------------------------------------------------
Net investment income (loss) (.94%)(e)
------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
------------------------------------------------------------------------------------------------
Portfolio turnover rate 162%
------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
111
Seligman Frontier Fund - Class R4
<Table>
<Caption>
PER SHARE DATA:
Period ended Oct. 31, 2009(d)
Net asset value, beginning of period $8.65
------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.01)
Net gains (losses) (both realized and unrealized) .06
------------------------------------------------------------------------------------------------
Total from investment operations .05
------------------------------------------------------------------------------------------------
Net asset value, end of period $8.70
------------------------------------------------------------------------------------------------
Total return .58%
------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 1.53%(e)
------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 1.37%(e)
------------------------------------------------------------------------------------------------
Net investment income (loss) (.56%)(e)
------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $--
------------------------------------------------------------------------------------------------
Portfolio turnover rate 162%
------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
112
Seligman Frontier Fund - Class R5*
<Table>
<Caption>
PER SHARE DATA:
Year ended Oct. 31, 2009 2008 2007 2006 2005
Net asset value, beginning of period $7.71 $16.30 $14.76 $12.67 $12.39
---------------------------------------------------------------------------------------------------------------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income (loss) (.06) (.06) (.13) (.13) (.13)
Net gains (losses) (both realized and unrealized) 1.06 (6.24) 3.30 2.72 .41
---------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.00 (6.30) 3.17 2.59 .28
---------------------------------------------------------------------------------------------------------------------
Proceeds from regulatory settlement(a) -- .12 -- -- --
---------------------------------------------------------------------------------------------------------------------
LESS DISTRIBUTIONS:
Distributions from realized gains -- (2.41) (1.63) (.50) --
---------------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.71 $7.71 $16.30 $14.76 $12.67
---------------------------------------------------------------------------------------------------------------------
Total return 12.97% (43.87%)(a) 23.62% 21.08% 2.26%
---------------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 1.88% 1.39% 1.29% 1.33% 1.33%
---------------------------------------------------------------------------------------------------------------------
Net expenses after expense waiver/
reimbursement(c) 1.68% 1.39% 1.29% 1.33% 1.33%
---------------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.55%) (.55%) (.86%) (.96%) (1.02%)
---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $1 $3 $5 $4 $4
---------------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 162% 156% 116% 92% 96%
---------------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
* Effective June 13, 2009, Class R and Class I shares were redesignated as
Class R2 and Class R5 shares, respectively.
(a) 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, Class B, Class
C, Class R2 and Class R5 would have been (44.93%), (45.33%), (45.10%),
(45.10%), and (44.62%), respectively.
(b) 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 underlying
funds in which the Fund invests. Such indirect expenses are not included in
the reported expense ratios.
(c) The Investment Manager and its affiliates have agreed to waive/reimburse
certain fees and expenses (excluding fees and expenses of underlying funds).
(d) For the period from Aug. 3, 2009 (when shares became publicly available) to
Oct. 31, 2009.
(e) Annualized.
113
RiverSource Partners International Small Cap Fund - Class A
<Table>
<Caption>
PER SHARE DATA:
Year ended Oct. 31, 2009 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) .03 .04 .02 .02 .03
Net gains (losses) (both realized and unrealized) 1.23 (5.43) 2.92 1.58 1.32
----------------------------------------------------------------------------------------------------------------
Total from investment operations 1.26 (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)(a) -- -- --
----------------------------------------------------------------------------------------------------------------
Total distributions -- (1.08) (2.00) (1.06) (.44)
----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $5.08 $3.82 $10.29 $9.35 $8.81
----------------------------------------------------------------------------------------------------------------
Total return 32.98% (57.59%) 37.16% 19.71% 17.70%
----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 2.46% 1.97% 1.90% 1.83% 1.99%
----------------------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 1.66% 1.72% 1.82% 1.81% 1.94%
----------------------------------------------------------------------------------------------------------------
Net investment income (loss) .66% .60% .22% .25% .40%
----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $25 $27 $91 $67 $66
----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 174% 87% 96% 157% 80%
----------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
114
RiverSource Partners International Small Cap Fund - Class B
<Table>
<Caption>
PER SHARE DATA:
Year ended Oct. 31, 2009 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(a) (.01) (.05) -- (.03)
Net gains (losses) (both realized and unrealized) 1.18 (5.26) 2.83 1.51 1.29
----------------------------------------------------------------------------------------------------------------
Total from investment operations 1.18 (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)(a) -- -- --
----------------------------------------------------------------------------------------------------------------
Total distributions -- (1.00) (1.93) (1.00) (.44)
----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.87 $3.69 $9.96 $9.11 $8.60
----------------------------------------------------------------------------------------------------------------
Total return 31.98% (57.91%) 35.94% 18.92% 16.77%
----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 3.24% 2.73% 2.65% 2.60% 2.75%
----------------------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 2.43% 2.48% 2.58% 2.58% 2.71%
----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.08%) (.19%) (.54%) (.50%) (.33%)
----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $4 $5 $19 $17 $17
----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 174% 87% 96% 157% 80%
----------------------------------------------------------------------------------------------------------------
</Table>
See accompanying Notes to Financial Highlights.
115
RiverSource Partners International Small Cap Fund - Class C
<Table>
<Caption>
PER SHARE DATA:
Year ended Oct. 31, 2009 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(a) (.01) (.05) -- (.03)
Net gains (losses) (both realized and unrealized) 1.18 (5.25) 2.84 1.51 1.29
----------------------------------------------------------------------------------------------------------------
Total from investment operations 1.18 (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)(a) -- -- --
----------------------------------------------------------------------------------------------------------------
Total distributions -- (1.02) (1.94) (1.01) (.44)
----------------------------------------------------------------------------------------------------------------
Net asset value, end of period $4.87 $3.69 $9.97 $9.12 $8.62
----------------------------------------------------------------------------------------------------------------
Total return 31.98% (57.87%) 36.02% 18.90% 16.73%
----------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS(b)
Gross expenses prior to expense waiver/reimbursement 3.24% 2.73% 2.66% 2.61% 2.77%
----------------------------------------------------------------------------------------------------------------
Net expenses after expense waiver/reimbursement(c) 2.42% 2.48% 2.58% 2.59% 2.71%
----------------------------------------------------------------------------------------------------------------
Net investment income (loss) (.10%) (.18%) (.54%) (.56%) (.34%)
----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets, end of period (in millions) $-- $-- $1 $1 $1
----------------------------------------------------------------------------------------------------------------
Portfolio turnover rate 174% 87% 96% 157% 80%
----------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO FINANCIAL HIGHLIGHTS
(a) Rounds to zero.
(b) 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 reported expense ratios.
(c) 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.
116
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).
117
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, 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 the 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, Seligman Frontier 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
The Fund may, from time to time, take temporary defensive positions that are
inconsistent with its principal strategies in seeking to minimize extreme
volatility caused by adverse market, economic, political, or other conditions.
This could prevent the Fund from achieving its objective.
For RiverSource Partners International Small Cap Fund:
Change in Subadviser(s). From time to time, the investment manager may add or
change unaffiliated subadvisers. See "Fund Management and Compensation,
Investment Manager." The date the current Subadviser(s) began serving the Fund
is set forth under "Fund Management and Compensation, Investment Manager." When
applicable, performance of the Fund prior to the date the current Subadviser(s)
began serving was achieved by different subadviser(s). Similarly, the portfolio
turnover rate shown in the "Financial Highlights" applies to the subadviser(s)
serving during the relevant time-period. A change in subadviser(s) may result in
increased portfolio turnover.
Multi-Manager Risk. While RiverSource Investments, as the Fund's investment
manager, monitors each subadviser and the overall management of the Fund, to the
extent the Fund has multiple subadvisers, each subadviser makes investment
decisions independently from the other subadvisers. It is possible that the
security selection process of one subadviser will not complement that of the
other subadvisers. As a result, the Fund's exposure to a given security,
industry, sector or market capitalization could be smaller or larger than if the
Fund were managed by a single subadviser, which could affect the Fund's
performance.
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:
For RiverSource Mid Cap Growth Fund, RiverSource Mid Cap Value Fund, RiverSource
Partners International Small Cap Fund, Seligman Smaller-Cap Value Fund and
Seligman Frontier Fund:
Portfolio Turnover. Trading of securities may produce capital gains, which are
taxable to shareholders when distributed. Active trading may also increase the
amount of brokerage commissions paid or mark-ups to broker-dealers that the Fund
pays when it buys and sells securities. For subadvised funds, a change in a
subadviser may result in increased portfolio turnover, which increase may be
substantial, as the new subadviser realigns the portfolio, or if the
subadviser(s) trades portfolio securities more frequently. A realignment or more
active strategy could produce higher than expected capital gains. Capital gains
and increased brokerage commissions or mark-ups paid to broker-dealers may
adversely affect a fund's performance. The Fund's historical portfolio turnover
rate, which measures how frequently the Fund buys and sells investments from
year-to-year, is shown in the "Financial Highlights."
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
C.2
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, RiverSource Partners funds, Seligman funds and
Threadneedle 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 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 and 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 0.78%
RiverSource Mid Cap Value Fund 0.57%
RiverSource Partners International Small Cap Fund 1.02%
Seligman Frontier Fund 0.93%*
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 0.45% 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.
C.3
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. A discussion regarding the basis for the Board approving
the IMS Agreement is available in the RiverSource Mid Cap Growth Fund semiannual
report for the period ended May 31, 2009, in the RiverSource Mid Cap Value Fund
annual report for the period ended Sept. 30, 2009 and in the RiverSource
Partners International Small Cap Fund semiannual report for the period ended
April 30, 2009. 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.
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:
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.
C.4
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.
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.
C.5
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 subsidiary of Bank of America Corporation ("BAC").
On September 29, 2009, BAC entered into an agreement to sell a portion of the
asset management business of Columbia Management Group, LLC, including Columbia
WAM, to Ameriprise Financial, Inc., the parent company of RiverSource
Investments (the "Transaction"). The Transaction is subject to certain approvals
and other conditions to closing, and is currently expected to close in the
spring of 2010.
The Transaction is not expected to result in any change in the Columbia WAM
personnel who manage the Fund or in the manner in which the Fund is managed. In
addition, RiverSource Investments would remain the investment manager of the
Fund and, as such, would continue to be the entity that oversees the overall
management of the Fund. Nonetheless, the Transaction is expected to result in a
change of control of Columbia WAM under the federal securities laws and thus
would cause the automatic termination of the current investment sub-advisory
agreement with Columbia WAM. In connection with the Transaction, the Board
determined to recommend that shareholders approve a new investment sub-advisory
agreement in order to assure that Columbia WAM may continue to provide sub-
advisory services to the Fund following the Transaction. The services provided
by Columbia WAM under the new investment sub-advisory agreement and the fee
levels payable to Columbia WAM for sub-advisory services would remain unchanged
from the services provided and fee levels payable under the current investment
sub-advisory agreement. 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.
----------
(*) On September 30, 2009, Ameriprise Financial, Inc., the parent company of
RiverSource Investments, LLC. the Fund's investment manager (RiverSource),
announced the acquisition of the long-term asset management business of Columbia
Management Group, LLC, and its affiliated companies (Columbia) (the Columbia
Transaction). The Columbia Transaction is subject to certain approvals and other
conditions to closing, and is currently expected the spring of 2010 (the
"Closing").
In connection with the anticipated integration of the long-term asset management
businesses of Columbia and RiverSource following the Closing, RiverSource has
determined that Seligman Frontier Fund's portfolio manager primarily responsible
for overseeing Seligman Frontier Fund's investments, effective upon and subject
to the Closing, will be as follows:
WAYNE M. COLLETTE, CFA
Managing Director of Columbia Management Advisors, LLC; associated with Columbia
Management Advisors, LLC or its predecessors as an investment professional since
March 2001.
Pending the Closing, each of the portfolio managers set forth in the Fund's
prospectus is expected to continue in his current role.
C.6
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 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.7
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.8
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.9
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.10
Class R and Class Y 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, AND CLASS Y SHARES, THE DISTRIBUTOR, IN ITS
SOLE DISCRETION, MAY ACCEPT OR AUTHORIZE FINANCIAL INTERMEDIARIES TO ACCEPT
INVESTMENTS FROM OTHER INSTITUTIONAL INVESTORS NOT LISTED ABOVE.
IN ADDITION, FOR CLASS W SHARES, THE DISTRIBUTORS, IN ITS SOLE DISCRETION, MAY
ACCEPT OR AUTHORIZE FINANCIAL INTERMEDIARIES TO ACCEPT INVESTMENTS FROM OTHER
INVESTORS 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.11
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.12
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.13
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.14
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.15
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.16
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.17
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.18
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.19
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.20
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.21
<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.22
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.23
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.24
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.25
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.26
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.27
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.28
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
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</Table>
D.1
<Table>
<Caption>
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FUNDS ORGANIZED AS A MARYLAND FUNDS ORGANIZED AS A MINNESOTA
POLICY CORPORATION CORPORATION
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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
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</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>
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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>
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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 RIVERSOURCE FUNDS PROXY
SELIGMAN FUNDS
NOTICE OF A JOINT SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 10, 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 10, 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 INSTRUCTIONS POSTAGE-PAID ENVELOPE 710 MARQUETTE AVENUE
AVAILABLE 24 HOURS AVAILABLE 24 HOURS MINNEAPOLIS, MN 55402
ON MARCH 10, 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 10, 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. 27, 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. 27, 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 1 (866) 859-8682.
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, RiverSource Partners International Small Cap Fund, and
Seligman Frontier Fund, dated Jan. 22, 2010, as supplemented today;
- the most recent SAI for Seligman Global Smaller Companies Fund, dated Dec.
30, 2009, as supplemented today;
- the most recent SAI for RiverSource Government Money Market Fund (formerly
Seligman Cash Management 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.................................. 18
Pro Forma Combining Statement of Assets and Liabilities....................... 19
Pro Forma Combining Statement of Operations................................... 20
Notes to Pro Forma Financial Statements....................................... 21
Combined Portfolio of Investments............................................. 23
For Proposal 3:
Seligman Smaller-Cap Value Fund Pro Forma Financials
Introduction to Proposed Fund Reorganization.................................. 33
Pro Forma Combining Statement of Assets and Liabilities....................... 34
Pro Forma Combining Statement of Operations................................... 35
Notes to Pro Forma Financial Statements....................................... 36
Combined Portfolio of Investments............................................. 38
For Proposal 4:
Seligman Frontier Fund Pro Forma Financials
Introduction to Proposed Fund Reorganization.................................. 52
Pro Forma Combining Statement of Assets and Liabilities....................... 53
Pro Forma Combining Statement of Operations................................... 54
Notes to Pro Forma Financial Statements....................................... 55
Combined Portfolio of Investments............................................. 57
For Proposal 5:
Riversource Partners International Small Cap Fund Pro Forma Financials
Introduction to Proposed Fund Reorganization.................................. 62
Pro Forma Combining Statement of Assets and Liabilities....................... 63
Pro Forma Combining Statement of Operations................................... 64
Notes to Pro Forma Financial Statements....................................... 65
Combined Portfolio of Investments............................................. 67
For Proposal 6:
Riversource Government Money Market Fund Financials
Introduction to Proposed Fund Reorganization.................................. 84
Pro Forma Combining Statement of Assets and Liabilities....................... 85
Pro Forma Combining Statement of Operations................................... 86
Notes to Pro Forma Financial Statements....................................... 87
Combined Portfolio of Investments............................................. 89
</Table>
3
RIVERSOURCE MID CAP GROWTH FUND (BUYING FUND)
RIVERSOURCE PARTNERS AGGRESSIVE GROWTH FUND (SELLING FUND)
INTRODUCTION TO PROPOSED FUND REORGANIZATION
Nov. 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 Nov. 30, 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 Nov. 30,
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 on or about March 15, 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 Nov. 30, 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
NOV. 30, 2009 (UNAUDITED) GROWTH FUND GROWTH FUND ADJUSTMENTS PRO FORMA COMBINED
ASSETS
Investments in securities, at cost
Unaffiliated issuers $665,462,865 $ 314,065,361 $ -- $ 979,528,226
Affiliated money market fund 10,609,785 10,378,667 -- 20,988,452
Investments of cash collateral received for
securities on loan 189,894,491 86,927,234 -- 276,821,725
------------------------------------------------------------
Investments in securities, at value
Unaffiliated issuers* 673,721,682 318,945,938 -- 992,667,620
Affiliated money market fund 10,609,785 10,378,667 -- 20,988,452
Investments of cash collateral received for
securities on loan 189,894,491 86,927,234 -- 276,821,725
Capital shares receivable 516,593 42,487 -- 559,080
Dividends and accrued interest receivable 682,153 254,633 -- 936,786
Receivable for investment securities sold 3,744,304 2,112,441 -- 5,856,745
------------------------------------------------------------------------------------------------------------------
Total assets 879,169,008 418,661,400 -- 1,297,830,408
------------------------------------------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 517,437 294,501 -- 811,938
Payable for investment securities purchased 1,200,795 3,667,377 -- 4,868,172
Payable upon return of securities loaned 189,894,491 86,927,234 -- 276,821,725
Accrued investment management services fees 39,596 24,007 -- 63,603
Accrued distribution fees 140,042 57,062 -- 197,104
Accrued transfer agency fees 10,813 8,653 -- 19,466
Accrued administrative services fees 3,317 1,618 -- 4,935
Accrued plan administration services fees 899 47 -- 946
Other accrued expenses 115,451 91,657 -- 207,108
------------------------------------------------------------------------------------------------------------------
Total liabilities 191,922,841 91,072,156 -- 282,994,997
------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $687,246,167 $ 327,589,244 $ -- $1,014,835,411
------------------------------------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.01 par value (Note 3) $ 810,690 $ 466,604 $ (83,309) $ 1,193,985
Additional paid-in capital (Note 3) 753,374,278 801,502,812 83,309 1,554,960,399
Excess of distributions over net investment income (13,715) (949,559) -- (963,274)
Accumulated net realized gain (loss) (75,183,903) (478,313,623) -- (553,497,526)
Unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in
foreign currencies 8,258,817 4,883,010 -- 13,141,827
------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding capital stock $687,246,167 $ 327,589,244 $ -- $1,014,835,411
------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding
shares: Class A $553,923,464 $ 223,516,959 $ -- $ 777,440,423
Class B $ 50,253,513 $ 23,730,194 $ -- $ 73,983,707
Class C $ 7,874,750 $ 1,782,422 $ -- $ 9,657,172
Class I $ 71,139,006 $ 78,342,085 $ -- $ 149,481,091
Class R2 $ -- $ 89,806 $ -- $ 89,806
Class R3 $ -- $ 21,869 $ -- $ 21,869
Class R4 $ 4,055,434 $ 101,826 $ -- $ 4,157,260
Class R5 $ -- $ 4,083 $ -- $ 4,083
Shares outstanding
(Note 3): Class A shares 64,580,896 31,886,138 (5,835,210) 90,631,824
Class B shares 7,048,364 3,560,434 (232,216) 10,376,582
Class C shares 1,103,661 267,249 (17,610) 1,353,300
Class I shares 7,877,330 10,915,748 (2,239,991) 16,553,087
Class R2 shares -- 12,848 (2,381) 10,467
Class R3 shares -- 3,096 (547) 2,549
Class R4 shares 458,745 14,307 (2,788) 470,264
Class R5 shares -- 572 (120) 452
Net asset value per share of outstanding capital
stock: Class A $ 8.58 $ 7.01 $ 8.58
Class B $ 7.13 $ 6.66 $ 7.13
Class C $ 7.14 $ 6.67 $ 7.14
Class I $ 9.03 $ 7.18 $ 9.03
Class R2 $ -- $ 6.99 $ 8.58
Class R3 $ -- $ 7.06 $ 8.58
Class R4 $ 8.84 $ 7.12 $ 8.84
Class R5 $ -- $ 7.14 $ 9.03
------------------------------------------------------------------------------------------------------------------
* Including securities on loan, at value $184,665,642 $ 84,603,742 $ -- $ 269,269,384
------------------------------------------------------------------------------------------------------------------
</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
YEAR ENDED NOV. 30, 2009 (UNAUDITED) GROWTH FUND GROWTH FUND PRO FORMA ADJUSTMENTS PRO FORMA COMBINED
INVESTMENT INCOME
Income:
Dividends $ 4,073,481 $ 1,879,350 $ -- $ 5,952,831
Interest 2,839 198 -- 3,037
Income distributions from affiliated
money market fund 48,425 15,085 -- 63,510
Income from securities lending -- net 1,509,309 340,232 -- 1,849,541
Less foreign taxes withheld (9,740) (13,136) -- (22,876)
-------------------------------------------------------------------------------------------------------------------------
Total income 5,624,314 2,221,729 -- 7,846,043
-------------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees
(Note 2) 4,488,355 2,369,459 27,832(a) 6,885,646
Distribution fees
Class A 1,123,363 524,281 -- 1,647,644
Class B 500,167 277,362 -- 777,529
Class C 46,013 17,356 -- 63,369
Class R2 -- 374 -- 374
Class R3 -- 35 -- 35
Transfer agency fees (Note 2)
Class A 1,175,439 1,018,494 112,186(b) 2,306,119
Class B 146,445 144,705 6,525(b) 297,675
Class C 11,994 8,666 1,792(b) 22,452
Class R2 -- 37 -- 37
Class R3 -- 7 -- 7
Class R4 1,616 61 -- 1,677
Class R5 -- 2 -- 2
Administrative services fees (Note 2) 339,961 188,022 (17,457)(c) 510,526
Plan administration services fees
Class R2 -- 186 -- 186
Class R3 -- 35 -- 35
Class R4 8,078 305 -- 8,383
Compensation of board members 17,329 9,378 -- 26,707
Custodian fees 26,480 25,930 -- 52,410
Printing and postage 71,825 97,675 -- 169,500
Registration fees (Note 2) 78,625 46,565 (23,283)(d) 101,907
Professional fees (Note 2) 32,904 27,062 (22,430)(e) 37,536
Other 55,280 19,986 -- 75,266
-------------------------------------------------------------------------------------------------------------------------
Total expenses 8,123,874 4,775,983 85,165 12,985,022
Expenses waived/reimbursed by
RiverSource Investments, LLC (Note
2) (1,374) (1,236,111) 246,043(f) (991,442)
-------------------------------------------------------------------------------------------------------------------------
Total net expenses 8,122,500 3,539,872 331,208 11,993,580
-------------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net (2,498,186) (1,318,143) (331,208) (4,147,537)
-------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (44,948,235) (15,390,948) -- (60,339,183)
Foreign currency transactions -- (205,594) -- (205,594)
Options contracts written 275,538 -- -- 275,538
-------------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (44,672,697) (15,596,542) -- (60,269,239)
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities
in foreign currencies 314,466,458 84,413,723 -- 398,880,181
-------------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments and
foreign currencies 269,793,761 68,817,181 -- 338,610,942
-------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
resulting from operations $267,295,575 $ 67,499,038 $(331,208) $334,463,405
-------------------------------------------------------------------------------------------------------------------------
</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 Nov. 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 Nov. 30, 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 Nov. 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 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 (for at least one year
following the Reorganization) by RiverSource Investments, LLC and its
affiliates to waive certain fees and absorb certain expenses of the combined
fund.
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 Nov. 30, 2009, in connection with the
Reorganization. The pro forma adjustments on the Statement of Assets and
Liabilities reflect the net effect of the issuance of additional RiverSource Mid
Cap Growth Fund shares. 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>
SHARES OF RIVERSOURCE
MID CAP GROWTH FUND
ISSUED TO SHAREHOLDERS OF RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND TOTAL PRO FORMA
AGGRESSIVE GROWTH FUND SHARES OUTSTANDING SHARES OUTSTANDING
-----------------------------------------------------------------------------------------------------------------------
Class A 26,050,928 64,580,896 90,631,824
-----------------------------------------------------------------------------------------------------------------------
Class B 3,328,218 7,048,364 10,376,582
-----------------------------------------------------------------------------------------------------------------------
Class C 249,639 1,103,661 1,353,300
-----------------------------------------------------------------------------------------------------------------------
Class I 8,675,757 7,877,330 16,553,087
-----------------------------------------------------------------------------------------------------------------------
Class R2* 10,467 N/A 10,467
-----------------------------------------------------------------------------------------------------------------------
Class R3* 2,549 N/A 2,549
-----------------------------------------------------------------------------------------------------------------------
Class R4 11,519 458,745 470,264
-----------------------------------------------------------------------------------------------------------------------
Class R5* 452 N/A 452
-----------------------------------------------------------------------------------------------------------------------
</Table>
* The inception date for the RiverSource Mid Cap Growth Fund Class R2, Class
R3 and Class R5 shares is expected to be on or about March 15, 2010.
8
COMBINED PORTFOLIO OF INVESTMENTS
RiverSource Mid Cap Growth Fund
NOV. 30, 2009 (UNAUDITED)
(Percentages represent value of investments compared to pro forma combined net
assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (97.6%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
RIVERSOURCE MID CAP RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND RIVERSOURCE PARTNERS GROWTH FUND
MID CAP AGGRESSIVE PRO FORMA MID CAP AGGRESSIVE PRO FORMA
GROWTH FUND GROWTH FUND COMBINED GROWTH FUND GROWTH FUND COMBINED
AEROSPACE & DEFENSE (0.8%)
BE Aerospace -- 64,621(d) 64,621(b) $ -- $ 1,245,247 $ 1,245,247
Precision Castparts 29,322 33,561 62,883 3,040,105 3,479,604 6,519,709
-----------------------------------------------
Total 3,040,105 4,724,851 7,764,956
-----------------------------------------------
AIR FREIGHT & LOGISTICS (1.1%)
CH Robinson
Worldwide 52,950(d) 38,700(d) 91,650 2,951,433 2,157,138 5,108,571
Expeditors Intl of
Washington 110,100 63,700 173,800 3,515,493 2,033,941 5,549,434
-----------------------------------------------
Total 6,466,926 4,191,079 10,658,005
-----------------------------------------------
BIOTECHNOLOGY (3.4%)
BioMarin
Pharmaceutical 491,280(d) 222,507(d) 713,787(b) 8,111,032 3,673,591 11,784,623
Celera 277,024(d) -- 277,024(b) 1,728,630 -- 1,728,630
Cephalon 125,045(d) 67,200(d) 192,245(b) 6,871,223 3,692,639 10,563,862
Genzyme 136,721(d) 67,354 204,075(b) 6,931,755 3,414,848 10,346,603
-----------------------------------------------
Total 23,642,640 10,781,078 34,423,718
-----------------------------------------------
CAPITAL MARKETS (1.6%)
E*TRADE Financial 2,315,683(d) 936,416 3,252,099(b) 3,797,720 1,535,722 5,333,442
Janus Capital Group 187,422 167,908(d) 355,330 2,453,354 2,197,916 4,651,270
Legg Mason 95,316(d) 113,556(d) 208,872 2,696,490 3,212,499 5,908,989
-----------------------------------------------
Total 8,947,564 6,946,137 15,893,701
-----------------------------------------------
CHEMICALS (1.3%)
Airgas 47,028 24,370 71,398 2,175,045 1,127,113 3,302,158
CF Inds Holdings -- 9,790 9,790 -- 835,674 835,674
Ecolab 54,235 39,720 93,955 2,435,693 1,783,825 4,219,518
Mosaic 41,088 -- 41,088 2,237,242 -- 2,237,242
Potash Corp of
Saskatchewan 13,633 -- 13,633(c) 1,532,622 -- 1,532,622
Scotts Miracle-Gro
Cl A -- 21,659(d) 21,659 -- 864,844 864,844
-----------------------------------------------
Total 8,380,602 4,611,456 12,992,058
-----------------------------------------------
COMMERCIAL BANKS (1.9%)
Huntington
Bancshares 530,351(d) 216,800(d) 747,151 2,025,941 828,176 2,854,117
Marshall & Ilsley 1,117,133(d) 533,503(d) 1,650,636 6,423,514 3,067,642 9,491,156
Regions Financial 856,739 317,400(d) 1,174,139 5,020,491 1,859,964 6,880,455
-----------------------------------------------
Total 13,469,946 5,755,782 19,225,728
-----------------------------------------------
COMMUNICATIONS EQUIPMENT (5.5%)
BigBand Networks 458,236 110,900 569,136(b) 1,645,067 398,131 2,043,198
Ciena 1,601,943(d) 750,943(d) 2,352,886(b) 19,463,606 9,123,958 28,587,564
CommScope -- 48,930 48,930(b) -- 1,229,611 1,229,611
F5 Networks 29,863 35,000 64,863(b) 1,404,457 1,646,050 3,050,507
Infinera 613,821 139,800 753,621(b) 5,051,747 1,150,554 6,202,301
Juniper Networks 219,431 54,040 273,471(b) 5,733,732 1,412,065 7,145,797
ORBCOMM 1,211,319 153,900 1,365,219(b) 2,858,713 363,204 3,221,917
Riverbed Technology 131,978(d) 76,700 208,678(b) 2,687,072 1,561,612 4,248,684
-----------------------------------------------
Total 38,844,394 16,885,185 55,729,579
-----------------------------------------------
COMPUTERS & PERIPHERALS (1.3%)
STEC 63,042(d) 26,900(d) 89,942(b) 781,090 333,291 1,114,381
Synaptics 306,263(d) 159,900(d) 466,163(b) 8,250,726 4,307,706 12,558,432
-----------------------------------------------
Total 9,031,816 4,640,997 13,672,813
-----------------------------------------------
</Table>
9
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
RIVERSOURCE MID CAP RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND RIVERSOURCE PARTNERS GROWTH FUND
MID CAP AGGRESSIVE PRO FORMA MID CAP AGGRESSIVE PRO FORMA
GROWTH FUND GROWTH FUND COMBINED GROWTH FUND GROWTH FUND COMBINED
CONSTRUCTION AND ENGINEERING (2.8%)
AECOM Technology -- 85,258 85,258(b) $ -- $ 2,165,553 $ 2,165,553
EMCOR Group 185,389 83,800 269,189(b) 4,412,258 1,994,440 6,406,698
Fluor 86,901 37,300 124,201 3,691,554 1,584,504 5,276,058
Foster Wheeler 85,954 50,900 136,854(b) 2,564,867 1,518,856 4,083,723
Quanta Services 324,065 91,706 415,771(b) 6,076,219 1,719,488 7,795,707
Shaw Group 104,650 -- 104,650(b) 2,985,665 -- 2,985,665
-----------------------------------------------
Total 19,730,563 8,982,841 28,713,404
-----------------------------------------------
CONSTRUCTION MATERIALS (0.8%)
Martin Marietta
Materials 35,799(d) 16,600 52,399 3,053,296 1,415,814 4,469,110
Vulcan Materials 58,268(d) 27,300(d) 85,568 2,824,833 1,323,504 4,148,337
-----------------------------------------------
Total 5,878,129 2,739,318 8,617,447
-----------------------------------------------
CONSUMER FINANCE (0.3%)
First Marblehead 1,296,157(d) -- 1,296,157(b) 2,683,045 -- 2,683,045
-----------------------------------------------
DISTRIBUTORS (0.4%)
LKQ 134,976(d) 78,500(d) 213,476(b) 2,352,632 1,368,255 3,720,887
-----------------------------------------------
DIVERSIFIED CONSUMER SERVICES (0.3%)
Apollo Group Cl A 40,453 17,900 58,353(b) 2,308,653 1,021,553 3,330,206
-----------------------------------------------
DIVERSIFIED FINANCIAL SERVICES (1.4%)
IntercontinentalEx-
change 57,251 30,972(d) 88,223(b) 6,113,835 3,307,500 9,421,335
NASDAQ OMX Group 169,733 84,800(d) 254,533(b) 3,170,612 1,584,064 4,754,676
-----------------------------------------------
Total 9,284,447 4,891,564 14,176,011
-----------------------------------------------
ELECTRIC UTILITIES (0.6%)
PPL 146,980 64,900 211,880 4,485,830 1,980,748 6,466,578
-----------------------------------------------
ELECTRICAL EQUIPMENT (3.5%)
American
Superconductor 49,325(d) -- 49,325(b) 1,637,590 -- 1,637,590
Energy Conversion
Devices 323,315(d) 153,800(d) 477,115(b) 3,207,285 1,525,696 4,732,981
Evergreen Solar 2,236,254(d) 916,100(d) 3,152,354(b) 3,130,756 1,282,540 4,413,296
First Solar 54,089(d) 22,600(d) 76,689(b) 6,442,540 2,691,886 9,134,426
Hubbell Cl B 61,168 19,000 80,168 2,777,639 862,790 3,640,429
JA Solar Holdings
ADR 395,851(d) 192,800 588,651(b,c) 1,539,860 749,992 2,289,852
Real Goods Solar Cl
A 636,623 71,779(d) 708,402(b) 1,967,165 221,797 2,188,962
SunPower Cl A 105,023(d) 56,300(d) 161,323(b) 2,170,825 1,163,721 3,334,546
Suntech Power
Holdings ADR 81,844(d) -- 81,844(b,c) 1,223,568 -- 1,223,568
Yingli Green Energy
Holding ADR 145,541(d) 67,600 213,141(b,c) 2,068,138 960,596 3,028,734
-----------------------------------------------
Total 26,165,366 9,459,018 35,624,384
-----------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (1.0%)
Itron 118,893(d) 51,400(d) 170,293(b) 7,227,505 3,124,606 10,352,111
-----------------------------------------------
ENERGY EQUIPMENT & SERVICES (4.2%)
BJ Services 125,395 68,600 193,995 2,354,918 1,288,308 3,643,226
ENSCO Intl 96,166(d) 43,300 139,466 4,231,304 1,905,200 6,136,504
Hercules Offshore 1,031,587(d) 369,600(d) 1,401,187(b) 5,271,410 1,888,656 7,160,066
Natl Oilwell Varco 77,749 -- 77,749 3,344,762 -- 3,344,762
Noble 47,296 -- 47,296(c) 1,953,798 -- 1,953,798
Oceaneering Intl -- 24,174 24,174(b) -- 1,320,626 1,320,626
Smith Intl 448,334(d) 234,862(d) 683,196 12,185,718 6,383,549 18,569,267
-----------------------------------------------
Total 29,341,910 12,786,339 42,128,249
-----------------------------------------------
FOOD & STAPLES RETAILING (0.5%)
BJ's Wholesale Club 107,138 44,600(d) 151,738(b) 3,718,760 1,548,066 5,266,826
-----------------------------------------------
</Table>
10
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
RIVERSOURCE MID CAP RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND RIVERSOURCE PARTNERS GROWTH FUND
MID CAP AGGRESSIVE PRO FORMA MID CAP AGGRESSIVE PRO FORMA
GROWTH FUND GROWTH FUND COMBINED GROWTH FUND GROWTH FUND COMBINED
FOOD PRODUCTS (1.0%)
Dean Foods 148,023 36,800 184,823(b) $ 2,353,566 $ 585,120 $ 2,938,686
HJ Heinz 128,564 46,800(d) 175,364 5,457,542 1,986,660 7,444,202
-----------------------------------------------
Total 7,811,108 2,571,780 10,382,888
-----------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (4.4%)
Beckman Coulter -- 25,390 25,390 -- 1,649,334 1,649,334
CR Bard 61,853 28,809 90,662 5,084,935 2,368,388 7,453,323
Gen-Probe 87,067(d) 21,500 108,567(b) 3,629,823 896,335 4,526,158
Haemonetics 52,755(d) 24,200 76,955(b) 2,816,062 1,291,796 4,107,858
Hologic 350,484 173,265(d) 523,749(b) 5,071,503 2,507,145 7,578,648
Masimo 89,522(d) 41,500(d) 131,022(b) 2,359,800 1,093,940 3,453,740
St. Jude Medical 78,708 -- 78,708(b) 2,889,371 -- 2,889,371
Thoratec 195,057(d) 104,500(d) 299,557(b) 5,810,749 3,113,055 8,923,804
Varian Medical
Systems 66,180(d) 28,900 95,080(b) 3,093,253 1,350,786 4,444,039
-----------------------------------------------
Total 30,755,496 14,270,779 45,026,275
-----------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (3.1%)
AmerisourceBergen 115,940(d) 54,350 170,290 2,862,559 1,341,902 4,204,461
Emdeon Cl A 217,629 98,900 316,529(b) 3,284,022 1,492,401 4,776,423
Laboratory Corp of
America Holdings 24,947(d) 11,200 36,147(b) 1,820,133 817,152 2,637,285
MEDNAX 62,494(d) 14,800(d) 77,294(b) 3,512,788 831,908 4,344,696
Omnicare 82,877(d) 40,600 123,477 1,921,089 941,108 2,862,197
Patterson Companies 167,721(d) 92,900 260,621(b) 4,312,106 2,388,459 6,700,565
Select Medical
Holdings 435,461 205,103 640,564(b) 3,940,922 1,856,182 5,797,104
-----------------------------------------------
Total 21,653,619 9,669,112 31,322,731
-----------------------------------------------
HOTELS, RESTAURANTS & LEISURE (2.5%)
Burger King
Holdings 313,723(d) 138,700(d) 452,423 5,333,292 2,357,900 7,691,192
Darden Restaurants 60,801(d) 30,600 91,401 1,910,975 961,758 2,872,733
Intl Game
Technology -- 85,108 85,108 -- 1,607,690 1,607,690
Marriott Intl Cl A 95,976(d) 46,357 142,333 2,468,507 1,192,304 3,660,811
Panera Bread Cl A 46,316(d) -- 46,316(b) 2,916,055 -- 2,916,055
Pinnacle
Entertainment 214,696 43,287 257,983(b) 2,269,337 457,544 2,726,881
Starwood Hotels &
Resorts Worldwide 92,203(d) 39,090(d) 131,293 2,952,340 1,251,662 4,204,002
-----------------------------------------------
Total 17,850,506 7,828,858 25,679,364
-----------------------------------------------
HOUSEHOLD DURABLES (0.4%)
KB Home 124,767(d) 94,869(d) 219,636 1,690,593 1,285,475 2,976,068
Pulte Homes -- 129,800 129,800 -- 1,186,372 1,186,372
-----------------------------------------------
Total 1,690,593 2,471,847 4,162,440
-----------------------------------------------
HOUSEHOLD PRODUCTS (0.7%)
Clorox 70,084 17,500 87,584 4,223,963 1,054,725 5,278,688
Energizer Holdings -- 33,520(d) 33,520(b) -- 1,888,517 1,888,517
-----------------------------------------------
Total 4,223,963 2,943,242 7,167,205
-----------------------------------------------
INTERNET SOFTWARE & SERVICES (1.8%)
Akamai Technologies 184,668(d) 88,222(d) 272,890(b) 4,432,032 2,117,328 6,549,360
Equinix -- 28,775(d) 28,775(b) -- 2,767,867 2,767,867
Limelight Networks 932,072 384,500 1,316,572(b) 3,197,007 1,318,835 4,515,842
OpenTable 128,217(d) 46,600(d) 174,817(b) 3,393,904 1,233,502 4,627,406
-----------------------------------------------
Total 11,022,943 7,437,532 18,460,475
-----------------------------------------------
IT SERVICES (0.3%)
ManTech Intl Cl A 47,509(d) 29,100 76,609(b) 2,056,190 1,259,448 3,315,638
-----------------------------------------------
</Table>
11
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
RIVERSOURCE MID CAP RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND RIVERSOURCE PARTNERS GROWTH FUND
MID CAP AGGRESSIVE PRO FORMA MID CAP AGGRESSIVE PRO FORMA
GROWTH FUND GROWTH FUND COMBINED GROWTH FUND GROWTH FUND COMBINED
LEISURE EQUIPMENT & PRODUCTS (0.4%)
Eastman Kodak 319,579(d) -- 319,579 $ 1,294,295 $ -- $ 1,294,295
LeapFrog
Enterprises 851,615 198,800 1,050,415(b) 2,554,845 596,400 3,151,245
-----------------------------------------------
Total 3,849,140 596,400 4,445,540
-----------------------------------------------
LIFE SCIENCES TOOLS & SERVICES (0.7%)
Illumina 140,284(d) 60,006(d) 200,290(b) 4,057,013 1,735,374 5,792,387
Waters -- 24,590 24,590(b) -- 1,445,400 1,445,400
-----------------------------------------------
Total 4,057,013 3,180,774 7,237,787
-----------------------------------------------
MACHINERY (2.2%)
Badger Meter 49,718(d) 20,000(d) 69,718 1,749,079 703,600 2,452,679
Bucyrus Intl 26,757 12,783 39,540 1,385,745 662,032 2,047,777
Flowserve 22,192 11,601 33,793 2,207,216 1,153,835 3,361,051
Joy Global 33,107 19,048(d) 52,155 1,772,549 1,019,830 2,792,379
Kennametal 151,731 66,800 218,531 3,413,948 1,503,000 4,916,948
Mueller Water
Products Cl A 337,771 181,100 518,871 1,702,366 912,744 2,615,110
Terex 156,201(d) 42,060 198,261(b) 2,941,265 791,990 3,733,255
-----------------------------------------------
Total 15,172,168 6,747,031 21,919,199
-----------------------------------------------
MARINE (3.9%)
Diana Shipping 264,402 104,600 369,002(c) 4,111,451 1,626,530 5,737,981
DryShips 3,115,434(d) 1,211,700(d) 4,327,134(b,c) 19,066,456 7,415,604 26,482,060
Genco Shipping &
Trading 223,087(d) 101,200(d) 324,287(b) 5,238,083 2,376,176 7,614,259
-----------------------------------------------
Total 28,415,990 11,418,310 39,834,300
-----------------------------------------------
MEDIA (1.7%)
Regal Entertainment
Group Cl A 411,348 228,800 640,148 5,635,468 3,134,560 8,770,028
Sirius XM Radio 10,571,717 2,557,000 13,128,717(b) 6,660,181 1,610,910 8,271,091
-----------------------------------------------
Total 12,295,649 4,745,470 17,041,119
-----------------------------------------------
METALS & MINING (4.4%)
AK Steel Holding 164,249 77,720(d) 241,969 3,284,980 1,554,400 4,839,380
Alcoa 273,728(d) 84,420 358,148 3,427,075 1,056,938 4,484,013
Allegheny
Technologies 168,130(d) 75,700(d) 243,830 5,721,464 2,576,072 8,297,536
Cliffs Natural
Resources 114,957(d) 54,919(d) 169,876 5,065,005 2,419,731 7,484,736
Freeport-McMoRan
Copper & Gold 20,468 9,778(d) 30,246(b) 1,694,750 809,618 2,504,368
Kinross Gold 102,115 43,200 145,315(c) 2,044,342 864,864 2,909,206
Steel Dynamics 101,402 53,700 155,102 1,715,722 908,604 2,624,326
United States Steel 86,115(d) 55,100(d) 141,215 3,845,896 2,460,766 6,306,662
Yamana Gold 253,415 111,200 364,615(c) 3,378,022 1,482,296 4,860,318
-----------------------------------------------
Total 30,177,256 14,133,289 44,310,545
-----------------------------------------------
MULTILINE RETAIL (0.9%)
JC Penney 98,391(d) 40,726(d) 139,117 2,827,757 1,170,465 3,998,222
Nordstrom 76,277 69,705 145,982 2,551,466 2,331,632 4,883,098
-----------------------------------------------
Total 5,379,223 3,502,097 8,881,320
-----------------------------------------------
OIL, GAS & CONSUMABLE FUELS (7.1%)
Arch Coal 168,868(d) 38,200(d) 207,068 3,522,586 796,852 4,319,438
CONSOL Energy 73,466(d) 49,730 123,196 3,373,559 2,283,602 5,657,161
Denbury Resources 132,316(d) 71,800(d) 204,116(b) 1,755,833 952,786 2,708,619
Devon Energy 27,324 14,500 41,824 1,840,271 976,575 2,816,846
El Paso 481,374(d) 229,300 710,674 4,601,935 2,192,108 6,794,043
Frontier Oil 425,265 205,513(d) 630,778 4,903,305 2,369,565 7,272,870
GMX Resources 66,041(d) -- 66,041(b) 771,359 -- 771,359
Murphy Oil 39,069 16,400 55,469 2,203,101 924,796 3,127,897
Newfield
Exploration 64,290 -- 64,290(b) 2,718,181 -- 2,718,181
</Table>
12
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
RIVERSOURCE MID CAP RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND RIVERSOURCE PARTNERS GROWTH FUND
MID CAP AGGRESSIVE PRO FORMA MID CAP AGGRESSIVE PRO FORMA
GROWTH FUND GROWTH FUND COMBINED GROWTH FUND GROWTH FUND COMBINED
OIL, GAS & CONSUMABLE FUELS (CONT.)
Petrohawk Energy 159,797 216,643 376,440(b) $ 3,569,865 $ 4,839,804 $ 8,409,669
Range Resources 41,283 39,635 80,918 1,945,668 1,867,998 3,813,666
Southwestern Energy 61,250 17,512 78,762(b) 2,692,550 769,828 3,462,378
Tesoro 307,792(d) 148,300(d) 456,092 3,933,582 1,895,274 5,828,856
Western Refining 944,986(d) 405,700(d) 1,350,686(b) 4,394,185 1,886,505 6,280,690
Williams Companies 265,222 131,100 396,322 5,275,266 2,607,578 7,882,844
-----------------------------------------------
Total 47,501,246 24,363,271 71,864,517
-----------------------------------------------
PAPER & FOREST PRODUCTS (0.2%)
MeadWestvaco -- 58,581(d) 58,581 -- 1,603,362 1,603,362
-----------------------------------------------
PHARMACEUTICALS (1.8%)
King
Pharmaceuticals 242,168 116,300 358,468(b) 2,864,847 1,375,829 4,240,676
Mylan 111,101(d) 47,100(d) 158,201(b) 1,985,375 841,677 2,827,052
Perrigo 81,600 -- 81,600 3,275,424 -- 3,275,424
Shire ADR 98,190(d) 43,200(d) 141,390(c) 5,780,446 2,543,184 8,323,630
-----------------------------------------------
Total 13,906,092 4,760,690 18,666,782
-----------------------------------------------
ROAD & RAIL (0.6%)
JB Hunt Transport
Services 56,953(d) -- 56,953 1,814,523 -- 1,814,523
Landstar System 77,004 35,400(d) 112,404 2,873,789 1,321,128 4,194,917
-----------------------------------------------
Total 4,688,312 1,321,128 6,009,440
-----------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (7.7%)
Altera 172,869(d) 62,481(d) 235,350 3,635,435 1,313,975 4,949,410
Atheros
Communications -- 51,835(d) 51,835(b) -- 1,475,742 1,475,742
Broadcom Cl A 91,109 92,070 183,179(b) 2,660,383 2,688,444 5,348,827
FormFactor 567,683(d) 320,300 887,983(b) 9,622,226 5,429,085 15,051,311
Lam Research -- 69,140 69,140(b) -- 2,350,069 2,350,069
Maxim Integrated
Products 161,718(d) 91,500 253,218 2,846,237 1,610,400 4,456,637
Mellanox
Technologies 399,427 132,800 532,227(b,c) 7,249,600 2,410,320 9,659,920
MEMC Electronic
Materials 224,647 102,200 326,847(b) 2,704,750 1,230,488 3,935,238
NetLogic
Microsystems -- 25,810 25,810(b) -- 1,053,048 1,053,048
PMC-Sierra 2,174,756(d) 895,986 3,070,742(b) 17,245,814 7,105,169 24,350,983
Tessera
Technologies 68,380 15,500 83,880(b) 1,618,555 366,885 1,985,440
Xilinx 109,861(d) 57,000 166,861 2,487,253 1,290,480 3,777,733
-----------------------------------------------
Total 50,070,253 28,324,105 78,394,358
-----------------------------------------------
SOFTWARE (10.1%)
Activision Blizzard 303,172 142,100 445,272(b) 3,453,129 1,618,519 5,071,648
Compuware 1,760,788 969,900 2,730,688(b) 12,219,869 6,731,106 18,950,975
Electronic Arts 636,646 285,601 922,247(b) 10,752,951 4,823,801 15,576,752
Intuit 61,327 32,700 94,027(b) 1,791,362 955,167 2,746,529
Novell 678,030 397,000 1,075,030(b) 2,651,097 1,552,270 4,203,367
Symantec 697,546 368,500 1,066,046(b) 12,381,442 6,540,875 18,922,317
TIBCO Software 2,730,984 1,066,300 3,797,284(b) 23,486,461 9,170,179 32,656,640
VMware Cl A 75,752 32,900 108,652(b) 3,180,069 1,381,142 4,561,211
-----------------------------------------------
Total 69,916,380 32,773,059 102,689,439
-----------------------------------------------
SPECIALTY RETAIL (5.1%)
Abercrombie & Fitch
Cl A 158,641(d) 37,700(d) 196,341 6,334,535 1,505,361 7,839,896
American Eagle
Outfitters 198,899 47,900 246,799 3,059,067 736,702 3,795,769
Dick's Sporting
Goods 202,223(d) 96,168 298,391(b) 4,198,149 1,996,448 6,194,597
GameStop Cl A 491,113(d) 237,543(d) 728,656(b) 11,988,069 5,798,424 17,786,493
Limited Brands 168,274 91,700 259,974 2,791,666 1,521,303 4,312,969
PetSmart 128,414 60,565 188,979 3,305,376 1,558,943 4,864,319
</Table>
13
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
RIVERSOURCE MID CAP RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND RIVERSOURCE PARTNERS GROWTH FUND
MID CAP AGGRESSIVE PRO FORMA MID CAP AGGRESSIVE PRO FORMA
GROWTH FUND GROWTH FUND COMBINED GROWTH FUND GROWTH FUND COMBINED
SPECIALTY RETAIL (CONT.)
Tiffany & Co 94,274 7,592 101,866 $ 4,023,614 $ 324,027 $ 4,347,641
Urban Outfitters 46,852(d) 21,651 68,503(b) 1,482,397 685,038 2,167,435
-----------------------------------------------
Total 37,182,873 14,126,246 51,309,119
-----------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (0.1%)
lululemon athletica 35,927(d) 18,200 54,127(b,c) 940,210 476,294 1,416,504
-----------------------------------------------
THRIFTS & MORTGAGE FINANCE (1.0%)
MGIC Investment 840,467(d) 401,377(d) 1,241,844(b) 3,361,868 1,605,508 4,967,376
Radian Group 773,534(d) 369,413(d) 1,142,947 3,457,697 1,651,276 5,108,973
-----------------------------------------------
Total 6,819,565 3,256,784 10,076,349
-----------------------------------------------
TOBACCO (0.6%)
Lorillard 59,870 24,600 84,470 4,664,472 1,916,586 6,581,058
-----------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.5%)
Fastenal 87,811(d) 36,840(d) 124,651 3,256,032 1,366,027 4,622,059
-----------------------------------------------
WATER UTILITIES (0.3%)
American Water
Works 112,980(d) 30,700 143,680 2,512,675 682,768 3,195,443
-----------------------------------------------
WIRELESS TELECOMMUNICATION SERVICES (1.4%)
American Tower Cl A 120,929 42,089 163,018(b) 4,948,415 1,722,283 6,670,698
Millicom Intl
Cellular -- 13,690(d) 13,690(b,c) -- 1,024,012 1,024,012
NII Holdings 141,561 67,600 209,161(b) 4,218,518 2,014,480 6,232,998
-----------------------------------------------
Total 9,166,933 4,760,775 13,927,708
---------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost:
$966,829,797) $672,036,733 $318,945,937 $990,982,670
---------------------------------------------------------------------------------------------------------------
<Caption>
OPTIONS PURCHASED (0.2%)
ISSUER, EXERCISE
PRICE,
EXPIRATION DATE CONTRACTS CONTRACTS CONTRACTS VALUE(a) VALUE(a) VALUE(a)
PUTS
S&P 500 Index,
$1,025, Dec. 2009 3,585 -- 3,585 $ 1,684,950 $ -- $ 1,684,950
---------------------------------------------------------------------------------------------------------------
TOTAL OPTIONS PURCHASED
(Cost: $12,698,429) $ 1,684,950 $ -- $ 1,684,950
---------------------------------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (2.1%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
RiverSource Short-
Term Cash Fund,
0.20% 10,609,785 10,378,667 20,988,452(e) $ 10,609,785 $ 10,378,667 $ 20,988,452
---------------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET
FUND
(Cost: $20,988,452) $ 10,609,785 $ 10,378,667 $ 20,988,452
---------------------------------------------------------------------------------------------------------------
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (27.3%)
ISSUER SHARES SHARES SHARES VALUE(a) VALUE(a) VALUE(a)
CASH COLLATERAL REINVESTMENT FUND (5.8%)
JPMorgan Prime
Money Market Fund 9,577,613 48,937,388 58,515,001 $ 9,577,613 $ 48,937,388 $ 58,515,001
---------------------------------------------------------------------------------------------------------------
</Table>
14
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (CONTINUED)
COUPON PRINCIPAL PRINCIPAL PRINCIPAL
ISSUER RATE AMOUNT AMOUNT AMOUNT VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
RIVERSOURCE MID CAP RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND RIVERSOURCE PARTNERS GROWTH FUND
MID CAP AGGRESSIVE PRO FORMA MID CAP AGGRESSIVE PRO FORMA
GROWTH FUND GROWTH FUND COMBINED GROWTH FUND GROWTH FUND COMBINED
ASSET-BACKED COMMERCIAL PAPER (5.8%)
Antalis US Funding
01/20/10 0.23% $4,997,988 $ -- $4,997,988 $ 4,997,988 $ -- $ 4,997,988
Cancara Asset
Securitisation LLC
02/12/10 0.27 7,994,720 999,340 8,994,060 7,994,720 999,340 8,994,060
Ebbets Funding LLC
12/07/09 0.50 1,999,806 999,903 2,999,709 1,999,806 999,903 2,999,709
Elysian Funding LLC
12/07/09 0.45 1,999,825 999,913 2,999,738 1,999,825 999,913 2,999,738
Grampian Funding LLC
12/14/09 0.28 3,999,004 -- 3,999,004 3,999,004 -- 3,999,004
12/15/09 0.29 4,999,114 -- 4,999,114 4,999,114 -- 4,999,114
Hannover Funding LLC
12/01/09 0.70 4,999,319 -- 4,999,319 4,999,319 -- 4,999,319
Rheingold Securitization
12/10/09 0.40 2,848,117 -- 2,848,117 2,848,117 -- 2,848,117
12/16/09 0.38 3,996,749 1,998,374 5,995,123 3,996,749 1,998,374 5,995,123
Rhein-Main Securitisation
01/21/10 0.41 -- 3,995,809 3,995,809 -- 3,995,809 3,995,809
Scaldis Capital LLC
12/16/09 0.24 1,999,600 -- 1,999,600 1,999,600 -- 1,999,600
12/18/09 0.24 4,999,033 -- 4,999,033 4,999,033 -- 4,999,033
Versailles LLC
12/17/09 0.40 4,998,333 -- 4,998,333 4,998,333 -- 4,998,333
----------------------------------------------
Total 49,831,608 8,993,339 58,824,947
----------------------------------------------
CERTIFICATES OF DEPOSIT (12.3%)
Banco Espirito Santo e
Comm NY
12/07/09 0.29 5,000,000 -- 5,000,000 5,000,000 -- 5,000,000
Banco Santander Madrid
01/13/10 0.32 4,000,000 -- 4,000,000 4,000,000 -- 4,000,000
Banco Santander NY
02/10/10 0.29 2,000,000 -- 2,000,000 2,000,000 -- 2,000,000
Bank of Tokyo UFJ London
12/21/09 0.37 6,000,079 3,000,039 9,000,118 6,000,079 3,000,039 9,000,118
Banque Federative Du
Credit Mutuel
01/19/10 0.35 -- 1,998,213 1,998,213 -- 1,998,213 1,998,213
03/02/10 0.28 2,997,855 -- 2,997,855 2,997,855 -- 2,997,855
Barclays Seoul
02/16/10 0.36 1,000,000 -- 1,000,000 1,000,000 -- 1,000,000
Bayrische Hypo-Und
Vereinsbank NY
02/01/10 0.43 3,000,000 2,000,000 5,000,000 3,000,000 2,000,000 5,000,000
Clydesdale Bank
12/01/09 0.38 4,996,783 1,998,713 6,995,496 4,996,783 1,998,713 6,995,496
Commerzbank Frankfurt
12/01/09 0.20 5,000,000 -- 5,000,000 5,000,000 -- 5,000,000
Credit Industrial ET
Commercial London
01/13/10 0.39 5,000,000 -- 5,000,000 5,000,000 -- 5,000,000
Dexia Bank
12/09/09 0.40 4,998,334 -- 4,998,334 4,998,334 -- 4,998,334
Dexia Credit Local de
France
12/17/09 0.39 3,000,000 -- 3,000,000 3,000,000 -- 3,000,000
Fortis Bank NY
12/31/09 0.24 5,000,000 2,000,000 7,000,000 5,000,000 2,000,000 7,000,000
HSBC France
12/04/09 0.25% 7,000,000 -- 7,000,000 7,000,000 -- 7,000,000
</Table>
15
<Table>
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (CONTINUED)
COUPON PRINCIPAL PRINCIPAL PRINCIPAL
ISSUER RATE AMOUNT AMOUNT AMOUNT VALUE(a) VALUE(a) VALUE(a)
RIVERSOURCE RIVERSOURCE
RIVERSOURCE MID CAP RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS GROWTH FUND RIVERSOURCE PARTNERS GROWTH FUND
MID CAP AGGRESSIVE PRO FORMA MID CAP AGGRESSIVE PRO FORMA
GROWTH FUND GROWTH FUND COMBINED GROWTH FUND GROWTH FUND COMBINED
CERTIFICATES OF DEPOSIT (CONT.)
Jyske
12/10/09 0.44% $4,994,445 $ -- $4,994,445 $ 4,994,445 $ -- $ 4,994,445
KBC Brussels
12/30/09 0.28 6,000,000 -- 6,000,000 6,000,000 -- 6,000,000
Landesbank Hessen London
12/14/09 0.23 5,000,000 -- 5,000,000 5,000,000 -- 5,000,000
Mizuho London
12/15/09 0.33 2,500,000 -- 2,500,000 2,500,000 -- 2,500,000
01/25/10 0.32 5,000,000 -- 5,000,000 5,000,000 -- 5,000,000
Natixis NY
12/21/09 0.30 7,000,000 2,000,000 9,000,000 7,000,000 2,000,000 9,000,000
Norinchukin Bank NY
01/19/10 0.32 2,000,000 -- 2,000,000 2,000,000 -- 2,000,000
NyKredit 12/18/09 0.53 5,000,000 -- 5,000,000 5,000,000 -- 5,000,000
01/05/10 0.45 -- 2,000,000 2,000,000 -- 2,000,000 2,000,000
Sumitomo Mitsui Banking
Corp Brussels
01/22/10 0.32 -- 3,000,000 3,000,000 -- 3,000,000 3,000,000
02/19/10 0.31 4,000,000 -- 4,000,000 4,000,000 -- 4,000,000
Ulster Bank Ireland,
Dublin
12/15/09 0.53 5,000,000 2,000,000 7,000,000 5,000,000 2,000,000 7,000,000
----------------------------------------------
Total 105,487,496 19,996,965 125,484,461
----------------------------------------------
COMMERCIAL PAPER (0.8%)
Citigroup Funding
12/14/09 0.27 4,998,688 -- 4,998,688 4,998,688 -- 4,998,688
KBC Financial Products
12/07/09 0.47 1,999,086 999,543 2,998,629 1,999,085 999,543 2,998,628
----------------------------------------------
Total 6,997,773 999,543 7,997,316
----------------------------------------------
REPURCHASE AGREEMENTS (2.6%)(F)
Barclays Capital
dated 11/30/09
matures 12/01/09
repurchase price
$5,000,040 0.29 5,000,000 -- 5,000,000 5,000,000 -- 5,000,000
Morgan Stanley
dated 11/30/09
matures 12/01/09
repurchase price
$7,000,052 0.27 5,000,000 2,000,000 7,000,000 5,000,000 2,000,000 7,000,000
dated 11/30/09
matures 12/01/09
repurchase price
$6,000,056 0.34 3,000,000 3,000,000 6,000,000 3,000,000 3,000,000 6,000,000
RBS Securities
dated 11/30/09
matures 12/01/09
repurchase price
$8,000,098 0.44 5,000,000 3,000,000 8,000,000 5,000,000 3,000,000 8,000,000
----------------------------------------------
Total 18,000,000 8,000,000 26,000,000
----------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES
ON LOAN
(Cost: $276,821,725) $189,894,490 $ 86,927,235 $ 276,821,725
----------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $1,277,338,403)(g) $874,225,958 $416,251,839 $1,290,477,797
----------------------------------------------------------------------------------------------------------------------------
</Table>
16
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 Nov. 30, 2009, the
value of foreign securities represented 6.9% of net assets.
(d) At Nov. 30, 2009, security was partially or fully on loan. See Note 6 and/or
7 to the financial statements in the annual report.
(e) Affiliated Money Market Fund -- See Note 7 and/or 9 to the financial
statements in the annual report. The rate shown is the seven-day current
annualized yield at Nov. 30, 2009.
(f) These repurchase agreements represent securities received as collateral. The
collateral is deposited with the Fund's custodian and, pursuant to the terms
of the repurchase agreement, must have an aggregate market value greater
than or equal to the repurchase price plus accrued interest at all times. On
a daily basis, the market value of securities held as collateral for
repurchase agreements is monitored to ensure the existence of the proper
level of collateral.
(g) At Nov. 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
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: $865,967,000 $411,371,000 $1,277,338,000
Unrealized appreciation $ 75,682,000 $ 15,861,000 $ 91,543,000
Unrealized depreciation (67,423,000) (10,981,000) (78,404,000)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation $ 8,259,000 $ 4,880,000 $ 13,139,000
---------------------------------------------------------------------------------------------------------
</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.
17
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.
18
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
SEPT. 30, 2009 (UNAUDITED) VALUE FUND VALUE FUND FORMA ADJUSTMENTS FORMA COMBINED
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.
19
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
YEAR ENDED SEPT. 30, 2009 (UNAUDITED) VALUE FUND VALUE FUND FORMA ADJUSTMENTS FORMA COMBINED
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
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.
20
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.
21
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 pro forma
adjustments on the Statement of Assets and Liabilities reflect the net effect of
the issuance of additional RiverSource Mid Cap Value Fund shares. 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>
SHARES OF RIVERSOURCE
MID CAP VALUE FUND
ISSUED TO SHAREHOLDERS OF RIVERSOURCE MID CAP
RIVERSOURCE PARTNERS VALUE FUND TOTAL PRO FORMA
SELECT VALUE FUND 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>
22
COMBINED PORTFOLIO OF INVESTMENTS
RiverSource Mid Cap Value Fund
SEPT. 30, 2009 (UNAUDITED)
(Percentages represent value of investments compared to pro forma combined 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 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
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>
23
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
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
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>
24
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
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
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
--------------------------------------------------------
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
</Table>
25
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
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
HOUSEHOLD DURABLES (CONT.)
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
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
--------------------------------------------------------
</Table>
26
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
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
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
--------------------------------------------------------
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
</Table>
27
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
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
REAL ESTATE INVESTMENT TRUSTS (REITS) (CONT.)
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
--------------------------------------------------------
TOBACCO (2.8%)
Lorillard 860,650 16,500 877,150 63,946,295 1,225,950 65,172,245
--------------------------------------------------------
</Table>
28
<Table>
<Caption>
COMMON STOCKS (CONTINUED)
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
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)
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
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
</Table>
29
<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
ASSET-BACKED COMMERCIAL PAPER (CONT.)
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
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
</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
CERTIFICATES OF DEPOSIT (CONT.)
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%)(H)
Morgan Stanley
dated 09/30/09
matures 10/01/09
repurchase price
$12,000,075 0.23 12,000,000 -- 12,000,000 12,000,000 -- 12,000,000
RBS Securities
dated 09/30/09
matures 10/01/09
repurchase price
$12,000,167 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)(i) $2,585,020,742 $365,075,721 $2,950,096,463
----------------------------------------------------------------------------------------------------------------------------------
</Table>
31
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 7 to
the financial statements in the annual report.
(e) Identifies issues considered to be illiquid as to their marketability (see
Note 2 to the financial statements in the annual report). 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) These repurchase agreements represent securities received as collateral. The
collateral is deposited with the Fund's custodian and, pursuant to the terms
of the repurchase agreement, must have an aggregate market value greater
than or equal to the repurchase price plus accrued interest at all times. On
a daily basis, the market value of securities held as collateral for
repurchase agreements is monitored to ensure the existence of the proper
level of collateral.
(i) 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.
32
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.
33
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
JUNE 30, 2009 (UNAUDITED) CAP VALUE FUND FUND ADJUSTMENTS COMBINED
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.
34
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
YEAR ENDED JUNE 30, 2009 (UNAUDITED) FUND EQUITY FUND ADJUSTMENTS COMBINED
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.
35
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.
36
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 pro forma
adjustments on the Statement of Assets and Liabilities reflect the net effect of
the issuance of additional Seligman Smaller-Cap Value Fund shares. 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>
SHARES OF SELIGMAN
SMALLER-CAP VALUE
FUND ISSUED TO
SHAREHOLDERS OF SELIGMAN SMALLER-CAP
RIVERSOURCE PARTNERS VALUE FUND TOTAL PRO FORMA
SMALL CAP EQUITY FUND 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.
37
COMBINED PORTFOLIO OF INVESTMENTS
Seligman Smaller-Cap Value Fund
JUNE 30, 2009 (UNAUDITED)
(Percentages represent value of investments compared to pro forma combined 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
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
Lennox Intl -- 1,601 1,601 -- 51,408 51,408
</Table>
38
<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
BUILDING PRODUCTS (CONT.)
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>
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
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>
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
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>
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
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
Darling Intl -- 64,268 64,268(b) -- 424,169 424,169
</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
FOOD PRODUCTS (CONT.)
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
LifePoint Hospitals -- 23,200(d) 23,200(b) -- 609,000 609,000
</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
HEALTH CARE PROVIDERS & SERVICES (CONT.)
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
Lincoln Natl 295,000 -- 295,000 5,076,950 -- 5,076,950
Montpelier Re
Holdings -- 15,500 15,500(c) -- 205,995 205,995
</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
INSURANCE (CONT.)
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
------------------------------------------------
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
</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
LIFE SCIENCES TOOLS & SERVICES (CONT.)
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
------------------------------------------------
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
------------------------------------------------
</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
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
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
------------------------------------------------
</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
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
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
</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
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (CONT.)
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
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
</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
TEXTILES, APPAREL & LUXURY GOODS (CONT.)
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:
$256,426,747) $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>
50
<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
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:
$287,236,472)(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 in the annual report.
(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.
51
SELIGMAN FRONTIER FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (SELLING FUND)
INTRODUCTION TO PROPOSED FUND REORGANIZATION
Oct. 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 Oct. 31, 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 Oct. 31, 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 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 Oct. 31, 2009.
52
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
OCT. 31, 2009 (UNAUDITED) FRONTIER FUND GROWTH FUND ADJUSTMENTS COMBINED
ASSETS
Investments in securities, at cost
Unaffiliated issuers $38,202,933 $ 98,219,634 $ -- $136,422,567
Affiliated money market fund 1,176,591 2,284,974 -- 3,461,565
Investments of cash collateral received for
securities on loan 8,954,128 25,511,187 -- 34,465,315
---------------------------------------------------------------
Investments in securities, at value
Unaffiliated issuers* 34,673,569 96,401,569 -- 131,075,138
Affiliated money market fund 1,176,591 2,284,974 -- 3,461,565
Investments of cash collateral received for
securities on loan 8,954,128 25,511,187 -- 34,465,315
Cash -- 1 1
Capital shares receivable 11,099 36,283 -- 47,382
Dividends and accrued interest receivable 5,058 16,654 -- 21,712
Receivable for investment securities sold 356,889 1,022,489 -- 1,379,378
------------------------------------------------------------------------------------------------------------------------
Total assets 45,177,334 125,273,157 -- 170,450,491
------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Capital shares payable 96,901 107,327 -- 204,228
Payable for investment securities purchased 910,105 2,497,862 -- 3,407,967
Payable upon return of securities loaned 8,954,128 25,511,187 -- 34,465,315
Accrued investment management services fees 877 2,524 -- 3,401
Accrued distribution fees 449 682 -- 1,131
Accrued transfer agency fees 28,234 850 -- 29,084
Accrued administrative services fees 79 219 -- 298
Accrued plan administration services fees 1 1 -- 2
Other accrued expenses 67,462 72,585 -- 140,047
------------------------------------------------------------------------------------------------------------------------
Total liabilities 10,058,236 28,193,237 -- 38,251,473
------------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $35,119,098 $ 97,079,920 $ -- $132,199,018
------------------------------------------------------------------------------------------------------------------------
REPRESENTED BY
Capital stock -- $.10 par value for Seligman Frontier
Fund and $.01 par value for RiverSource Partners
Small Cap Growth Fund (Note 3) $ 455,979 $ 337,252 $ 855,652 $ 1,648,883
Additional paid-in capital (Note 3) 47,639,568 139,962,931 (855,652) 186,746,847
Excess of distributions over net investment income (755) (389,502) -- (390,257)
Accumulated net realized gain (loss) (9,446,330) (41,012,696) -- (50,459,026)
Unrealized appreciation (depreciation) on investments
and on translation of assets and liabilities in
foreign currencies (3,529,364) (1,818,065) -- (5,347,429)
------------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding capital stock $35,119,098 $ 97,079,920 $ -- $132,199,018
------------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding
shares: Class A $23,379,805 $ 46,040,056 $ -- $ 69,419,861
Class B $ 1,118,495 $ 10,652,678 $ -- $ 11,771,173
Class C $ 8,899,070 $ 1,950,541 $ -- $ 10,849,611
Class I $ 999,800 $ 38,301,802 $ -- $ 39,301,602
Class R2 $ 81,518 $ 2,746 $ -- $ 84,264
Class R3 $ 5,027 $ 2,767 $ -- $ 7,794
Class R4 $ 9,819 $ 126,536 $ -- $ 136,355
Class R5 $ 625,564 $ 2,794 $ -- $ 628,358
Shares outstanding
(Note 3): Class A shares 2,848,890 16,052,041 (10,444,239) 8,456,692
Class B shares 169,585 4,035,734 (2,421,692) 1,783,627
Class C shares 1,342,806 738,172 (443,973) 1,637,005
Class I shares 114,806 12,852,947 (8,455,496) 4,512,257
Class R2 shares 10,109 951 (610) 10,450
Class R3 shares 623 951 (608) 966
Class R4 shares 1,128 43,404 (28,860) 15,672
Class R5 shares 71,840 951 (630) 72,161
Net asset value per share of outstanding capital
stock: Class A $ 8.21 $ 2.87 $ 8.21
Class B $ 6.60 $ 2.64 $ 6.60
Class C $ 6.63 $ 2.64 $ 6.63
Class I $ 8.71 $ 2.98 $ 8.71
Class R2 $ 8.06 $ 2.89 $ 8.06
Class R3 $ 8.07 $ 2.91 $ 8.07
Class R4 $ 8.70 $ 2.92 $ 8.70
Class R5 $ 8.71 $ 2.94 $ 8.71
------------------------------------------------------------------------------------------------------------------------
* Including securities on loan, at value $ 8,448,078 $ 24,233,214 $ -- $ 32,681,292
------------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
53
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
YEAR ENDED OCT. 31, 2009 (UNAUDITED) FRONTIER FUND GROWTH FUND ADJUSTMENTS COMBINED
INVESTMENT INCOME
Income:
Dividends $ 318,218 $ 414,473 $ -- $ 732,691
Interest 3,477 -- -- 3,477
Income distributions from affiliated money market
fund 934 7,958 -- 8,892
Income from securities lending -- net 10,479 183,650 -- 194,129
Less foreign taxes withheld -- (199) -- (199)
------------------------------------------------------------------------------------------------------------------
Total income 333,108 605,882 -- 938,990
------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees (Note 2) 321,582 769,272 53,186(a) 1,144,040
Distribution fees
Class A 56,264 110,834 -- 167,098
Class B 11,282 125,901 -- 137,183
Class C 86,834 18,691 -- 105,525
Class R2 453 12 -- 465
Class R3 3 6 -- 9
Transfer agency fees (Note 2)
Class A 169,027 250,655 (101,467)(b) 318,215
Class B 8,606 75,688 (16,338)(b) 67,956
Class C 65,625 10,803 (24,597)(b) 51,831
Class R2 506 1 (460)(b) 47
Class R3 1 1 -- 2
Class R4 1 47 -- 48
Class R5 5,283 1 (4,341)(b) 943
Administrative services fees (Note 2) 10,073 75,331 18,012(c) 103,416
Plan administration services fees (Note 2)
Class R2 96 6 131(d) 233
Class R3 3 6 -- 9
Class R4 4 234 -- 238
Compensation of board members 1,038 2,874 -- 3,912
Custodian fees 35,870 105,728 -- 141,598
Printing and postage 87,752 41,040 -- 128,792
Registration fees (Note 2) 66,329 51,290 (25,645)(e) 91,974
Professional fees (Note 2) 30,613 32,969 (31,060)(f) 32,522
Other 8,792 19,637 -- 28,429
------------------------------------------------------------------------------------------------------------------
Total expenses 966,037 1,691,027 (132,579) 2,524,485
Expenses waived/reimbursed by RiverSource
Investments, LLC (Note 2) (251,292) (371,225) 71,540(g) (550,977)
------------------------------------------------------------------------------------------------------------------
Total net expenses 714,745 1,319,802 (61,039) 1,973,508
------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net (381,637) (713,920) 61,039 (1,034,518)
------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on security transactions (7,643,366) (26,952,756) -- (34,596,122)
Net change in unrealized appreciation (depreciation)
on investments and on translation of assets and
liabilities in foreign currencies 11,701,825 29,400,653 -- 41,102,478
Increase from payment from the investment manager 2,908 -- -- 2,908
------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments and foreign
currencies 4,061,367 2,447,897 -- 6,509,264
------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations $ 3,679,730 $ 1,733,977 $ 61,039 $ 5,474,746
------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
54
SELIGMAN FRONTIER FUND (BUYING FUND)
RIVERSOURCE PARTNERS SMALL CAP GROWTH FUND (SELLING FUND)
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited as to Oct. 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 Oct. 31, 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 Oct. 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:
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.
55
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 Oct. 31, 2009, in connection with the
Reorganization. The pro forma adjustments on the Statement of Assets and
Liabilities reflect the net effect of the issuance of additional Seligman
Frontier Fund shares. 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>
SHARES OF SELIGMAN
FRONTIER FUND ISSUED
TO SHAREHOLDERS OF
RIVERSOURCE PARTNERS SELIGMAN FRONTIER FUND TOTAL PRO FORMA
SMALL CAP GROWTH FUND SHARES OUTSTANDING SHARES OUTSTANDING
----------------------------------------------------------------------------------------------------------------------
Class A 5,607,802 2,848,890 8,456,692
----------------------------------------------------------------------------------------------------------------------
Class B 1,614,042 169,585 1,783,627
----------------------------------------------------------------------------------------------------------------------
Class C 294,199 1,342,806 1,637,005
----------------------------------------------------------------------------------------------------------------------
Class I 4,397,451 114,806 4,512,257
----------------------------------------------------------------------------------------------------------------------
Class R2 341 10,109 10,450
----------------------------------------------------------------------------------------------------------------------
Class R3 343 623 966
----------------------------------------------------------------------------------------------------------------------
Class R4 14,544 1,128 15,672
----------------------------------------------------------------------------------------------------------------------
Class R5 321 71,840 72,161
----------------------------------------------------------------------------------------------------------------------
</Table>
56
COMBINED PORTFOLIO OF INVESTMENTS
Seligman Frontier Fund
OCT. 31, 2009 (UNAUDITED)
(Percentages represent value of investments compared to pro forma combined net
assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (99.1%)
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
AEROSPACE & DEFENSE (5.7%)
AeroVironment 15,900 43,630 59,530(b) $ 423,894 $ 1,163,176 $ 1,587,070
American Science &
Engineering 2,300 6,402 8,702 152,076 423,300 575,376
BE Aerospace 26,400(d) 77,296(d) 103,696(b) 468,072 1,370,459 1,838,531
DigitalGlobe 10,647 29,289 39,936(b) 237,748 654,023 891,771
Ducommun 16,500(d) 48,341(d) 64,841 280,830 822,764 1,103,594
Stanley 13,500(d) 39,189(d) 52,689(b) 381,375 1,107,089 1,488,464
---------------------------------------------------
Total 1,943,995 5,540,811 7,484,806
---------------------------------------------------
AUTO COMPONENTS (0.6%)
Amerigon 32,600(d) 91,349(d) 123,949(b) 209,618 587,374 796,992
---------------------------------------------------
BIOTECHNOLOGY (5.6%)
Affymax 9,000(d) 24,315(d) 33,315(b) 181,260 489,704 670,964
Alexion
Pharmaceuticals 3,100 8,490 11,590(b) 137,671 377,041 514,712
Allos Therapeutics 53,300 147,060 200,360(b) 301,145 830,889 1,132,034
AMAG
Pharmaceuticals 8,800(d) 24,088(d) 32,888(b) 332,464 910,045 1,242,509
BioMarin
Pharmaceutical 26,600(d) 77,836(d) 104,436(b) 413,896 1,211,128 1,625,024
Celera 64,400(d) 96,000(d) 160,400(b) 398,636 594,240 992,876
Facet Biotech 9,320(d) 25,617(d) 34,937(b) 159,652 438,819 598,471
OSI Pharmaceuticals 5,800(d) 16,000(d) 21,800(b) 186,876 515,520 702,396
---------------------------------------------------
Total 2,111,600 5,367,386 7,478,986
---------------------------------------------------
CAPITAL MARKETS (3.7%)
Affiliated Managers
Group 6,000(d) 20,392(d) 26,392(b) 380,940 1,294,688 1,675,628
Artio Global
Investors 7,609 20,790 28,399(b) 178,888 488,773 667,661
Duff & Phelps Cl A 8,518(d) 24,958(d) 33,476 146,424 429,028 575,452
Piper Jaffray
Companies 3,700 10,118(d) 13,818(b) 171,643 469,374 641,017
Stifel Financial 4,700(d) 13,212(d) 17,912(b) 244,212 686,496 930,708
Thomas Weisel
Partners Group 26,000(d) 76,100(d) 102,100(b) 117,780 344,733 462,513
---------------------------------------------------
Total 1,239,887 3,713,092 4,952,979
---------------------------------------------------
CHEMICALS (0.4%)
Intrepid Potash -- 19,919(d) 19,919(b) -- 513,113 513,113
---------------------------------------------------
COMMERCIAL BANKS (0.6%)
Signature Bank 6,600 19,318 25,918(b) 208,296 609,676 817,972
---------------------------------------------------
COMMERCIAL SERVICES & SUPPLIES (4.0%)
Clean Harbors 4,800 14,056 18,856(b) 270,960 793,461 1,064,421
Corrections Corp of
America 18,544(d) 51,324(d) 69,868(b) 443,943 1,228,696 1,672,639
GEO Group 21,400(d) 52,537 73,937(b) 452,610 1,111,158 1,563,768
Tetra Tech 9,900 28,978 38,878(b) 254,727 745,604 1,000,331
---------------------------------------------------
Total 1,422,240 3,878,919 5,301,159
---------------------------------------------------
COMMUNICATIONS EQUIPMENT (3.6%)
CommScope 17,563 48,202 65,765(b) 474,552 1,302,419 1,776,971
Emulex 33,800 93,342 127,142(b) 341,380 942,754 1,284,134
F5 Networks 4,400 11,332 15,732(b) 197,516 508,693 706,209
Ixia 38,300(d) 103,777 142,077(b) 254,695 690,117 944,812
---------------------------------------------------
Total 1,268,143 3,443,983 4,712,126
---------------------------------------------------
</Table>
57
<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
COMPUTERS & PERIPHERALS (1.0%)
Netezza 28,300(d) 78,208(d) 106,508(b) $ 261,492 $ 722,642 $ 984,134
Synaptics 3,900(d) 10,728(d) 14,628(b) 87,750 241,380 329,130
---------------------------------------------------
Total 349,242 964,022 1,313,264
---------------------------------------------------
CONSTRUCTION & ENGINEERING (3.4%)
Foster Wheeler -- 17,111 17,111(b) -- 478,937 478,937
MYR Group 14,829 47,815(d) 62,644(b) 254,762 821,462 1,076,224
Orion Marine Group 42,043 115,633 157,676(b) 800,499 2,201,652 3,002,151
---------------------------------------------------
Total 1,055,261 3,502,051 4,557,312
---------------------------------------------------
CONTAINERS & PACKAGING (0.4%)
Rock-Tenn Cl A 3,400 9,442 12,842 148,920 413,560 562,480
---------------------------------------------------
DIVERSIFIED CONSUMER SERVICES (2.8%)
American Public
Education 11,800(d) 32,450(d) 44,250(b) 376,420 1,035,155 1,411,575
Coinstar 21,000(d) 49,946(d) 70,946(b) 666,540 1,585,286 2,251,826
---------------------------------------------------
Total 1,042,960 2,620,441 3,663,401
---------------------------------------------------
DIVERSIFIED TELECOMMUNICATION SERVICES (0.6%)
Neutral Tandem 10,200(d) 28,286(d) 38,486(b) 215,118 596,552 811,670
---------------------------------------------------
ELECTRIC UTILITIES (0.7%)
ITC Holdings 5,600 16,388(d) 21,988 248,752 727,955 976,707
---------------------------------------------------
ELECTRICAL EQUIPMENT (0.9%)
GrafTech Intl 22,400(d) 61,883 84,283(b) 302,400 835,421 1,137,821
---------------------------------------------------
ELECTRONIC EQUIPMENT, INSTRUMENTS & COMPONENTS (0.9%)
Itron 2,611(d) 7,238(d) 9,849(b) 156,764 434,570 591,334
L-1 Identity
Solutions 29,200(d) 79,000(d) 108,200(b) 172,572 466,890 639,462
---------------------------------------------------
Total 329,336 901,460 1,230,796
---------------------------------------------------
ENERGY EQUIPMENT & SERVICES (1.0%)
Dril-Quip 6,900(d) 20,216(d) 27,116(b) 335,271 982,295 1,317,566
---------------------------------------------------
FOOD PRODUCTS (1.7%)
Calavo Growers 6,100(d) 17,000(d) 23,100 108,885 303,450 412,335
Dole Food 40,000(d) 115,900 155,900(b) 469,600 1,360,666 1,830,266
---------------------------------------------------
Total 578,485 1,664,116 2,242,601
---------------------------------------------------
HEALTH CARE EQUIPMENT & SUPPLIES (2.0%)
American Medical
Systems Holdings 16,900 46,554 63,454(b) 260,598 717,863 978,461
Integra
LifeSciences
Holdings 4,467 11,600(d) 16,067(b) 136,422 354,264 490,686
Wright Medical
Group 19,800(d) 54,685(d) 74,485(b) 321,750 888,631 1,210,381
---------------------------------------------------
Total 718,770 1,960,758 2,679,528
---------------------------------------------------
HEALTH CARE PROVIDERS & SERVICES (9.3%)
Alliance HealthCare
Services 44,400 130,047(d) 174,447(b) 241,536 707,456 948,992
Amedisys 10,000(d) 27,505(d) 37,505(b) 397,900 1,094,423 1,492,323
AmSurg 8,600(d) 23,737(d) 32,337(b) 181,202 500,139 681,341
Centene 9,600 26,432 36,032(b) 171,168 471,283 642,451
Chemed 8,800(d) 24,152(d) 32,952 398,815 1,094,568 1,493,383
Five Star Quality
Care 92,000 140,000 232,000(b) 317,400 483,000 800,400
Genoptix 8,400(d) 23,063(d) 31,463(b) 292,236 802,362 1,094,598
Gentiva Health
Services 13,000(d) 35,824(d) 48,824(b) 312,000 859,776 1,171,776
Kindred Healthcare 17,300 47,631 64,931(b) 254,310 700,176 954,486
MEDNAX 7,398(d) 22,474(d) 29,872(b) 384,104 1,166,849 1,550,953
Odyssey HealthCare 5,500 14,957 20,457(b) 76,670 208,501 285,171
Skilled Healthcare
Group Cl A 44,948(d) 97,295(d) 142,243(b) 361,382 782,252 1,143,634
---------------------------------------------------
Total 3,388,723 8,870,785 12,259,508
---------------------------------------------------
</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
HOTELS, RESTAURANTS & LEISURE (3.8%)
Bally Technologies 17,500 51,243 68,743(b) $ 689,325 $ 2,018,461 $ 2,707,786
California Pizza
Kitchen 19,800(d) 58,010(d) 77,810(b) 257,202 753,550 1,010,752
Einstein Noah
Restaurant Group 16,600(d) 46,586(d) 63,186(b) 216,132 606,550 822,682
Morgans Hotel Group 48,967 87,000 135,967(b) 162,570 288,840 451,410
---------------------------------------------------
Total 1,325,229 3,667,401 4,992,630
---------------------------------------------------
INSURANCE (2.0%)
Aspen Insurance
Holdings 17,000 49,912 66,912(c) 438,600 1,287,729 1,726,329
First American 7,900(d) 21,635(d) 29,535 240,081 657,488 897,569
---------------------------------------------------
Total 678,681 1,945,217 2,623,898
---------------------------------------------------
INTERNET & CATALOG RETAIL (1.2%)
Shutterfly 17,500(d) 51,247 68,747(b) 246,750 722,583 969,333
Vitacost.com 16,228 44,510 60,738(b) 160,982 441,539 602,521
---------------------------------------------------
Total 407,732 1,164,122 1,571,854
---------------------------------------------------
INTERNET SOFTWARE & SERVICES (2.8%)
Art Technology
Group 91,200 232,988 324,188(b) 375,744 959,911 1,335,655
Equinix 2,700(d) 7,466 10,166(b) 230,364 636,999 867,363
Infospace 6,100 16,100 22,200(b) 52,277 137,977 190,254
Vistaprint 6,851(d) 18,956(d) 25,807(b,c) 349,744 967,703 1,317,447
---------------------------------------------------
Total 1,008,129 2,702,590 3,710,719
---------------------------------------------------
IT SERVICES (2.8%)
Information
Services Group 53,200 58,000 111,200(b) 191,520 208,800 400,320
Lender Processing
Services 9,900 27,380 37,280 394,020 1,089,724 1,483,744
TeleTech Holdings 28,800 72,000 100,800(b) 515,232 1,288,080 1,803,312
---------------------------------------------------
Total 1,100,772 2,586,604 3,687,376
---------------------------------------------------
MACHINERY (0.5%)
Kaydon 5,000(d) 13,855(d) 18,855 174,950 484,786 659,736
---------------------------------------------------
MEDIA (0.5%)
Dolan Media 15,000 41,371(d) 56,371(b) 179,100 493,970 673,070
---------------------------------------------------
METALS & MINING (1.8%)
Horesehead Holding 24,164(d) 66,563(d) 90,727(b) 230,283 634,345 864,628
Walter Energy 6,200 18,689 24,889 362,700 1,093,307 1,456,007
---------------------------------------------------
Total 592,983 1,727,652 2,320,635
---------------------------------------------------
MULTILINE RETAIL (0.9%)
Big Lots 12,300 35,977 48,277(b) 308,115 901,224 1,209,339
---------------------------------------------------
OIL, GAS & CONSUMABLE FUELS (4.3%)
Alpha Natural
Resources -- 17,405 17,405(b) -- 591,248 591,248
Approach Resources 23,300 68,278(d) 91,578(b) 180,808 529,837 710,645
Arena Resources 8,800 24,783 33,583(b) 327,888 923,415 1,251,303
Brigham Exploration 22,621 62,422(d) 85,043(b) 214,900 593,009 807,909
Goodrich Petroleum 9,900(d) 28,962(d) 38,862(b) 254,133 743,455 997,588
Whiting Petroleum 6,600 18,132(d) 24,732(b) 372,240 1,022,644 1,394,884
---------------------------------------------------
Total 1,349,969 4,403,608 5,753,577
---------------------------------------------------
PERSONAL PRODUCTS (1.7%)
Alberto-Culver 11,200 32,815 44,015 300,384 880,098 1,180,482
Chattem 4,600(d) 12,570(d) 17,170(b) 291,502 796,561 1,088,063
---------------------------------------------------
Total 591,886 1,676,659 2,268,545
---------------------------------------------------
</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
PHARMACEUTICALS (2.1%)
Auxilium
Pharmaceuticals 5,400(d) 14,931(d) 20,331(b) $ 169,884 $ 469,729 $ 639,613
Cypress Bioscience 38,200(d) 105,496(d) 143,696(b) 234,548 647,745 882,293
Endo
Pharmaceuticals
Holdings 13,200 40,400 53,600(b) 295,680 904,961 1,200,641
---------------------------------------------------
Total 700,112 2,022,435 2,722,547
---------------------------------------------------
PROFESSIONAL SERVICES (2.9%)
FTI Consulting 21,600 63,079 84,679(b) 881,496 2,574,254 3,455,750
Huron Consulting
Group 16,450 -- 16,450(b) 381,640 -- 381,640
---------------------------------------------------
Total 1,263,136 2,574,254 3,837,390
---------------------------------------------------
REAL ESTATE INVESTMENT TRUSTS (REITS) (1.5%)
MFA Financial 48,300(d) 141,493(d) 189,793 358,386 1,049,878 1,408,264
Redwood Trust 10,197(d) 29,887(d) 40,084 142,146 416,625 558,771
---------------------------------------------------
Total 500,532 1,466,503 1,967,035
---------------------------------------------------
ROAD & RAIL (0.4%)
Con-way 4,500 13,007 17,507 148,455 429,101 577,556
---------------------------------------------------
SEMICONDUCTORS & SEMICONDUCTOR EQUIPMENT (7.5%)
ANADIGICS 60,200 166,282 226,482(b) 193,242 533,765 727,007
Atheros
Communications 10,200 28,290 38,490(b) 251,124 696,500 947,624
Entegris 70,342 193,109 263,451(b) 264,486 726,090 990,576
Intersil Cl A 13,400 37,036 50,436 168,170 464,802 632,972
Microsemi 32,922(d) 90,942 123,864(b) 438,192 1,210,437 1,648,629
ON Semiconductor 65,991(d) 163,134 229,125(b) 441,480 1,091,366 1,532,846
Silicon
Laboratories 6,600(d) 19,332(d) 25,932(b) 276,540 810,011 1,086,551
Tessera
Technologies 16,000 44,215 60,215(b) 353,760 977,594 1,331,354
Varian
Semiconductor
Equipment
Associates 9,000 27,386 36,386(b) 255,510 777,489 1,032,999
---------------------------------------------------
Total 2,642,504 7,288,054 9,930,558
---------------------------------------------------
SOFTWARE (7.6%)
Ariba 19,100(d) 55,934(d) 75,034(b) 225,762 661,140 886,902
Informatica 12,378(d) 34,135(d) 46,513(b) 262,785 724,686 987,471
Lawson Software 45,300 124,250 169,550(b) 285,843 784,018 1,069,861
NICE Systems ADR 5,981(d) 17,091(d) 23,072(b,c) 185,232 529,308 714,540
Nuance
Communications 70,275(d) 224,185(d) 294,460(b) 921,305 2,939,065 3,860,370
Rovi 12,062 33,153 45,215(b) 332,308 913,365 1,245,673
SuccessFactors 22,337 61,994 84,331(b) 341,533 947,888 1,289,421
---------------------------------------------------
Total 2,554,768 7,499,470 10,054,238
---------------------------------------------------
SPECIALTY RETAIL (2.9%)
Abercrombie & Fitch
Cl A 5,800(d) 16,121(d) 21,921 190,356 529,091 719,447
Aeropostale 3,600(d) 9,958 13,558(b) 135,108 373,724 508,832
Ulta Salon
Cosmetics &
Fragrance 18,500 50,887 69,387(b) 280,090 770,429 1,050,519
Vitamin Shoppe 9,890 27,064 36,954(b) 173,767 475,514 649,281
Zumiez 16,500(d) 48,291(d) 64,791(b) 222,255 650,480 872,735
---------------------------------------------------
Total 1,001,576 2,799,238 3,800,814
---------------------------------------------------
TEXTILES, APPAREL & LUXURY GOODS (1.3%)
Deckers Outdoor 1,800 4,886 6,686(b) 161,406 438,128 599,534
Fuqui Intl 13,920(d) 38,444(d) 52,364(b,c) 285,221 787,717 1,072,938
---------------------------------------------------
Total 446,627 1,225,845 1,672,472
---------------------------------------------------
THRIFTS & MORTGAGE FINANCE (0.8%)
First Niagara
Financial Group 20,300 59,437 79,737 260,652 763,171 1,023,823
---------------------------------------------------
TRADING COMPANIES & DISTRIBUTORS (0.4%)
Titan Machinery 12,800(d) 35,104(d) 47,904(b) 137,344 376,666 514,010
---------------------------------------------------
</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
TRANSPORTATION INFRASTRUCTURE (0.5%)
Aegean Marine
Petroleum Network 7,800 21,667 29,467(c) $ 183,300 $ 509,175 $ 692,475
--------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost:
$136,422,567) $34,673,569 $ 96,401,515 $131,075,084
--------------------------------------------------------------------------------------------------------------------
<Caption>
OTHER ( -- %)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
COMMUNICATIONS EQUIPMENT
Lantronix
Warrants -- 2,188 2,188(b,f)$ -- $ 54 $ 54
--------------------------------------------------------------------------------------------------------------------
TOTAL OTHER
(Cost: $ -- ) $ -- $ 54 $ 54
--------------------------------------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (2.6%)
SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RiverSource Short-
Term Cash Fund,
0.25% 1,176,591 2,284,974 3,461,565(e) $ 1,176,591 $ 2,284,974 $ 3,461,565
--------------------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET
FUND
(Cost: $3,461,565) $ 1,176,591 $ 2,284,974 $ 3,461,565
--------------------------------------------------------------------------------------------------------------------
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (26.1%)
SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
CASH COLLATERAL
REINVESTMENT FUND
JPMorgan Prime
Money Market Fund 8,954,128 25,511,187 34,465,315 $ 8,954,128 $ 25,511,187 $ 34,465,315
--------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH
COLLATERAL RECEIVED FOR SECURITIES
ON LOAN
(Cost: $34,465,315) $ 8,954,128 $ 25,511,187 $ 34,465,315
--------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS
IN SECURITIES
(Cost:
$174,349,447)(g) $44,804,288 $124,197,730 $169,002,018
--------------------------------------------------------------------------------------------------------------------
</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 Oct. 31, 2009, the
value of foreign securities represented 4.2% of net assets.
(d) At Oct. 31, 2009, security was partially or fully on loan. See Note 5 and/or
6 to the financial statements in the annual report.
(e) 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 Oct. 31, 2009.
(f) Identifies issues considered to be illiquid as to their marketability (see
Note 2 to the financial statements). The aggregate value of such securities
at Oct. 31, 2009 was $54, representing less than 0% of net assets.
Information concerning such security holdings at Oct. 31, 2009 is as
follows:
<Table>
<Caption>
ACQUISITION
SECURITY DATES COST
--------------------------------------------------------------------------------------------
Lantronix
Warrants 04/18/08 $--
</Table>
(g) At Oct. 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 SELIGMAN
PARTNERS FRONTIER FUND
SELIGMAN SMALL CAP PRO FORMA
FRONTIER FUND GROWTH FUND COMBINED
Cost of securities for federal income tax purposes: $48,333,000 $126,016,000 $174,349,000
Unrealized appreciation $ 2,577,000 $ 3,549,000 $ 6,126,000
Unrealized depreciation (6,106,000) (5,367,000) (11,473,000)
---------------------------------------------------------------------------------------------------------
Net unrealized depreciation $(3,529,000) $ (1,818,000) $ (5,347,000)
---------------------------------------------------------------------------------------------------------
</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.
61
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (BUYING FUND)
SELIGMAN GLOBAL SMALLER COMPANIES FUND (SELLING FUND)
INTRODUCTION TO PROPOSED FUND REORGANIZATION
Oct. 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 Oct. 31, 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 Oct. 31, 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 on or about March 15,
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 Oct. 31, 2009.
62
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
OCT. 31, 2009 (UNAUDITED) SMALL CAP FUND FUND ADJUSTMENTS COMBINED
ASSETS
Investments in securities, at cost
Unaffiliated issuers $ 55,043,603 $ 70,516,691 $ -- $ 125,560,294
Affiliated money market fund 1,807,509 1,020,118 -- 2,827,627
Investments of cash collateral received for
securities on loan 5,839,354 18,241,907 -- 24,081,261
------------------------------------------------------------
Investments in securities, at value
Unaffiliated issuers* 60,234,830 75,094,144 -- 135,328,974
Affiliated money market fund 1,807,509 1,020,118 -- 2,827,627
Investments of cash collateral received for
securities on loan 5,839,354 18,241,907 -- 24,081,261
Cash 69,197 -- -- 69,197
Foreign currency holdings (identified cost $26,884
for RiverSource Partners International Small Cap
Fund and $417 for Seligman Global Smaller
Companies Fund) 26,806 408 -- 27,214
Capital shares receivable 23,722 296,420 -- 320,142
Dividends and accrued interest receivable 96,519 186,689 -- 283,208
Receivable for investment securities sold 480,146 1,328,149 -- 1,808,295
Reclaims receivable 57,963 -- -- 57,963
Unrealized appreciation on forward foreign currency
contracts 5,695 3,001 -- 8,696
------------------------------------------------------------------------------------------------------------------
Total assets 68,641,741 96,170,836 -- 164,812,577
------------------------------------------------------------------------------------------------------------------
LIABILITIES
Disbursements in excess of cash -- 220,000 -- 220,000
Capital shares payable 69,763 119,956 -- 189,719
Payable for investment securities purchased 980,000 1,119,940 -- 2,099,940
Payable upon return of securities loaned 5,839,354 18,241,907 -- 24,081,261
Unrealized depreciation on forward foreign currency
contracts 1,489 801 -- 2,290
Accrued investment management services fees 1,929 2,033 -- 3,962
Accrued distribution fees 305 1,068 -- 1,373
Accrued transfer agency fees 361 64,400 -- 64,761
Accrued administrative services fees 138 171 -- 309
Accrued plan administration services fees 3 9 -- 12
Other accrued expenses 107,849 94,533 -- 202,382
Other payables -- 17 -- 17
------------------------------------------------------------------------------------------------------------------
Total liabilities 7,001,191 19,864,835 -- 26,866,026
------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding capital stock $ 61,640,550 $ 76,306,001 $ -- $ 137,946,551
------------------------------------------------------------------------------------------------------------------
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) $ 120,551 $ 7,340 $ 144,973 $ 272,864
Additional paid-in capital (Note 3) 92,801,273 149,944,250 (144,973) 242,600,550
Undistributed (excess of distributions over) net
investment income (211,858) 168,370 -- (43,488)
Accumulated net realized gain (loss) (36,264,949) (78,393,368) -- (114,658,317)
Unrealized appreciation (depreciation) on
investments
and on translation of assets and liabilities in
foreign currencies 5,195,533 4,579,409 -- 9,774,942
------------------------------------------------------------------------------------------------------------------
Total -- representing net assets applicable to
outstanding capital stock $ 61,640,550 $ 76,306,001 $ -- $ 137,946,551
------------------------------------------------------------------------------------------------------------------
Net assets applicable to outstanding
shares: Class A $ 25,159,619 $ 49,066,364 $ -- $ 74,225,983
Class B $ 4,125,636 $ 1,814,775 $ -- $ 5,940,411
Class C $ 486,947 $ 23,310,950 $ -- $ 23,797,897
Class I $ 31,466,684 $ -- $ -- $ 31,466,684
Class R2 $ -- $ 1,350,351 $ -- $ 1,350,351
Class R4 $ 401,664 $ -- $ -- $ 401,664
Class R5 $ -- $ 763,561 $ -- $ 763,561
Shares outstanding
(Note 3): Class A shares 4,951,093 4,434,007 5,224,726 14,609,826
Class B shares 846,784 197,153 175,491 1,219,428
Class C shares 100,059 2,519,828 2,266,815 4,886,702
Class I shares 6,079,010 -- -- 6,079,010
Class R2 shares -- 124,044 141,773 265,817
Class R4 shares 78,176 -- -- 78,176
Class R5 shares -- 65,022 82,384 147,406
Net asset value per share of outstanding capital
stock: Class A $ 5.08 $ 11.07 $ 5.08
Class B $ 4.87 $ 9.20 $ 4.87
Class C $ 4.87 $ 9.25 $ 4.87
Class I $ 5.18 $ -- $ 5.18
Class R2 $ -- $ 10.89 $ 5.08
Class R4 $ 5.14 $ -- $ 5.14
Class R5 $ -- $ 11.74 $ 5.18
------------------------------------------------------------------------------------------------------------------
* Including securities on loan, at value $ 5,502,412 $ 16,948,182 $ -- $ 22,450,594
------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
63
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
SELIGMAN PARTNERS PARTNERS
RIVERSOURCE GLOBAL INTERNATIONAL INTERNATIONAL
PARTNERS SMALLER SMALL CAP FUND SMALL CAP FUND
INTERNATIONAL COMPANIES PRO FORMA PRO FORMA
YEAR ENDED OCT. 31, 2009 (UNAUDITED) SMALL CAP FUND FUND ADJUSTMENTS COMBINED
INVESTMENT INCOME
Income:
Dividends $ 1,231,492 $ 1,376,830 $ -- $ 2,608,322
Interest 304 63,639 -- 63,943
Income distributions from affiliated money market
fund 5,574 1,836 -- 7,410
Income from securities lending -- net 32,395 17,642 -- 50,037
Less foreign taxes withheld (136,082) (31,730) -- (167,812)
------------------------------------------------------------------------------------------------------------------
Total income 1,133,683 1,428,217 -- 2,561,900
------------------------------------------------------------------------------------------------------------------
Expenses:
Investment management services fees (Note 2) 496,177 800,616 33,045(a) 1,329,838
Distribution fees
Class A 57,422 116,307 -- 173,729
Class B 42,653 16,981 -- 59,634
Class C 4,096 203,513 -- 207,609
Class R2 -- 3,872 -- 3,872
Transfer agency fees (Note 2)
Class A 127,765 317,271 (112,908)(b) 332,128
Class B 25,296 11,816 (6,592)(b) 30,520
Class C 2,343 137,350 (37,642)(b) 102,051
Class R2 -- 3,259 (2,870)(b) 389
Class R4 485 -- -- 485
Class R5 -- 27,826 (22,048)(b) 5,778
Administrative services fees (Note 2) 38,884 21,642 43,775(c) 104,301
Plan administration services fees (Note 2)
Class R2 -- 1,175 771(d) 1,946
Class R4 2,426 -- -- 2,426
Compensation of board members 1,491 2,437 -- 3,928
Custodian fees 144,675 131,891 -- 276,566
Printing and postage 39,680 56,431 -- 96,111
Registration fees (Note 2) 43,830 88,535 (44,268)(e) 88,097
Professional fees (Note 2) 38,052 47,159 (45,430)(f) 39,781
Other 6,460 12,300 -- 18,760
------------------------------------------------------------------------------------------------------------------
Total expenses 1,071,735 2,000,381 (194,167) 2,877,949
Expenses waived/reimbursed by RiverSource
Investments, LLC (Note 2) (319,381) -- (337,096)(g) (656,477)
------------------------------------------------------------------------------------------------------------------
Total net expenses 752,354 2,000,381 (531,263) 2,221,472
------------------------------------------------------------------------------------------------------------------
Investment income (loss) -- net 381,329 (572,164) 531,263 340,428
------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) -- NET
Net realized gain (loss) on:
Security transactions (18,799,287) (63,751,579) -- (82,550,866)
Foreign currency transactions (654,698) (85,110) -- (739,808)
------------------------------------------------------------------------------------------------------------------
Net realized gain (loss) on investments (19,453,985) (63,836,689) -- (83,290,674)
Net change in unrealized appreciation
(depreciation) on investments and on
translation of assets and liabilities in
foreign currencies 33,408,563 80,115,144 -- 113,523,707
------------------------------------------------------------------------------------------------------------------
Net gain (loss) on investments and foreign
currencies 13,954,578 16,278,455 -- 30,233,033
------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting
from operations $ 14,335,907 $ 15,706,291 $ 531,263 $ 30,573,461
------------------------------------------------------------------------------------------------------------------
</Table>
See accompanying notes to pro forma financial statements.
64
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND (BUYING FUND)
SELIGMAN GLOBAL SMALLER COMPANIES FUND (SELLING FUND)
NOTES TO PRO FORMA FINANCIAL STATEMENTS
(Unaudited as to Oct. 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 Oct. 31, 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 Oct. 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 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 Dec. 31, 2010)
by RiverSource Investments, LLC and its affiliates to waive certain fees and
absorb certain expenses of the combined fund.
65
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 Oct. 31, 2009, in connection with the
Reorganization. The pro forma adjustments on the Statement of Assets and
Liabilities reflect the net effect of the issuance of additional RiverSource
Partners International Small Cap Fund shares. 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>
SHARES OF RIVERSOURCE
PARTNERS INTERNATIONAL
SMALL CAP FUND
ISSUED TO SHAREHOLDERS OF RIVERSOURCE PARTNERS
SELIGMAN GLOBAL INTERNATIONAL SMALL CAP FUND TOTAL PRO FORMA
SMALLER COMPANIES FUND SHARES OUTSTANDING SHARES OUTSTANDING
----------------------------------------------------------------------------------------------------------------------------
Class A 9,658,733 4,951,093 14,609,826
----------------------------------------------------------------------------------------------------------------------------
Class B 372,644 846,784 1,219,428
----------------------------------------------------------------------------------------------------------------------------
Class C 4,786,643 100,059 4,886,702
----------------------------------------------------------------------------------------------------------------------------
Class I N/A 6,079,010 6,079,010
----------------------------------------------------------------------------------------------------------------------------
Class R2* 265,817 N/A 265,817
----------------------------------------------------------------------------------------------------------------------------
Class R4 N/A 78,176 78,176
----------------------------------------------------------------------------------------------------------------------------
Class R5* 147,406 N/A 147,406
----------------------------------------------------------------------------------------------------------------------------
</Table>
* The inception date for the RiverSource Partners International Small Cap
Fund Class R2 and Class R5 shares is expected to be on or about March 15,
2010.
66
COMBINED PORTFOLIO OF INVESTMENTS
RiverSource Partners International Small Cap Fund
OCT. 31, 2009 (UNAUDITED)
(Percentages represent value of investments compared to pro forma combined net
assets)
INVESTMENTS IN SECURITIES
<Table>
<Caption>
COMMON STOCKS (97.7%)(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
AUSTRALIA (3.9%)
Ardent Leisure
Group 77,503 -- 77,503 $ 93,324 $ -- $ 93,324
AJ Lucas Group -- 98,820 98,820 -- 380,843 380,843
Ausenco -- 95,677 95,677 -- 412,316 412,316
Australian Stock
Exchange 5,200(f) -- 5,200 156,685 -- 156,685
AWB 85,400 -- 85,400 93,204 -- 93,204
Bendigo Bank -- 55,450 55,450 -- 449,155 449,155
Billabong Intl 15,400(f) -- 15,400 142,420 -- 142,420
Bradken 18,256 -- 18,256 100,353 -- 100,353
Challenger
Financial Services
Group 48,492 -- 48,492 159,383 -- 159,383
Cochlear 2,000(f) -- 2,000 114,550 -- 114,550
CSR -- 281,421 281,421 -- 415,809 415,809
Emeco Holdings 272,274 -- 272,274 210,434 -- 210,434
Energy Resources of
Australia 5,850 -- 5,850 120,756 -- 120,756
Goodman Fielder 700 -- 700 1,004 -- 1,004
ING Industrial Fund
Unit 261,189(f) -- 261,189 117,937 -- 117,937
Kagara 90,000 -- 90,000(b) 79,283 -- 79,283
Karoon Gas
Australia -- 69,060 69,060(b) -- 467,477 467,477
Kingsgate
Consolidated 19,900 -- 19,900 134,165 -- 134,165
MacArthur Coal 13,809 -- 13,809 103,386 -- 103,386
Macmahon Holdings 125,900 -- 125,900 62,809 -- 62,809
Neptune Marine
Services 160,974 -- 160,974(b) 105,215 -- 105,215
NRW Holdings 132,860 -- 132,860 190,790 -- 190,790
Perpetual 5,100 -- 5,100 169,865 -- 169,865
Seek 5,000 -- 5,000 26,863 -- 26,863
Sigma
Pharmaceuticals 173,334 -- 173,334 145,022 -- 145,022
Sino Gold Mining 53,374 -- 53,374(b) 313,171 -- 313,171
South Australian
Coal 8,129 -- 8,129(b) 709 -- 709
Straits Resources 48,008 -- 48,008 67,740 -- 67,740
United Group 8,500 -- 8,500 102,180 -- 102,180
Whitehaven Coal -- 113,415 113,415 -- 393,002 393,002
-------------------------------------------------------
Total 2,811,248 2,518,602 5,329,850
-------------------------------------------------------
AUSTRIA (0.2%)
Andritz 3,357 -- 3,357 184,850 -- 184,850
EVN 2,600 -- 2,600 49,139 -- 49,139
-------------------------------------------------------
Total 233,989 -- 233,989
-------------------------------------------------------
BELGIUM (1.3%)
Barco -- 5,413 5,413(b) -- 217,754 217,754
Compagnie
de'Entreprises 2,341 -- 2,341 133,252 -- 133,252
Deceuninck 8,300 -- 8,300(b) 16,977 -- 16,977
Eurofins Scientific 1,500 6,160(f) 7,660 68,192 280,043 348,235
EVS Broadcast
Equipment -- 4,017 4,017 -- 295,356 295,356
D'leteren -- 770 770 -- 279,104 279,104
Mobistar 1,700 -- 1,700 116,774 -- 116,774
Nyrstar 6,507 -- 6,507(b) 75,841 -- 75,841
Omega Pharma 4,910 -- 4,910 241,470 -- 241,470
Telenet Group
Holding 5,600 -- 5,600(b) 149,243 -- 149,243
-------------------------------------------------------
Total 801,749 1,072,257 1,874,006
-------------------------------------------------------
BERMUDA (0.8%)
Dufry South America -- 15,300 15,300 -- 265,936 265,936
Platinum
Underwriters
Holdings -- 10,280 10,280 -- 367,716 367,716
</Table>
67
<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
BERMUDA (CONT.)
Signet Jewelers 6,046 -- 6,046 $ 152,644 $ -- $ 152,644
Textainer Group
Holdings -- 20,700(f) 20,700 -- 311,742 311,742
-------------------------------------------------------
Total 152,644 945,394 1,098,038
-------------------------------------------------------
BRAZIL (2.8%)
Brasil Brokers
Participacoes -- 102,300 102,300 -- 354,462 354,462
Confab Industrial 58,400 -- 58,400 171,833 -- 171,833
COPASA -- 20,800 20,800 -- 366,260 366,260
Cosan Industria
Comerico -- 34,500 34,500(b) -- 365,479 365,479
Equatorial Energia 9,600 -- 9,600 91,120 -- 91,120
General Shopping
Brasil -- 98,800 98,800(b) -- 399,577 399,577
Hypermarcas -- 17,000 17,000(b) -- 341,062 341,062
Localiza Rent A Car 40,000 38,700 78,700 419,199 405,575 824,774
Minerva 26,300 -- 26,300(b) 92,323 -- 92,323
Natura Cosmeticos 15,000 -- 15,000 269,753 -- 269,753
Suzano Papel e
Celulose 45,029 -- 45,029 391,590 -- 391,590
Vivo Participacoes 6,300 -- 6,300 153,448 -- 153,448
-------------------------------------------------------
Total 1,589,266 2,232,415 3,821,681
-------------------------------------------------------
CAMBODIA (-- %)
NagaCorp 544,000 -- 544,000 67,988 -- 67,988
-------------------------------------------------------
CANADA (3.5%)
Alimentation
Couche-Tard 7,800 -- 7,800 136,783 -- 136,783
Allen-Vanguard -- 274,000(d,e) 274,000(b) -- -- --
Baytex Energy Trust
Unit 2,500 -- 2,500 61,178 -- 61,178
Capstone Mining 48,300 -- 48,300(b) 130,239 -- 130,239
CCL Inds Cl B 8,600 -- 8,600 178,369 -- 178,369
Corus Entertainment
Series B 8,600 -- 8,600 141,282 -- 141,282
Cott 15,600 -- 15,600(b) 123,313 -- 123,313
Enerflex Systems
Income Fund Unit 12,800 -- 12,800 168,437 -- 168,437
First Quantum
Minerals 2,200 -- 2,200 150,379 -- 150,379
Gammon Gold 17,600 -- 17,600(b) 142,861 -- 142,861
Gildan Activewear -- 12,700 12,700(b) -- 225,171 225,171
Gluskin Sheff +
Associates -- 13,500 13,500 -- 236,241 236,241
Home Capital Group 5,600 -- 5,600 188,753 -- 188,753
Horizon North
Logistics 15,200 -- 15,200(b) 20,353 -- 20,353
IAMGOLD 7,400 -- 7,400 98,061 -- 98,061
Ivanhoe Mines 5,000(f) -- 5,000(b) 53,850 -- 53,850
Ivanhoe Mines 5,700 -- 5,700(b) 61,374 -- 61,374
Linamar 6,300 -- 6,300 87,847 -- 87,847
Mercator Minerals 28,800 -- 28,800(b) 64,892 -- 64,892
Methanex 4,700 -- 4,700 80,988 -- 80,988
New Gold -- 92,800(f) 92,800(b) -- 338,720 338,720
Northgate Minerals 35,100 -- 35,100(b) 89,784 -- 89,784
Oilsands Quest -- 275,700(f) 275,700(b) -- 330,840 330,840
Pan Orient Energy 7,000 -- 7,000(b) 32,127 -- 32,127
Quebecor Cl B 3,100 -- 3,100 63,294 -- 63,294
Ritchie Bros
Auctioneers 3,000(f) -- 3,000 65,760 -- 65,760
ShawCor Cl A 12,734 -- 12,734 331,138 -- 331,138
Silvercorp Metals -- 78,900 78,900 -- 407,287 407,287
Tesco 2,200 -- 2,200(b) 19,096 -- 19,096
Uranium One 20,500 -- 20,500(b) 58,117 -- 58,117
Uranium
Participation -- 46,900 46,900(b) -- 292,340 292,340
Value Creation -- 58,000(g) 58,000(b) -- 4,820 4,820
Viterra -- 31,700 31,700(b) -- 301,514 301,514
Western Coal 28,300 -- 28,300(b) 73,174 -- 73,174
WestJet Airlines 10,200 -- 10,200(b) 103,046 -- 103,046
-------------------------------------------------------
Total 2,724,495 2,136,933 4,861,428
-------------------------------------------------------
</Table>
68
<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
CHILE (0.2%)
SQM ADR 6,441 -- 6,441 $ 236,707 $ -- $ 236,707
-------------------------------------------------------
CHINA (2.0%)
AsiaInfo Holdings -- 15,700(f) 15,700(b) -- 346,342 346,342
Beijing Capital
Land Series H 188,000 -- 188,000 78,835 -- 78,835
China Citic Bank
Series H 212,000(f) -- 212,000 158,694 -- 158,694
China Natl Building
Material Series H 66,000(f) -- 66,000 141,707 -- 141,707
China Shanshui
Cement Group 185,000 -- 185,000 132,104 -- 132,104
China Shipping
Container Lines
Series H 352,000 -- 352,000(b) 125,974 -- 125,974
China Shipping
Development Series
H 60,000 -- 60,000 84,219 -- 84,219
China Vanke Series
B 105,200 -- 105,200 130,124 -- 130,124
China Yurun Food
Group 90,000 -- 90,000 184,979 -- 184,979
Dongfeng Motor
Group 166,000 -- 166,000 197,366 -- 197,366
Intime Department
Store Group 225,000 -- 225,000 157,810 -- 157,810
Jiangsu Expressway
Series H 246,000 -- 246,000 218,766 -- 218,766
Mindray Medical
Intl ADR 5,400(f) -- 5,400 165,942 -- 165,942
New Oriental
Education &
Technology Group
ADR 2,900(f) -- 2,900(b) 202,536 -- 202,536
Shanda Games ADR -- 22,100(f) 22,100(b) -- 220,116 220,116
Shandong Weigao
Group Medical
Polymer 36,800 -- 36,800 130,071 -- 130,071
Sichuan Expressway
Series H 222,000 -- 222,000 95,658 -- 95,658
VisionChina Media
ADR 6,700 -- 6,700(b) 56,012 -- 56,012
-------------------------------------------------------
Total 2,260,797 566,458 2,827,255
-------------------------------------------------------
CZECH REPUBLIC (0.1%)
Komercni Banka 870 -- 870 170,855 -- 170,855
-------------------------------------------------------
DENMARK (0.8%)
DSV -- 17,923(f) 17,923(b) -- 278,620 278,620
GN Store Nord 14,479 -- 14,479(b) 81,305 -- 81,305
H Lundbeck 9,400 -- 9,400 182,085 -- 182,085
Novozymes Series B 2,284 -- 2,284 208,954 -- 208,954
Royal Unibrew 2,878 -- 2,878(b) 83,738 -- 83,738
Sydbank 5,400 -- 5,400(b) 132,091 -- 132,091
TrygVesta 2,200 -- 2,200 158,545 -- 158,545
-------------------------------------------------------
Total 846,718 278,620 1,125,338
-------------------------------------------------------
EGYPT (0.1%)
Al EZZ Steel Rebars 27,714 -- 27,714 81,216 -- 81,216
Telecom Egypt 28,386 -- 28,386 92,086 -- 92,086
-------------------------------------------------------
Total 173,302 -- 173,302
-------------------------------------------------------
FINLAND (1.1%)
Huhtamaki 12,270 -- 12,270 165,833 -- 165,833
Nokian Renkaat -- 13,999(f) 13,999 -- 298,681 298,681
Outotec -- 9,661 9,661 -- 305,535 305,535
Poyry 12,503 -- 12,503 184,970 -- 184,970
Ramirent 16,700 -- 16,700(b) 166,093 -- 166,093
Stockmann Series B 10,588 -- 10,588 271,208 -- 271,208
Tieto 9,360 -- 9,360 186,918 -- 186,918
-------------------------------------------------------
Total 975,022 604,216 1,579,238
-------------------------------------------------------
FRANCE (4.0%)
APRIL GROUP -- 12,170(f) 12,170 -- 456,347 456,347
BIC 2,655 -- 2,655 184,248 -- 184,248
bioMerieux -- 2,997(f) 2,997 -- 332,614 332,614
Carbone Lorraine 4,076 -- 4,076 139,643 -- 139,643
Derichebourg 15,400 -- 15,400 75,601 -- 75,601
Eutelsat
Communications 4,050 -- 4,050 128,714 -- 128,714
Gameloft -- 55,854 55,854(b) -- 266,054 266,054
Havas 33,400 -- 33,400 126,932 -- 126,932
Hi-Media 6,700 -- 6,700(b) 47,757 -- 47,757
</Table>
69
<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
FRANCE (CONT.)
Imerys -- 11,078 11,078 $ -- $ 607,150 $ 607,150
Michelin Series B 1,950(f) -- 1,950 144,436 -- 144,436
Neopost 2,268 -- 2,268 198,461 -- 198,461
Nexans 1,576 -- 1,576 111,277 -- 111,277
Norbert
Dentressangle 1,285 -- 1,285 88,659 -- 88,659
PagesJaunes Groupe 8,100 -- 8,100 99,239 -- 99,239
Pierre & Vacances 1,800 -- 1,800 148,328 -- 148,328
Publicis Groupe 3,000(f) -- 3,000 113,981 -- 113,981
Rallye 3,698 -- 3,698 125,541 -- 125,541
Rhodia 9,219 -- 9,219(b) 135,829 -- 135,829
Rubis 1,200 -- 1,200 110,158 -- 110,158
Saft Groupe 3,600 -- 3,600 186,896 -- 186,896
SEB 2,500 -- 2,500 139,131 -- 139,131
Seche Environnement -- 5,060 5,060 -- 431,171 431,171
Sechilienne-Sidec -- 12,817 12,817 -- 518,055 518,055
Technip 2,017 -- 2,017 126,530 -- 126,530
Vilmorin & Cie -- 2,978(f) 2,978 -- 326,187 326,187
Zodiac 4,100 -- 4,100 138,281 -- 138,281
-------------------------------------------------------
Total 2,569,642 2,937,578 5,507,220
-------------------------------------------------------
GERMANY (2.6%)
Adidas 2,700(f) -- 2,700 124,999 -- 124,999
CTS Eventim 5,058 -- 5,058 257,060 -- 257,060
Deutsche
Beteiligungs 2,400(f) -- 2,400 54,877 -- 54,877
Dialog
Semiconductor 3,500 -- 3,500(b) 30,349 -- 30,349
ElringKlinger 5,600(f) 18,946(f) 24,546 110,037 372,279 482,316
Fresenius Medical
Care & Co 3,000(f) -- 3,000 145,093 -- 145,093
GERRY WEBER Intl 6,250 -- 6,250 198,336 -- 198,336
Hannover
Rueckversicherung 4,271 -- 4,271(b) 193,657 -- 193,657
Infineon
Technologies 60,232(f) -- 60,232(b) 272,079 -- 272,079
Kloeckner & Co 4,501 -- 4,501(b) 97,751 -- 97,751
Kontron -- 25,092(f) 25,092 -- 298,553 298,553
Lanxess 2,510 -- 2,510 78,898 -- 78,898
Praktiker Bau- und
Heimwerkermaerkte
Holding -- 23,730 23,730 -- 281,573 281,573
Rational 1,045(f) -- 1,045 149,249 -- 149,249
Rhon-Klinikum 6,536 -- 6,536 157,909 -- 157,909
Salzgitter 1,435(f) -- 1,435 129,120 -- 129,120
Suedzucker 4,252 -- 4,252 87,882 -- 87,882
Takkt 4,700 -- 4,700 51,856 -- 51,856
Tognum 6,100(f) -- 6,100 93,755 -- 93,755
Vossloh 1,800(f) -- 1,800 177,350 -- 177,350
Wincor Nixdorf 2,400 -- 2,400 140,346 -- 140,346
Wirecard 5,700 -- 5,700 72,970 -- 72,970
-------------------------------------------------------
Total 2,623,573 952,405 3,575,978
-------------------------------------------------------
GREECE (0.1%)
Intralot-Integrated
Lottery Systems &
Services 26,400 -- 26,400 168,066 -- 168,066
-------------------------------------------------------
HONG KONG (2.1%)
ASM Pacific
Technology -- 53,300 53,300 -- 414,367 414,367
China Green
Holdings 225,000 -- 225,000 197,388 -- 197,388
Comba Telecom
Systems Holdings 74,800 -- 74,800 76,469 -- 76,469
Geely Automobile
Holdings 200,000 -- 200,000 72,316 -- 72,316
Great Eagle
Holdings 66,000 -- 66,000 174,102 -- 174,102
Hong Kong Exchanges
and Clearing 19,200 -- 19,200 337,975 -- 337,975
Hopson Development
Holdings 64,000 -- 64,000 111,999 -- 111,999
Johnson Electric
Holdings 262,000 -- 262,000(b) 115,074 -- 115,074
Lifestyle Intl
Holdings 165,500 -- 165,500 265,965 -- 265,965
Midland Holdings 158,000 -- 158,000 134,691 -- 134,691
Noble Group 99,000 -- 99,000 180,966 -- 180,966
Peace Mark Holdings 92,000(d,e,g) -- 92,000(b) -- -- --
</Table>
70
<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
HONG KONG (CONT.)
Ports Design 41,000 -- 41,000 $ 110,492 $ -- $ 110,492
REXCAPITAL
Financial Holdings 1,910,000 -- 1,910,000 168,028 -- 168,028
Sa Sa Intl Holdings -- 846,000 846,000 -- 420,688 420,688
Wasion Group
Holdings 91,500 -- 91,500 76,092 -- 76,092
-------------------------------------------------------
Total 2,021,557 835,055 2,856,612
-------------------------------------------------------
INDIA (1.5%)
Asian Paints 7,800 -- 7,800 271,459 -- 271,459
Balrampur Chini
Mills 30,119 -- 30,119 94,174 -- 94,174
Educomp Solutions 11,000 19,535 30,535 185,207 328,911 514,118
Emco 44,300 -- 44,300 76,345 -- 76,345
Housing Development
& Infrastructure 11,019 -- 11,019(b) 72,966 -- 72,966
Housing Development
Finance 3,250 -- 3,250 181,839 -- 181,839
India Infoline 23,997 -- 23,997 64,892 -- 64,892
IVRCL
Infrastructures &
Projects 8,537 -- 8,537 62,100 -- 62,100
Jain Irrigation
Systems 2,800 -- 2,800 45,217 -- 45,217
Mahindra & Mahindra 6,800 -- 6,800 131,565 -- 131,565
Mundra Port and
Special Economic
Zone 12,100 -- 12,100 127,447 -- 127,447
Patel Engineering 10,000 -- 10,000 95,175 -- 95,175
Shriram Transport
Finance 16,300 -- 16,300 134,900 -- 134,900
Voltas 24,500 -- 24,500 81,107 -- 81,107
Yes Bank 18,240 -- 18,240(b) 90,842 -- 90,842
-------------------------------------------------------
Total 1,715,235 328,911 2,044,146
-------------------------------------------------------
INDONESIA (0.2%)
Perusahaan Gas
Negara 550,000 -- 550,000 204,219 -- 204,219
Semen Gresik 96,500 -- 96,500 68,054 -- 68,054
-------------------------------------------------------
Total 272,273 -- 272,273
-------------------------------------------------------
IRELAND (0.5%)
DCC 5,400 -- 5,400 142,177 -- 142,177
Irish Life &
Permanent 20,319 -- 20,319 146,919 -- 146,919
Paddy Power 2,700 -- 2,700 85,482 -- 85,482
Smurfit Kappa Group 12,600 -- 12,600(b) 98,042 -- 98,042
United Drug 80,200 -- 80,200 264,264 -- 264,264
-------------------------------------------------------
Total 736,884 -- 736,884
-------------------------------------------------------
ISRAEL (0.5%)
Bezeq Israeli
Telecommunication 65,204 -- 65,204 145,663 -- 145,663
Cellcom Israel 3,500 -- 3,500 104,315 -- 104,315
Israel Chemicals 21,634 -- 21,634 252,947 -- 252,947
Israel Discount
Bank Series A 69,022 -- 69,022(b) 131,890 -- 131,890
-------------------------------------------------------
Total 634,815 -- 634,815
-------------------------------------------------------
ITALY (2.1%)
ACEA 4,583 -- 4,583 53,607 -- 53,607
Amplifon 37,697 -- 37,697(b) 146,450 -- 146,450
Bulgari -- 55,556(f) 55,556 -- 454,557 454,557
Compagnie
Industriali Riunite 74,401 -- 74,401(b) 167,392 -- 167,392
Credito Emiliano 20,700 -- 20,700(b) 135,000 -- 135,000
Danieli & C.
Officine Meccaniche 6,567 -- 6,567 164,871 -- 164,871
DiaSorin -- 14,579 14,579 -- 533,599 533,599
Esprinet 11,051 -- 11,051 110,719 -- 110,719
Immobiliare Grande
Distribuzione -- 158,554(f) 158,554 -- 341,508 341,508
Impregilo 43,897 -- 43,897 149,896 -- 149,896
Maire Tecnimont 31,900 -- 31,900 132,152 -- 132,152
Piaggio Group 32,054(f) -- 32,054 81,456 -- 81,456
Prysmian 6,900 -- 6,900 121,310 -- 121,310
Recordati 27,200 -- 27,200 211,002 -- 211,002
Terna -- Rete
Elettrica Nationale 20,800 -- 20,800 82,459 -- 82,459
-------------------------------------------------------
Total 1,556,314 1,329,664 2,885,978
-------------------------------------------------------
</Table>
71
<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
JAPAN (17.4%)
77 Bank 9,000 55,000 64,000 $ 51,798 $ 316,542 $ 368,340
ABC-MART -- 15,100(f) 15,100 -- 437,672 437,672
AEON Delight 11,200 -- 11,200 171,727 -- 171,727
AEON Mall 7,500 -- 7,500 157,167 -- 157,167
Aichi Steel 44,000 -- 44,000 210,618 -- 210,618
Ain Pharmaciez 4,900 -- 4,900 145,276 -- 145,276
AIR WATER -- 20,000 20,000 -- 235,749 235,749
Alpen 4,500 -- 4,500 82,956 -- 82,956
AS ONE 2,300 -- 2,300 42,447 -- 42,447
Asics 15,400 41,900 57,300 137,282 373,513 510,795
Benesse Holdings 3,100 -- 3,100 136,696 -- 136,696
Canon Marketing
Japan -- 21,300 21,300 -- 345,110 345,110
Cawachi 7,400 -- 7,400 153,539 -- 153,539
Chugoku Marine
Paints 16,000(f) -- 16,000 112,227 -- 112,227
Chuo Mitsui Trust
Holdings 23,900 -- 23,900 87,286 -- 87,286
Circle K Sunkus 4,700 -- 4,700 64,522 -- 64,522
COMSYS Holdings 10,000 -- 10,000 98,838 -- 98,838
Cosmos
Pharmaceutical -- 21,000 21,000 -- 540,379 540,379
CyberAgent -- 352 352 -- 457,855 457,855
Daiichikosho 16,000 -- 16,000 185,501 -- 185,501
Daimei Telecom
Engineering 8,600 -- 8,600 72,424 -- 72,424
Dainippon Screen
Mfg -- 126,000(f) 126,000(b) -- 535,568 535,568
Daiseki 5,700 -- 5,700 112,018 -- 112,018
Doutor Nichires
Holdings 5,500 -- 5,500 79,605 -- 79,605
eAccess 130 -- 130 91,182 -- 91,182
Edion 12,100(f) -- 12,100 97,734 -- 97,734
EPS -- 101 101 -- 404,973 404,973
Fuji Oil 5,400 -- 5,400 81,524 -- 81,524
Fuji Seal Intl 2,800 -- 2,800 56,609 -- 56,609
Fujikura 14,000 -- 14,000 67,506 -- 67,506
Fukuoka REIT 23 -- 23 131,801 -- 131,801
Glory 6,400 -- 6,400 140,833 -- 140,833
Gree -- 800 800 -- 43,868 43,868
Hamamatsu Photonics 4,000(f) -- 4,000 99,655 -- 99,655
Haseko -- 210,500 210,500(b) -- 161,580 161,580
Hino Motors -- 91,000(f) 91,000 -- 336,423 336,423
Hitachi Koki -- 32,300(f) 32,300 -- 357,556 357,556
Hitachi Metals -- 45,000(f) 45,000 -- 429,355 429,355
Hogy Medical 1,400 -- 1,400 75,257 -- 75,257
Honeys 10,320 -- 10,320 69,534 -- 69,534
HOSHIZAKI ELECTRIC -- 27,900 27,900 -- 396,842 396,842
Hosiden 5,200(f) -- 5,200 62,975 -- 62,975
Ibiden 4,600 -- 4,600 164,701 -- 164,701
Icom 1,200 -- 1,200 28,980 -- 28,980
IT Holdings 4,700 -- 4,700 57,926 -- 57,926
Jafco -- 15,800 15,800 -- 424,798 424,798
Jupiter
Telecommunications 236 -- 236 215,724 -- 215,724
Kakaku.com 20 102 122 73,138 373,003 446,141
Kaken
Pharmaceutical 11,000 -- 11,000 99,541 -- 99,541
Kamigumi 23,700 -- 23,700 178,035 -- 178,035
Kandenko 16,000 -- 16,000 98,687 -- 98,687
Kanematsu 103,000 -- 103,000(b) 84,687 -- 84,687
Kansai Paint 48,900 -- 48,900 413,802 -- 413,802
Kenedix 170 -- 170(b) 67,331 -- 67,331
Kintetsu World
Express 5,200 -- 5,200 120,872 -- 120,872
Kobayashi
Pharmaceutical -- 10,200(f) 10,200 -- 439,014 439,014
Kumagai Gumi 99,000 -- 99,000(b) 70,062 -- 70,062
Kureha -- 47,000(f) 47,000 -- 253,535 253,535
Kyowa Exeo 16,000(f) -- 16,000 146,551 -- 146,551
Leopalace21 7,400 -- 7,400 40,044 -- 40,044
</Table>
72
<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
JAPAN (CONT.)
Maeda Road
Construction 12,000 -- 12,000 $ 97,818 $ -- $ 97,818
Makita 4,300 13,200 17,500 142,510 437,473 579,983
Maruetsu 22,000(f) -- 22,000 101,563 -- 101,563
Megachips 2,000 -- 2,000 33,121 -- 33,121
Megane TOP 5,000(f) -- 5,000 86,134 -- 86,134
Miraca Holdings 5,500 -- 5,500 177,882 -- 177,882
MIURA 4,300(f) 15,000(f) 19,300 120,089 418,915 539,004
Modec -- 22,500 22,500 -- 447,119 447,119
Mori Seiki -- 44,800 44,800 -- 485,415 485,415
Morinaga Milk
Industry 34,000(f) -- 34,000 158,644 -- 158,644
Musashi Seimitsu
Industry 1,800 -- 1,800 37,352 -- 37,352
Nabtesco -- 21,000(f) 21,000 -- 241,786 241,786
Nakanishi 1,500 -- 1,500 128,901 -- 128,901
Net One Systems 84 -- 84 110,126 -- 110,126
Nippon
Accommodations Fund 17(f) -- 17 93,937 -- 93,937
Nippon Carbon -- 85,000 85,000 -- 289,956 289,956
Nippon Denko -- 68,000(f) 68,000 -- 483,760 483,760
Nippon Residential
Investment 92 -- 92 242,978 -- 242,978
Nishimatsuya Chain 10,200 -- 10,200 102,163 -- 102,163
Nishi-Nippon City
Bank 61,000 -- 61,000 150,912 -- 150,912
NS Solutions 5,100 -- 5,100 93,314 -- 93,314
Okinawa Electric
Power 2,370 -- 2,370 127,650 -- 127,650
Olympus 3,700 -- 3,700 115,495 -- 115,495
OPT -- 199 199 -- 256,208 256,208
ORIX JREIT 35 -- 35 160,318 -- 160,318
Osaka Securities
Exchange 32 139 171 153,571 667,076 820,647
Pacific Golf Group
Intl Holdings 86 -- 86 58,994 -- 58,994
PARCO -- 29,200 29,200 -- 255,641 255,641
POINT 5,440(f) 4,920 10,360 321,586 290,846 612,432
Prima Meat Packers 90,000 -- 90,000 104,133 -- 104,133
Rohto
Pharmaceutical 15,100 -- 15,100 193,101 -- 193,101
San-in Godo Bank 8,000 -- 8,000 69,566 -- 69,566
Seven Bank 79(f) 98 177 193,001 239,421 432,422
Shinko Plantech -- 42,000 42,000 -- 429,190 429,190
Shinsei Bank 89,000 -- 89,000(b) 119,642 -- 119,642
So-net
Entertainment 42(f) -- 42 91,654 -- 91,654
Square Enix
Holdings -- 23,700 23,700 -- 589,988 589,988
Sugi Pharmacy -- 10,100 10,100 -- 219,375 219,375
Suruga Bank 12,500 -- 12,500 112,941 -- 112,941
Tamron 6,000(f) -- 6,000 65,372 -- 65,372
TBK 35,000 -- 35,000 58,747 -- 58,747
TOC 3,000 -- 3,000 14,071 -- 14,071
Toho Gas 20,000(f) -- 20,000 103,720 -- 103,720
Tokyo Ohka Kogyo -- 18,800 18,800 -- 362,231 362,231
Topy Inds 26,000 -- 26,000 50,468 -- 50,468
Torishima Pump Mfg 4,000(f) -- 4,000 69,411 -- 69,411
Toyo Engineering -- 89,000 89,000 -- 296,407 296,407
Toyo Tanso 840(f) 6,700(f) 7,540 41,523 331,193 372,716
Tsumura & Co 2,700 15,700 18,400 92,916 540,290 633,206
Unicharm PetCare 3,000(f) -- 3,000 106,023 -- 106,023
United Arrows 16,600(f) -- 16,600 168,751 -- 168,751
Ushio 6,800 -- 6,800 106,906 -- 106,906
Valor 18,000 -- 18,000 154,449 -- 154,449
Wacom 53 -- 53 117,967 -- 117,967
ZENRIN 5,300 -- 5,300 77,610 -- 77,610
-------------------------------------------------------
Total 9,863,648 14,145,625 24,009,273
-------------------------------------------------------
LUXEMBOURG (0.1%)
SES FDR 5,300 -- 5,300 114,827 -- 114,827
-------------------------------------------------------
</Table>
73
<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
MALAYSIA (0.2%)
Genting Plantations -- 72,500 72,500 $ -- $ 129,713 $ 129,713
Kulim Malaysia -- 28,300 28,300 -- 61,330 61,330
IJM 78,260 -- 78,260 109,240 -- 109,240
-------------------------------------------------------
Total 109,240 191,043 300,283
-------------------------------------------------------
MEXICO (0.7%)
Coca-Cola Femsa ADR 1,900 -- 1,900 102,486 -- 102,486
Corporacion GEO
Series B 74,800 -- 74,800(b) 196,945 -- 196,945
Grupo Aeroportuario
del Sureste ADR 5,230 -- 5,230 212,809 -- 212,809
Mexichem 141,270 -- 141,270 224,779 -- 224,779
Urbi Desarrollos
Urbanos 132,000 -- 132,000(b) 253,136 -- 253,136
-------------------------------------------------------
Total 990,155 -- 990,155
-------------------------------------------------------
NETHERLANDS (2.4%)
Aalberts Inds 12,641 -- 12,641 158,362 -- 158,362
Accell Group 2,500 -- 2,500 121,805 -- 121,805
AerCap Holdings 12,400(f) -- 12,400(b) 103,912 -- 103,912
Arcadis 13,400 -- 13,400 267,842 -- 267,842
ASM Intl 6,000 -- 6,000 121,556 -- 121,556
BinckBank 11,235 -- 11,235 222,238 -- 222,238
Core Laboratories 400 -- 400 41,720 -- 41,720
Fugro 5,499 -- 5,499 306,255 -- 306,255
Grontmij 718 -- 718 19,762 -- 19,762
Imtech 21,403 -- 21,403 543,995 -- 543,995
Koninklijke Vopak 3,750 -- 3,750(b) 252,976 -- 252,976
Qiagen 4,999 -- 4,999(b) 103,802 -- 103,802
Smit Intl 1,850 -- 1,850 145,404 -- 145,404
SNS Reaal 13,718 -- 13,718(b) 96,952 -- 96,952
Ten Cate 15,753(f) -- 15,753 368,752 -- 368,752
Unit 4 Agresso 18,500 -- 18,500(b) 439,571 -- 439,571
-------------------------------------------------------
Total 3,314,904 -- 3,314,904
-------------------------------------------------------
NORWAY (0.5%)
Atea 17,200 -- 17,200 112,952 -- 112,952
Norwegian Energy -- 91,000 91,000(b) -- 245,471 245,471
Tandberg 4,500 -- 4,500 120,451 -- 120,451
TGS NOPEC
Geophysical 11,600 -- 11,600(b) 176,009 -- 176,009
-------------------------------------------------------
Total 409,412 245,471 654,883
-------------------------------------------------------
PANAMA (-- %)
Thunderbird Resorts -- 63,629 63,629(b) -- 58,539 58,539
-------------------------------------------------------
PERU (0.1%)
Hochschild Mining 21,900 -- 21,900 98,388 -- 98,388
-------------------------------------------------------
PHILIPPINE ISLANDS (0.2%)
Alliance Global
Group 1,469,000 -- 1,469,000(b) 130,544 -- 130,544
Robinsons Land 379,200 -- 379,200 96,258 -- 96,258
-------------------------------------------------------
Total 226,802 -- 226,802
-------------------------------------------------------
POLAND (0.2%)
Getin Holding 31,657 -- 31,657(b) 90,183 -- 90,183
KGHM Polska Miedz 5,431 -- 5,431 182,988 -- 182,988
-------------------------------------------------------
Total 273,171 -- 273,171
-------------------------------------------------------
PORTUGAL (0.1%)
Mota Engil 18,484 -- 18,484 109,787 -- 109,787
Redes Energeticas
Nacionais 13,700 -- 13,700 60,069 -- 60,069
-------------------------------------------------------
Total 169,856 -- 169,856
-------------------------------------------------------
SINGAPORE (1.9%)
Ascendas Real
Estate Investment
Trust 161,000 -- 161,000 209,310 -- 209,310
CDL Hospitality
Trusts 225,000 -- 225,000 251,912 -- 251,912
CH Offshore 261,700 -- 261,700 127,178 -- 127,178
</Table>
74
<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
SINGAPORE (CONT.)
Goodpack -- 241,000(f) 241,000 $ -- $ 217,829 $ 217,829
Indofood Agri
Resources -- 290,000 290,000(b) -- 346,294 346,294
Mapletree Logistics
Trust 560,000 -- 560,000 298,152 -- 298,152
Olam Intl 345,000(f) -- 345,000 662,402 -- 662,402
SembCorp Marine 35,000 -- 35,000 85,389 -- 85,389
Singapore Exchange 52,000 -- 52,000 294,737 -- 294,737
Suntec REIT 109,000 -- 109,000 92,738 -- 92,738
-------------------------------------------------------
Total 2,021,818 564,123 2,585,941
-------------------------------------------------------
SOUTH AFRICA (1.0%)
Aquarius Platinum -- 57,384 57,384(b) -- 244,683 244,683
Barloworld 22,364 -- 22,364 139,556 -- 139,556
Group Five 27,200 -- 27,200 139,297 -- 139,297
Hyprop Investments 20,893 -- 20,893 121,357 -- 121,357
Mr Price Group 35,400 -- 35,400 162,102 -- 162,102
Naspers Series N 14,360 -- 14,360 518,816 -- 518,816
Randgold Resources
ADR 1,600 -- 1,600 106,736 -- 106,736
-------------------------------------------------------
Total 1,187,864 244,683 1,432,547
-------------------------------------------------------
SOUTH KOREA (2.8%)
Busan Bank 5,790 -- 5,790 65,684 -- 65,684
CJ Cheiljedang -- 2,286 2,286 -- 386,760 386,760
Daou Technology 10,300 -- 10,300 63,851 -- 63,851
Dongbu Insurance 3,130 -- 3,130 95,020 -- 95,020
Doosan Engineering
& Construction 8,200 -- 8,200 50,229 -- 50,229
GS Engineering &
Construction -- 6,284 6,284 -- 551,314 551,314
Halla Climate
Control 8,800 -- 8,800 85,594 -- 85,594
HUMAX Holdings 2,042 -- 2,042(b) 22,221 -- 22,221
HUMAX Holdings 457 -- 457 5,608 -- 5,608
Hyundai Marine &
Fire Insurance 4,900 -- 4,900 90,545 -- 90,545
Industrial Bank of
Korea 6,000 -- 6,000(b) 72,721 -- 72,721
INTOPS 4,810 -- 4,810 69,369 -- 69,369
LIG Insurance 4,730 -- 4,730 96,946 -- 96,946
MegaStudy 1,356 3,277 4,633 282,128 681,809 963,937
Mirae Asset
Securities 2,891 6,213 9,104 151,186 324,911 476,097
NHN 1,810 -- 1,810(b) 267,082 -- 267,082
People &
Telecommuncation 7,435 -- 7,435 65,836 -- 65,836
Taewoong 1,900 -- 1,900 129,620 -- 129,620
Woongjin Coway 6,780 -- 6,780 226,751 -- 226,751
Woongjin Thinkbig 2,370 -- 2,370 44,610 -- 44,610
-------------------------------------------------------
Total 1,885,001 1,944,794 3,829,795
-------------------------------------------------------
SPAIN (0.7%)
Bolsas y Mercados
Espanoles 4,800 -- 4,800 160,002 -- 160,002
Duro Felguera 10,469 -- 10,469 104,051 -- 104,051
Grupo Catalana
Occidente 5,126 -- 5,126 124,188 -- 124,188
Obrascon Huarte
Lain 6,400 -- 6,400 170,032 -- 170,032
Red Electrica de
Espana 6,980 -- 6,980 360,479 -- 360,479
-------------------------------------------------------
Total 918,752 -- 918,752
-------------------------------------------------------
SWEDEN (1.0%)
Axfood 3,450 -- 3,450 102,982 -- 102,982
Bjoern Borg -- 46,467(f) 46,467 -- 364,169 364,169
East Capital
Explorer 5,000(f) -- 5,000(b) 45,632 -- 45,632
Hexagon Series B 29,453(f) -- 29,453 385,270 -- 385,270
Nobia 35,200 -- 35,200(b) 218,581 -- 218,581
Sweco Series B 28,900 -- 28,900 227,445 -- 227,445
-------------------------------------------------------
Total 979,910 364,169 1,344,079
-------------------------------------------------------
</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
SWITZERLAND (2.9%)
Adecco 1,900(f) -- 1,900 $ 84,900 $ -- $ 84,900
Aryzta 2,000 -- 2,000(b) 77,391 -- 77,391
Baloise Holding 1,200 -- 1,200 102,746 -- 102,746
Bank Sarasin & Co
Series B 1,700 -- 1,700 67,691 -- 67,691
Burckhardt
Compression Holding 675 -- 675 98,364 -- 98,364
Clariant 13,297(f) -- 13,297(b) 127,124 -- 127,124
Dufry Group -- 7,293(f) 7,293(b) -- 460,674 460,674
EMS-Chemie Holding 900 -- 900 99,997 -- 99,997
Ferrexpo 29,529 -- 29,529 71,880 -- 71,880
Galenica 400(f) -- 400 137,827 -- 137,827
Geberit 1,400 -- 1,400 231,599 -- 231,599
Helvetia Holding 550 -- 550 175,365 -- 175,365
Kuehne & Nagel Intl 2,100 -- 2,100 190,268 -- 190,268
Logitech Intl -- 22,549(f) 22,549(b) -- 384,912 384,912
Panalpina
Welttransport
Holding -- 3,299(f) 3,299 -- 231,032 231,032
Sika 160 -- 160 216,914 -- 216,914
Temenos Group -- 32,950(f) 32,950(b) -- 752,036 752,036
Valora Holding 379 -- 379 90,363 -- 90,363
Valiant Holding -- 1,881 1,881 -- 370,597 370,597
-------------------------------------------------------
Total 1,772,429 2,199,251 3,971,680
-------------------------------------------------------
TAIWAN (1.3%)
Catcher Technology 36,300 -- 36,300 87,877 -- 87,877
Cheng Shin Rubber
Ind 45,700 -- 45,700 93,911 -- 93,911
China Life
Insurance 110,000 -- 110,000(b) 79,889 -- 79,889
Everlight
Electronics 66,700 -- 66,700 182,341 -- 182,341
Formosa Intl Hotels 11,180 -- 11,180 139,499 -- 139,499
Huaku Development 39,000 -- 39,000 92,487 -- 92,487
King Yuan
Electronics 225,000 -- 225,000 86,845 -- 86,845
Novatek
Microelectronics 26,285 -- 26,285 59,303 -- 59,303
President Chain
Store 57,000 -- 57,000 128,971 -- 128,971
Radiant Opto-
Electronics 48,300 -- 48,300 53,743 -- 53,743
Simplo Technology 38,000 -- 38,000 195,135 -- 195,135
Sunrex Technology 58,000 -- 58,000 59,608 -- 59,608
Taishin Financial
Holding 242,000 -- 242,000(b) 94,709 -- 94,709
Unimicron
Technology 64,000 -- 64,000 73,025 -- 73,025
Wistron 38,388 -- 38,388 64,266 -- 64,266
WPG Holdings 66,000 -- 66,000 90,299 -- 90,299
Yuanta Financial
Holding 370,000 -- 370,000 244,181 -- 244,181
-------------------------------------------------------
Total 1,826,089 -- 1,826,089
-------------------------------------------------------
THAILAND (0.1%)
LPN Development 454,000 -- 454,000 94,377 -- 94,377
-------------------------------------------------------
TURKEY (0.4%)
Anadolu Sigorta 200,357 -- 200,357 165,404 -- 165,404
Haci Omer Sabanchi
Holding 28,548 -- 28,548 104,389 -- 104,389
Halk Bankasi 36,000 -- 36,000 215,483 -- 215,483
Vakiflar Bankasi
Tao Series D 48,267 -- 48,267(b) 117,071 -- 117,071
Yapi ve Kredi
Bankasi -- -- --(b) 1 -- 1
-------------------------------------------------------
Total 602,348 -- 602,348
-------------------------------------------------------
UNITED ARAB EMIRATES (0.1%)
Lamprell 34,351 -- 34,351 114,037 -- 114,037
UNITED KINGDOM (10.5%)
Acergy 13,400 -- 13,400 167,462 -- 167,462
AMEC -- 22,735 22,735 -- 299,401 299,401
ARM Holdings -- 99,703 99,703 -- 242,180 242,180
Ashmore Group 17,016 -- 17,016 76,025 -- 76,025
ASOS -- 54,375 54,375(b) -- 350,904 350,904
Atkins WS 10,840 -- 10,840 100,248 -- 100,248
</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
UNITED KINGDOM (CONT.)
Babcock Intl Group -- 59,002 59,002 $ -- $ 585,698 $ 585,698
Barratt
Developments 21,600 -- 21,600(b) 47,683 -- 47,683
Beazley 66,600 -- 66,600 116,853 -- 116,853
BowLeven 62,009 -- 62,009(b) 88,411 -- 88,411
Cape 29,122 -- 29,122(b) 119,398 -- 119,398
Capita Group 24,655 -- 24,655 307,902 -- 307,902
Capital & Regional 180,994 -- 180,994(b) 100,544 -- 100,544
Chemring Group 3,800 15,593 19,393 164,538 675,167 839,705
Chloride Group -- 134,935 134,935 -- 356,217 356,217
Close Brothers
Group 14,576 44,426 59,002 167,599 510,821 678,420
Cobham 43,000 -- 43,000 154,496 -- 154,496
Connaught -- 53,271 53,271 -- 353,192 353,192
Cookson Group 13,773 -- 13,773(b) 82,178 -- 82,178
CSR 13,800 -- 13,800(b) 100,717 -- 100,717
Dairy Crest Group 24,989 -- 24,989 163,793 -- 163,793
Debenhams 107,976 -- 107,976 137,644 -- 137,644
Domino's Pizza UK &
IRL -- 80,333 80,333 -- 401,870 401,870
Electrocomponents 9,200 -- 9,200 22,066 -- 22,066
Eurasian Natural
Resources 7,337 -- 7,337 99,833 -- 99,833
Fidessa Group 2,676 -- 2,676 52,459 -- 52,459
Galiform 135,200 -- 135,200(b) 165,961 -- 165,961
GAME Group -- 84,065 84,065 -- 203,974 203,974
GKN 55,879 -- 55,879(b) 97,875 -- 97,875
Hampson Inds -- 239,520 239,520 -- 284,729 284,729
Home Retail Group 41,265 -- 41,265 196,389 -- 196,389
Hunting -- 34,269 34,269 -- 294,331 294,331
IG Group Holdings -- 80,249 80,249 -- 396,774 396,774
Inchcape 200,419 -- 200,419(b) 96,116 -- 96,116
Infinity Bio-Energy -- 340,514(d,e,g) 340,514(b) -- -- --
Intertek Group 14,000 -- 14,000 287,607 -- 287,607
Intl Personal
Finance 68,749 -- 68,749 230,963 -- 230,963
James Fisher & Sons -- 39,396 39,396 -- 280,119 280,119
Jardine Lloyd
Thompson Group 14,800 -- 14,800 110,097 -- 110,097
JD Wetherspoon 16,100 -- 16,100 121,337 -- 121,337
Keller Group 22,700 -- 22,700 265,576 -- 265,576
Laird 10,700 -- 10,700 25,577 -- 25,577
Mears Group -- 92,791 92,791 -- 428,449 428,449
Misys 50,200 -- 50,200(b) 169,923 -- 169,923
Mondi 37,258 -- 37,258 205,633 -- 205,633
N Brown Group 24,000 104,127 128,127 102,593 445,114 547,707
Natl Express Group 25,238 -- 25,238 134,235 -- 134,235
Next 8,186 -- 8,186 240,131 -- 240,131
Pace 27,355 -- 27,355 99,050 -- 99,050
Petrofac 5,100 -- 5,100 78,486 -- 78,486
Regus 64,200 -- 64,200 107,222 -- 107,222
Rightmove 20,200 39,574 59,774 174,245 341,365 515,610
Rotork 4,848 -- 4,848 90,200 -- 90,200
RPS Group 35,000 -- 35,000 119,997 -- 119,997
Schroders 10,000 -- 10,000 179,790 -- 179,790
Serco Group 46,000 -- 46,000 380,501 -- 380,501
Smith & Nephew 9,488 -- 9,488 83,864 -- 83,864
Sports Direct Intl 67,379 -- 67,379 107,565 -- 107,565
Tullett Prebon 27,406 -- 27,406 162,637 -- 162,637
Tullow Oil 5,300 -- 5,300 102,662 -- 102,662
Ultra Electronics
Holdings -- 28,530 28,530 -- 615,760 615,760
VT Group -- 69,318 69,318 -- 616,982 616,982
Xchanging -- 112,469 112,469 -- 410,760 410,760
-------------------------------------------------------
Total 6,406,081 8,093,807 14,499,888
-------------------------------------------------------
</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
UNITED STATES (22.7%)
Acadia
Pharmaceuticals -- 67,888 67,888(b) $ -- $ 88,254 $ 88,254
Akamai Technologies -- 16,300(f) 16,300(b) -- 358,600 358,600
Alexion
Pharmaceuticals 4,530(f) -- 4,530(b) 201,177 -- 201,177
Allied Nevada Gold -- 24,600(f) 24,600(b) -- 234,930 234,930
AMCOL Intl -- 9,600(f) 9,600 -- 249,984 249,984
Ameron Intl -- 4,600 4,600 -- 271,308 271,308
AmSurg -- 18,950 18,950(b) -- 399,277 399,277
Anworth Mtge Asset -- 41,600(f) 41,600 -- 296,608 296,608
Applied Industrial
Technologies -- 16,700 16,700 -- 337,841 337,841
AptarGroup -- 9,200 9,200 -- 324,852 324,852
Arena
Pharmaceuticals -- 80,315(f) 80,315(b) -- 283,512 283,512
Ariba -- 25,200(f) 25,200(b) -- 297,864 297,864
ARRIS Group -- 25,200(f) 25,200(b) -- 258,552 258,552
Artio Global
Investors -- 14,100 14,100(b) -- 331,491 331,491
Atwood Oceanics 10,009 -- 10,009(b) 355,218 -- 355,218
BioMarin
Pharmaceuticals 5,576(f) -- 5,576(b) 86,763 -- 86,763
BPZ Resources -- 42,400 42,400(b) -- 267,120 267,120
Bristow Group 2,000(f) -- 2,000(b) 58,300 -- 58,300
Brocade
Communications
Sytems -- 30,200 30,200(b) -- 259,116 259,116
Cal Dive Intl -- 42,800 42,800(b) -- 328,704 328,704
Capstead Mtge -- 25,100 25,100 -- 330,316 330,316
Carlisle Companies -- 9,100 9,100 -- 282,464 282,464
Carpenter
Technology -- 13,800 13,800 -- 290,214 290,214
Carter's -- 12,300 12,300(b) -- 290,280 290,280
Cato Cl A -- 13,400(f) 13,400 -- 264,114 264,114
Centene -- 19,200 19,200(b) -- 342,336 342,336
Central European
Distribution 7,309(f) -- 7,309(b) 227,384 -- 227,384
CIRCOR Intl -- 8,400 8,400 -- 228,900 228,900
Cogdell Spencer -- 60,000 60,000 -- 278,400 278,400
Comverse Technology -- 32,800 32,800(b) -- 275,028 275,028
CRA Intl -- 16,800(f) 16,800(b) -- 415,800 415,800
Crane -- 9,300 9,300 -- 259,005 259,005
CreXus Investment -- 12,700 12,700(b) -- 180,086 180,086
Cubic -- 6,400 6,400 -- 222,144 222,144
Dollar Financial -- 12,800(f) 12,800(b) -- 240,256 240,256
DSP Group -- 31,800 31,800(b) -- 183,804 183,804
DSW Cl A -- 20,900 20,900(b) -- 401,280 401,280
Duff & Phelps Cl A -- 15,500(f) 15,500 -- 266,445 266,445
EF Johnson
Technologies -- 49,700 49,700(b) -- 67,095 67,095
EMCOR Group -- 14,300(f) 14,300(b) -- 337,767 337,767
Emulex -- 34,000 34,000(b) -- 343,400 343,400
First Busey -- 30,757 30,757 -- 119,030 119,030
First Financial
Holdings -- 15,900(f) 15,900 -- 214,491 214,491
Flowers Foods -- 14,850(f) 14,850 -- 346,896 346,896
Flushing Financial -- 30,200 30,200 -- 339,146 339,146
FMC Technologies 1,930 -- 1,930(b) 101,518 -- 101,518
Force Protection -- 45,200 45,200(b) -- 198,880 198,880
GeoEye -- 11,000(f) 11,000(b) -- 279,070 279,070
Golden Star
Resources 30,500 -- 30,500(b) 94,916 -- 94,916
Great Lakes Dredge
& Dock -- 51,500 51,500 -- 315,695 315,695
Grubb & Ellis -- 179,500(f) 179,500(b) -- 267,455 267,455
Grubb & Ellis -- 2,200(g) 2,200(b) -- 220,000 220,000
H&E Equipment
Services -- 26,700(f) 26,700(b) -- 283,020 283,020
Hatteras Financial -- 2,300(f) 2,300 -- 64,630 64,630
Hudson Valley
Holding -- 12,400(f) 12,400 -- 310,000 310,000
Illumina 2,307(f) -- 2,307(b) 74,055 -- 74,055
Imation -- 38,400(f) 38,400 -- 338,688 338,688
Incyte -- 33,800(f) 33,800(b) -- 199,082 199,082
Inspire
Pharmaceuticals -- 44,100 44,100(b) -- 197,127 197,127
Integral Systems -- 26,900(f) 26,900(b) -- 225,960 225,960
</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
UNITED STATES (CONT.)
Investors Real
Estate Trust -- 39,700(f) 39,700 $ -- $ 332,289 $ 332,289
Jaguar Mining -- 35,400(f) 35,400(b) -- 297,714 297,714
JDA Software Group -- 15,700 15,700(b) -- 311,488 311,488
Kansas City Life
Insurance -- 6,700(f) 6,700 -- 179,828 179,828
King
Pharmaceuticals -- 33,900 33,900(b) -- 343,407 343,407
Kirby -- 9,200(f) 9,200(b) -- 310,960 310,960
Knot -- 36,328(f) 36,328(b) -- 387,620 387,620
Lance -- 13,800 13,800 -- 332,856 332,856
Leap Wireless Intl -- 18,900(f) 18,900(b) -- 249,858 249,858
LHC Group -- 11,200(f) 11,200(b) -- 312,592 312,592
Lincoln Educational
Services -- 16,200(f) 16,200(b) -- 321,084 321,084
ManTech Intl Cl A -- 6,800 6,800(b) -- 298,248 298,248
MAXIMUS -- 6,200 6,200 -- 286,812 286,812
MB Financial -- 8,600(f) 8,600 -- 153,768 153,768
Medicines -- 45,400(f) 45,400(b) -- 326,426 326,426
MEDNAX -- 6,500(f) 6,500(b) -- 337,480 337,480
MFA Financial -- 41,900(f) 41,900 -- 310,898 310,898
Michael Baker -- 7,500(f) 7,500(b) -- 267,750 267,750
NBTY -- 8,200 8,200(b) -- 298,562 298,562
NETGEAR -- 18,200 18,200(b) -- 331,786 331,786
Neutral Tandem -- 14,900(f) 14,900(b) -- 314,241 314,241
Northern Oil and
Gas -- 32,000 32,000(b) -- 291,840 291,840
Novatel Wireless -- 37,700(f) 37,700(b) -- 336,284 336,284
Oceaneering Intl 2,585 -- 2,585(b) 132,094 -- 132,094
Odyssey HealthCare -- 27,000 27,000(b) -- 376,380 376,380
OfficeMax -- 29,300 29,300(b) -- 334,899 334,899
Old Natl Bancorp -- 29,700 29,700 -- 307,989 307,989
OSI Systems -- 16,900(f) 16,900(b) -- 331,747 331,747
Park
Electrochemical -- 12,400 12,400 -- 278,752 278,752
Parkervision -- 47,200(f) 47,200(b) -- 130,744 130,744
Portland General
Electric -- 16,600 16,600 -- 308,594 308,594
Prospect Capital -- 32,200(f) 32,200 -- 319,746 319,746
Quidel -- 23,100(f) 23,100(b) -- 330,330 330,330
Regis -- 22,800 22,800 -- 370,272 370,272
Rentech -- 198,100(f) 198,100(b) -- 247,625 247,625
ResCare -- 27,100 27,100(b) -- 326,013 326,013
Retail Ventures -- 51,700(f) 51,700(b) -- 331,397 331,397
Rigel
Pharmaceuticals -- 57,354(f) 57,354(b) -- 367,639 367,639
Rosetta Resources -- 23,500 23,500(b) -- 317,955 317,955
RSC Holdings -- 40,000(f) 40,000(b) -- 269,600 269,600
SeaChange Intl -- 32,500 32,500(b) -- 220,025 220,025
Shutterfly -- 16,800(f) 16,800(b) -- 236,880 236,880
SRA Intl Cl A -- 14,000 14,000(b) -- 262,640 262,640
Swift Energy -- 13,500 13,500(b) -- 285,930 285,930
TAL Intl Group -- 23,700(f) 23,700 -- 281,082 281,082
Terex -- 18,400(f) 18,400(b) -- 372,048 372,048
Titanium Asset
Management -- 95,000(g) 95,000(b) -- 237,500 237,500
Trimble Navigation -- 5,400(f) 5,400(b) -- 113,238 113,238
TTM Technologies -- 23,500 23,500(b) -- 238,995 238,995
Unisource Energy -- 11,700 11,700 -- 337,896 337,896
Universal Stainless
& Alloy Products -- 16,400(f) 16,400(b) -- 247,476 247,476
Virgin Media 5,600(g) -- 5,600 78,232 -- 78,232
W&T Offshore -- 25,000(f) 25,000 -- 291,250 291,250
Westar Energy -- 16,600 16,600 -- 317,890 317,890
World Acceptance -- 7,300(f) 7,300(b) -- 183,157 183,157
World Fuel Services 1,900(f) -- 1,900 96,615 -- 96,615
Zebra Technologies
Cl A -- 9,000(f) 9,000(b) -- 225,000 225,000
-------------------------------------------------------
Total 1,506,272 29,740,797 31,247,069
----------------------------------------------------------------------------------------------------------------------------
TOTAL COMMON STOCKS
(Cost:
$124,108,204) $60,228,520 $74,530,810 $134,759,330
----------------------------------------------------------------------------------------------------------------------------
</Table>
79
<Table>
<Caption>
BONDS (0.1%)(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
CANADA (0.1%)
Scorpio Mining
Cv
03-05-11 7.00% $-- $238,400(g) $238,400 $-- $202,242 $202,242
UNITED STATES
(-- %)
Nova Biosource
Fuels
Sr Secured
Cv
09-30-12 10.00 -- 948,707(i) 948,707 -- 2,372 2,372
---------------------------------------------------------------------------------------------------------------------------------
TOTAL BONDS
(Cost:
$1,182,593) $-- $204,614 $204,614
---------------------------------------------------------------------------------------------------------------------------------
</Table>
<Table>
<Caption>
PREFERRED STOCKS & OTHER (0.3%)
ISSUER SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
MALAYSIA (-- %)
IJM
Warrants 7,826(g) -- 7,826(b,c) $ 2,754 $ -- $ 2,754
UNITED KINGDOM (-- %)
Laird
Rights 5,350 -- 5,350(b,c) 3,556 -- 3,556
Titanium Asset Management
Warrants -- 95,000(g,d) 95,000(b,c) -- -- --
UNITED STATES (0.3%)
Callaway Golf Series B
Cv -- 2,700(i) 2,700 -- 310,986 310,986
Oilsands Quest
Warrants -- 98,350(g) 98,350(b) -- 47,734 47,734
Rentech
Warrants -- 7,000(d,g) 7,000(b) -- -- --
------------------------------------------
Total -- 358,720 358,720
-------------------------------------------------------------------------------------------------------------------------------
TOTAL PREFERRED STOCKS & OTHER
(Cost: $269,497) $ 6,310 $ 358,720 $ 365,030
-------------------------------------------------------------------------------------------------------------------------------
<Caption>
MONEY MARKET FUND (2.0%)
SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
RiverSource Short-Term Cash Fund,
0.25% 1,807,509 1,020,118 2,827,627(h) $ 1,807,509 $ 1,020,118 $ 2,827,627
-------------------------------------------------------------------------------------------------------------------------------
TOTAL MONEY MARKET FUND
(Cost: $2,827,627) $ 1,807,509 $ 1,020,118 $ 2,827,627
-------------------------------------------------------------------------------------------------------------------------------
<Caption>
INVESTMENTS OF CASH COLLATERAL RECEIVED FOR SECURITIES ON LOAN (17.5%)
SHARES SHARES SHARES VALUE(a) Value(a) Value(a)
CASH COLLATERAL REINVESTMENT FUND
JPMorgan Prime Money Market Fund 5,839,354 18,241,907 24,081,261 $ 5,839,354 $18,241,907 $ 24,081,261
-------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS OF CASH COLLATERAL
RECEIVED FOR SECURITIES ON LOAN
(Cost: $24,081,261) $ 5,839,354 $18,241,907 $ 24,081,261
-------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS IN SECURITIES
(Cost: $152,469,182)(j) $67,881,693 $94,356,169 $162,237,862
-------------------------------------------------------------------------------------------------------------------------------
</Table>
80
<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 Oct. 31, 2009:
PERCENTAGE OF
PRO FORMA
COMBINED
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
Aerospace & Defense 2.2% $ 561,227 $ 2,414,782 $ 2,976,009
Air Freight &
Logistics 0.5 209,531 448,861 658,392
Airlines 0.1 103,046 -- 103,046
Auto Components 1.0 715,799 670,960 1,386,759
Automobiles 0.3 482,703 -- 482,703
Beverages 0.4 536,921 -- 536,921
Biotechnology 0.9 287,940 938,487 1,226,427
Building Products 0.4 248,576 271,308 519,884
Capital Markets 3.3 1,606,613 2,949,113 4,555,726
Chemicals 2.2 2,235,846 851,515 3,087,361
Commercial Banks 3.3 2,260,370 2,266,502 4,526,872
Commercial Services
& Supplies 2.5 1,356,825 2,077,580 3,434,405
Communications
Equipment 1.8 319,565 2,181,102 2,500,667
Computers &
Peripherals 1.3 698,320 1,059,884 1,758,204
Construction &
Engineering 4.6 3,499,800 2,867,627 6,367,427
Construction
Materials 0.7 341,865 607,150 949,015
Consumer Finance 0.6 365,863 423,413 789,276
Containers &
Packaging 0.6 498,853 324,852 823,705
Distributors 0.5 96,116 624,214 720,330
Diversified
Consumer Services 1.8 806,567 1,702,076 2,508,643
Diversified
Financial Services 1.8 1,463,694 1,063,850 2,527,544
Diversified
Telecommunication
Services 0.5 386,992 314,241 701,233
Electric Utilities 1.2 710,847 964,380 1,675,227
Electrical
Equipment 1.5 1,060,235 977,366 2,037,601
Electronic
Equipment,
Instruments &
Components 1.6 1,070,575 1,180,486 2,251,061
Energy Equipment &
Services 2.8 2,408,693 1,504,414 3,913,107
Entertainment 0.2 -- 310,986 310,986
Food & Staples
Retailing 2.0 1,999,776 759,754 2,759,530
Food Products 2.9 1,349,258 2,597,029 3,946,287
Gas Utilities 0.3 418,097 -- 418,097
Health Care
Equipment &
Supplies 1.8 1,314,737 1,196,543 2,511,280
Health Care
Providers &
Services 2.3 1,039,012 2,094,078 3,133,090
Hotels, Restaurants
& Leisure 1.1 1,037,327 460,409 1,497,736
Household Durables 1.8 1,473,036 956,609 2,429,645
Household Products 0.2 -- 341,062 341,062
Independent Power
Producers & Energy
Traders 0.4 -- 518,055 518,055
Industrial
Conglomerates 1.1 756,082 698,273 1,454,355
Insurance 1.9 1,656,174 1,003,891 2,660,065
Internet & Catalog
Retail 1.0 350,838 1,032,898 1,383,736
Internet Software &
Services 1.3 586,907 1,163,091 1,749,998
IT Services 1.5 634,206 1,484,420 2,118,626
Leisure Equipment &
Products 0.1 187,177 -- 187,177
Life Sciences Tools
& Services 0.7 246,049 685,016 931,065
Machinery 3.6 1,964,030 2,938,214 4,902,244
Marine 0.5 400,461 310,960 711,421
Media 2.5 2,443,836 1,055,428 3,499,264
Metals 0.1 -- 202,242 202,242
Metals & Mining 4.5 2,936,905 3,224,123 6,161,028
Multiline Retail 1.2 1,072,758 587,038 1,659,796
Multi-Utilities 0.1 113,676 -- 113,676
Office Electronics 0.3 198,461 225,000 423,461
Oil, Gas &
Consumable Fuels 3.1 559,866 3,760,694 4,320,560
Other Industry -- -- 2,372 2,372
Paper & Forest
Products 0.4 597,223 -- 597,223
Personal Products 0.7 269,753 737,576 1,007,329
Pharmaceuticals 1.6 778,645 1,407,250 2,185,895
Professional
Services 1.0 992,490 415,800 1,408,290
Real Estate
Investment Trusts
(REITs) 2.8 1,692,407 2,134,735 3,827,142
Real Estate
Management &
Development 2.0 1,486,353 1,241,494 2,727,847
Road & Rail 0.9 553,434 684,195 1,237,629
Semiconductors &
Semiconductor
Equipment 1.7 724,592 1,674,472 2,399,064
Software 2.5 661,953 2,783,888 3,445,841
Specialty Retail 3.6 1,607,493 3,361,656 4,969,149
Textiles, Apparel &
Luxury Goods 2.0 1,082,281 1,707,690 2,789,971
Thrifts & Mortgage
Finance 0.7 370,592 553,637 924,229
Trading Companies &
Distributors 1.6 739,931 1,483,285 2,223,216
Transportation
Infrastructure 0.9 1,231,095 -- 1,231,095
Water Utilities 0.3 -- 366,260 366,260
Wireless
Telecommunication
Services 0.5 374,537 249,858 624,395
Other(1) 19.5 7,646,863 19,262,025 26,908,888
---------------------------------------------------------------------------------------------------
Total $67,881,693 $94,356,169 $162,237,862
---------------------------------------------------------------------------------------------------
</Table>
(1) Cash & Cash Equivalents.
81
<Table>
<Caption>
INVESTMENTS IN DERIVATIVES
FORWARD FOREIGN CURRENCY CONTRACTS OPEN AT OCT. 31, 2009
RIVERSOURCE PARTNERS INTERNATIONAL SMALL CAP FUND
CURRENCY TO BE CURRENCY TO BE UNREALIZED UNREALIZED
EXCHANGE DATE DELIVERED RECEIVED APPRECIATION DEPRECIATION
-------------------------------------------------------------------------------------------------------------------------------
Nov. 2, 2009 5,801 8,536 $ -- $ (1)
European Monetary Unit U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
Nov. 2, 2009 120,626 117,422 -- (158)
Swiss Franc U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
Nov. 2, 2009 12,062 7,360 16 --
U.S. Dollar British Pound
-------------------------------------------------------------------------------------------------------------------------------
Nov. 2, 2009 85,312 58,005 42 --
U.S. Dollar European Monetary Unit
-------------------------------------------------------------------------------------------------------------------------------
Nov. 2, 2009 24,262 16,479 -- (13)
U.S. Dollar European Monetary Unit
-------------------------------------------------------------------------------------------------------------------------------
Nov. 2, 2009 87,016 7,924,768 1,028 --
U.S. Dollar Japanese Yen
-------------------------------------------------------------------------------------------------------------------------------
Nov. 3, 2009 19,415 32,155 293 --
British Pound U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
Nov. 3, 2009 2,930 4,350 38 --
European Monetary Unit U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
Nov. 3, 2009 112,009 75,428 -- (1,017)
U.S. Dollar European Monetary Unit
-------------------------------------------------------------------------------------------------------------------------------
Nov. 3, 2009 4,034 4,102 -- (36)
U.S. Dollar Swiss Franc
-------------------------------------------------------------------------------------------------------------------------------
Nov. 4, 2009 37,873 62,270 117 --
British Pound U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
Nov. 4, 2009 44,060 64,958 123 --
European Monetary Unit U.S. Dollar
-------------------------------------------------------------------------------------------------------------------------------
Nov. 4, 2009 4,795 5,243 -- (78)
U.S. Dollar Australian Dollar
-------------------------------------------------------------------------------------------------------------------------------
Nov. 4, 2009 12,318 13,317 -- (21)
U.S. Dollar Canadian Dollar
-------------------------------------------------------------------------------------------------------------------------------
Nov. 4, 2009 41,330 28,061 -- (39)
U.S. Dollar European Monetary Unit
-------------------------------------------------------------------------------------------------------------------------------
Nov. 4, 2009 200,616 18,334,373 3,077 --
U.S. Dollar Japanese Yen
-------------------------------------------------------------------------------------------------------------------------------
Nov. 4, 2009 4,006 4,106 -- (3)
U.S. Dollar Swiss Franc
-------------------------------------------------------------------------------------------------------------------------------
Nov. 5, 2009 13,609 14,989 -- (123)
U.S. Dollar Australian Dollar
-------------------------------------------------------------------------------------------------------------------------------
Nov. 5, 2009 120,325 10,916,973 961 --
U.S. Dollar Japanese Yen
-------------------------------------------------------------------------------------------------------------------------------
Total $5,695 $(1,489)
-------------------------------------------------------------------------------------------------------------------------------
</Table>
82
<Table>
<Caption>
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
---------------------------------------------------------------------------------------------------------------------------
Nov. 2, 2009 82,503 80,343 $ -- $ (77)
Swiss Franc U.S. Dollar
---------------------------------------------------------------------------------------------------------------------------
Nov. 2, 2009 114,551 69,757 -- (75)
U.S. Dollar British Pound
---------------------------------------------------------------------------------------------------------------------------
Nov. 2, 2009 29,826 41,802 6 --
U.S. Dollar Singapore Dollar
---------------------------------------------------------------------------------------------------------------------------
Nov. 3, 2009 142,542 101,844 120 --
Singapore Dollar U.S. Dollar
---------------------------------------------------------------------------------------------------------------------------
Nov. 4, 2009 7,481,678 82,471 -- (649)
Japanese Yen U.S. Dollar
---------------------------------------------------------------------------------------------------------------------------
Nov. 5, 2009 184,477 168,734 2,760 --
Australian Dollar U.S. Dollar
---------------------------------------------------------------------------------------------------------------------------
Nov. 12, 2009 8,497 7,962 115 --
Canadian Dollar U.S. Dollar
---------------------------------------------------------------------------------------------------------------------------
Total $3,001 $ (801)
---------------------------------------------------------------------------------------------------------------------------
Pro forma Combined Total $8,696 $(2,290)
---------------------------------------------------------------------------------------------------------------------------
</Table>
NOTES TO COMBINED PORTFOLIO OF INVESTMENTS
(a) Securities are valued by policies described in Note 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 Oct. 31, 2009, security was partially or fully on loan. See Note 7 to the
financial statements in the annual report.
(g) Identifies issues considered to be illiquid as to their marketability (see
Note 2 to the financial statements in the annual report). The aggregate
value of such securities at Oct. 31, 2009, was $793,282, representing 0.6%
of net assets. Information concerning such security holdings at Oct. 31,
2009, is as follows:
<Table>
<Caption>
SECURITY ACQUISITION DATES COST
------------------------------------------------------------------------------------------------------
Grubb & Ellis 10-23-09 $ 220,000
IJM
Warrants 09-29-09 562
Infinity Bio-Energy 05-16-06 thru 05-14-07 1,537,569
Oilsands Quest
Warrants 12-04-07 thru 05-01-09 --
Peace Mark Holdings 06-04-08 102,024
Rentech
Warrants 04-20-07 --
Scorpio Mining
7.00% Cv 2011 05-02-08 233,886
Titanium Asset Management 06-13-07 570,000
Titanium Asset Management
Warrants 06-13-07 --
Value Creation 08-10-06 thru 04-30-07 591,585
Virgin Media 08-19-09 57,790
</Table>
(h) Affiliated Money Market Fund -- See Note 8 to the financial statements in
the annual report. The rate shown is the seven-day current annualized yield
at Oct. 31, 2009.
(i) Represents a security sold under Rule 144A, which is exempt from
registration under the Securities Act of 1933, as amended. This security may
be determined to be liquid under guidelines established by the Fund's Board
of Directors. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At Oct. 31, 2009,
the value of these securities amounted to $313,358 or 0.2% of net assets.
(j) At Oct. 31, 2009, the cost of securities for federal income tax purposes and
the 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: $63,186,037 $96,288,735 $159,474,772
Unrealized appreciation $ 7,263,994 $ 6,788,854 $ 14,052,848
Unrealized depreciation (2,568,338) (8,721,420) (11,289,758)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation/depreciation $ 4,695,656 $(1,932,566) $ 2,763,090
---------------------------------------------------------------------------------------------------------
</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.
83
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.
84
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
JUNE 30, 2009 (UNAUDITED) FUND FUND ADJUSTMENTS COMBINED
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 $ 1,340,840 $ 946,037 $-- $ 2,286,877
Additional paid-in capital 132,734,322 93,625,638 -- 226,359,960
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
Class A shares 107,976,833 94,603,728 -- 202,580,561
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.
85
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
YEAR ENDED JUNE 30, 2009 (UNAUDITED) FUND FUND ADJUSTMENTS FORMA COMBINED
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.
86
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 fees 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.
87
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>
SHARES OF RIVERSOURCE
GOVERNMENT MONEY MARKET
FUND ISSUED TO SHAREHOLDERS OF RIVERSOURCE GOVERNMENT
RIVERSOURCE TAX-EXEMPT MONEY MARKET FUND TOTAL PRO FORMA
MONEY MARKET FUND SHARES OUTSTANDING SHARES OUTSTANDING
--------------------------------------------------------------------------------------------------------------------------
Class A 94,603,728 107,976,833 202,580,561
--------------------------------------------------------------------------------------------------------------------------
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>
88
COMBINED PORTFOLIO OF INVESTMENTS
RiverSource Government Money Market Fund
JUNE 30, 2009 (UNAUDITED)
(Percentages represent value of investments compared to pro forma combined 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
Federal Home Loan Bank Disc Nts
07/01/09 0.01% $49,300,000 $5,000,000 $54,300,000 $49,300,000 $5,000,000 $54,300,000
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: $74,296,967) $69,296,967 $5,000,000 $74,296,967
-------------------------------------------------------------------------------------------------------------------
<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>
89
<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
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
----------------------------------------------
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
</Table>
90
<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
INDIANA (CONT.)
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
----------------------------------------------
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
</Table>
91
<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
MINNESOTA (CONT.)
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
----------------------------------------------
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
----------------------------------------------
</Table>
92
<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
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
----------------------------------------------
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
-----------------------------------------------------------------------------------------------------------------------
</Table>
93
<Table>
<Caption>
MONEY MARKET FUND (1.3%)
SHARES SHARES SHARES 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
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.
94
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.)
(1)(f) Articles of Amendment reflecting name change for Seligman Cash
Management Fund filed electronically on or about Jan. 8, 2010 as
Exhibit (a)(6) to Registrant's Post-Effective Amendment No. 47 to
Registration Statement No. 2-56805 is incorporated by reference.
(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, dated Nov. 7, 2008, amended
and restated June 15, 2009, between Registrant and RiverSource
Investments, LLC filed electronically on or about Jan.
8, 2010 as Exhibit (d) to Registrant's Post-Effective Amendment No. 47
to Registration Statement No. 2-56805 is incorporated by reference.
(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.
(11) Opinion and consent of counsel as to the legality of the securities
being registered is filed electronically herewith as Exhibit (11).
(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)(a) Consent of Independent Registered Public Accounting Firm (Deloitte &
Touche LLP) is filed electronically herewith as Exhibit (14)(a).
(14)(b) Consent of Independent Registered Public Accounting Firm (Ernst & Young
LLP) is filed electronically herewith as Exhibit (14)(b).
(15) Financial Statements: Not applicable.
(16) Directors/Trustees Power of Attorney to sign this Registration
Statement and its amendments, dated Nov. 11, 2009, filed electronically
on or about Nov. 25, 2009 as Exhibit (16) to Registration Statement No.
333-163371 is incorporated by reference.
(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, 2009, filed electronically on or about Nov. 30,
2009 as Exhibit (p)(3) to RiverSource Tax-Exempt Income Series, Inc.
Post-Effective Amendment No. 51 to Registration Statement No. 2-63552
is incorporated by reference.
(17)(d) Statement of Additional Information, dated Jan. 22, 2010, for
RiverSource Tax-Exempt Money Market Fund is filed electronically
herewith as Exhibit (17)(d).
(17)(e) Prospectus, dated Feb. 29, 2009, for RiverSource Tax-Exempt Money
Market Fund is filed electronically herewith as Exhibit (17)(e).
(17)(f) Prospectus, dated May 1, 2009, for RiverSource Government Money Market
Fund is filed electronically herewith as Exhibit (17)(f).
(17)(g) Statement of Additional Information, dated May 1, 2009, for RiverSource
Government Money Market Fund is filed electronically herewith as
Exhibit (17)(g).
(17)(h) Annual Report for the period ended Dec. 31, 2008 for RiverSource
Tax-Exempt Money Market Fund is filed electronically herewith as
Exhibit (17)(h).
(17)(i) Annual Report for the period ended Dec. 31, 2008 for RiverSource
Government Money Market Fund is filed electronically herewith as
Exhibit (17)(i).
(17)(j) Semiannual Report for the period ended June 30, 2009 for RiverSource
Tax-Exempt Money Market Fund is filed electronically herewith as
Exhibit (17)(k).
(17)(k) Semiannual Report for the period ended June 30, 2009 for RiverSource
Government Money Market Fund is filed electronically herewith as
Exhibit (17)(j).
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 Amendment to the
Registration Statement has been signed on behalf of the Registrant, in the City
of Minneapolis, and State of Minnesota on the 25th day of January, 2010.
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 Amendment to the Registration
Statement has been signed below by the following persons in the capacities
indicated on the 25th day of January, 2010.
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
/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 on or about Nov. 25, 2009 as Exhibit (16), by:
/s/ Scott R. Plummer
------------------------------------
Scott R. Plummer
EXHIBIT INDEX
(11) Opinion and consent of counsel as to the legality of the securities
being registered.
(14)(a) Consent of Independent Registered Public Accounting Firm (Deloitte &
Touche LLP).
(14)(b) Consent of Independent Registered Public Accounting Firm (Ernst & Young
LLP).
(17)(d) Statement of Additional Information, dated Jan. 22, 2010, for
RiverSource Tax-Exempt Money Market Fund.
(17)(e) Prospectus, dated Feb. 29, 2009, for RiverSource Tax-Exempt Money
Market Fund.
(17)(f) Prospectus, dated May 1, 2009, for RiverSource Government Money Market
Fund.
(17)(g) Statement of Additional Information, dated May 1, 2009, for RiverSource
Government Money Market Fund.
(17)(h) Annual Report for the period ended Dec. 31, 2008 for RiverSource
Tax-Exempt Money Market Fund.
(17)(i) Annual Report for the period ended Dec. 31, 2008 for RiverSource
Government Money Market Fund.
(17)(j) Semiannual Report for the period ended June 30, 2009 for RiverSource
Tax-Exempt Money Market Fund.
(17)(k) Semiannual Report for the period ended June 30, 2009 for RiverSource
Government Money Market Fund.