Ex-99.17(i)
Seligman
Cash Management Fund, Inc.
Annual Report
December 31, 2008
A Money Market
Mutual Fund Seeking
to Preserve Capital and
to Maximize Liquidity
and Current Income
(SELIGMAN INVESTMENTS(SM) LOGO)
To The Shareholders
DEAR FELLOW SHAREHOLDERS,
We are very pleased to announce that, with the completion of the acquisition of
J. & W. Seligman & Co. Incorporated by RiverSource Investments, LLC on November
7, 2008, your Fund joined the RiverSource family of funds. Seligman's long
heritage of investing and exceptional wealth of experience is a valuable
addition to RiverSource Funds. Seligman joins RiverSource and Threadneedle in
the comprehensive family of mutual funds we offer investors.
We also welcome John Maher and Leroy Richie, who have served on your Fund's
Board since 2006 and 2000, respectively, to the RiverSource Funds' Board of
Directors. The acquisition of Seligman by RiverSource Investments creates
several new opportunities for us all, including access to talented portfolio
managers and competitive mutual fund solutions to help you reach your investment
goals.
A LOOK BACK
2008 was an unprecedented year in many ways. Investors watched the precipitous
decline in all the major U.S. and international equity indexes as concerns about
the economy gave way to fear and selling of securities. In response to
substantial losses in the markets and weakening economic indicators, the
government stepped in swiftly and aggressively to encourage liquidity and credit
availability in an attempt to make credit markets function. By the end of the
calendar year, these actions still needed time to gain traction in the markets.
During a severe economic environment like the one we are experiencing, it is
essential that investors try not to let short-term losses in the market distract
from a long-term investment plan. Such discipline may be easier said than done
in the presence of negative news in the media. However, the financial choices
you make today -- practicing patience or locking in losses -- influence your
portfolio's performance.
GETTING BACK ON TRACK
Whether you look at the glass half empty or half full, every broad based market
decline creates investment opportunities. The financial markets are expected to
recover, although it is impossible to know when. In the meantime, make sure your
portfolio is positioned to benefit from the next sources of growth.
Market recoveries often occur before the reported end of a recession. If you
wait for validation of economic recovery before reinvesting in the markets, you
may well miss out on market returns associated with the economic rebound.
THIS PAGE IS NOT A PART OF THE ANNUAL REPORT
To The Shareholders
TIME ELAPSED
BETWEEN
BEAR BEAR MARKET
MARKET AND RECESSION RETURNS
RECESSION ENDED END DATES MISSED*
--------------------------- -------------- ------------- -------
August 1929-March 1933 June 1932 9 months 39.21%
August 1957-April 1958 December 1957 4 months 9.94%
December 1969-November 1970 June 1970 5 months 21.81%
November 1973-March 1975 September 1974 6 months 34.47%
July 1981-November 1982 July 1982 4 months 31.72%
July 1990-March 1991 October 1990 5 months 25.33%
----------
* S&P 500(R) Index total returns for the number of months between the
recession and bear market end dates.
Be sure your portfolio is on track today. Talk with your financial professional
about opportunities that have been created in the markets and take advantage of
our solutions and strategies that can help position portfolios for the next
market recovery cycle.
We hope you are as excited by these opportunities as we are. We thank you for
your support and look forward to helping you reach your investment goals.
/s/ Stephen R. Lewis, Jr. /s/ Patrick T. Bannigan
------------------------------ -------------------------------
Stephen R. Lewis, Jr. Patrick T. Bannigan
Chairman of the Boards President, RiverSource Funds
YOU SHOULD CONSIDER THE INVESTMENT OBJECTIVES, RISKS, CHARGES AND EXPENSES OF A
MUTUAL FUND CAREFULLY BEFORE INVESTING. FOR A FREE PROSPECTUS, WHICH CONTAINS
THIS AND OTHER IMPORTANT INFORMATION ABOUT THE FUNDS, CALL (888) 791-3380. READ
THE PROSPECTUS CAREFULLY BEFORE INVESTING.
Asset allocation, diversification, and dollar cost averaging do not assure a
profit or protect against loss and past performance is no guarantee of future
results.
Standard & Poor's 500 Index (S&P 500 Index) is an unmanaged list of common
stocks and is frequently used as a general measure of US market performance.
On November 7, 2008, RiverSource Investments, LLC ("RiverSource Investments")
completed its acquisition of J. & W. Seligman & Co. Incorporated. In addition,
at a special meeting held during the fourth quarter of 2008, the stockholders of
each Fund approved a new investment management services agreement between each
Fund and RiverSource Investments. With the completion of the acquisition and the
approval of these new agreements by the Funds' stockholders, RiverSource
Investments is the new investment manager of the Funds with effect from November
7, 2008.
RiverSource(R), Seligman(R), and Threadneedle(R) mutual funds are part of the
RiverSource family of funds, and are distributed by RiverSource Fund
Distributors, Inc., Member FINRA, and managed by RiverSource Investments, LLC.
Threadneedle mutual funds are subadvised by Threadneedle International Limited.
RiverSource and Threadneedle are part of Ameriprise Financial, Inc. Seligman is
an offering brand of RiverSource Investments.
THIS PAGE IS NOT A PART OF THE ANNUAL REPORT
Table of Contents
Interview with Your Portfolio Manager ..................................... 1
Portfolio Overview ........................................................ 3
Understanding and Comparing Your Fund's Expenses .......................... 4
Portfolio of Investments .................................................. 5
Statement of Assets and Liabilities ....................................... 6
Statement of Operations ................................................... 7
Statements of Changes in Net Assets ....................................... 8
Notes to Financial Statements ............................................. 9
Financial Highlights ...................................................... 17
Report of Independent Registered Public Accounting Firm ................... 21
Matters Relating to the Directors' Consideration of the Approval of the
Investment Management Services Agreement ............................... 22
Proxy Results ............................................................. 27
Directors and Officers .................................................... 28
Additional Fund Information ............................................... 32
Interview With Your Portfolio Manager
Note: In conjunction with the acquisition of the Fund's previous investment
manager by RiverSource Investments, LLC, the Seligman Investment Grade Team is
no longer responsible for the portfolio management of the Fund. The Fund is now
managed by RiverSource Investments.
Q: What economic events and market factors most significantly impacted the
Fund's performance during the year ended December 31, 2008?
A: Dramatic action by the Federal Reserve (the Fed), increasing weakness in
economic growth, the intensifying global financial crisis and the resulting
liquidity freeze had the greatest effect on the Fund's results. These
factors came to an unprecedented confluence during the third quarter of
2008. As financial institutions declared bankruptcy, were forced to merge
or were taken over by the government, solvency concerns were the prominent
factor driving the crisis. In an effort to revive confidence, the Fed and
US Treasury Department, in coordination with global policymakers,
announced a host of programs to help improve liquidity.
Further, as part of a global effort to ease monetary conditions, combat
deterioration in financial market conditions, and mitigate worsening
economic growth prospects, the Fed lowered the targeted federal funds rate
by over 4.00%, bringing the targeted federal funds rate to between 0% and
0.25% in December. Following the downward path of the targeted federal
funds rate, taxable money market yields moved dramatically lower. At the
same time, the taxable money market yield curve actually steepened, meaning
longer-term yields grew increasingly higher than shorter-term yields, as
credit concerns caused investors to favor shorter-dated maturities in an
effort to increase their liquidity profile and further mitigate risk.
Given these volatile conditions, money market investors remained
principally concerned with safety and preserving liquidity throughout the
annual period. Preservation of capital and liquidity management were our
primary areas of focus as well.
Q: What investment strategies and techniques materially impacted the Fund's
results during the year?
A: The Fund's strategy is to maintain a portfolio of very high quality
instruments with short maturities, and as a result, the portfolio was not
exposed to any of the problematic credit issues that continued to dominate
headlines in 2008. Although the taxable money market yield curve steepened
during the annual period overall, volatile market conditions led us to
primarily invest the Fund's assets in high quality securities with short
maturities. In this effort to maximize liquidity and preservation of
capital, the Fund's allocation to US government and government agency
securities was increased from approximately 40% at the beginning of the
period to 100% by year end.
The Fed stated in December that it intends to maintain its current monetary
policy for some time, as weak economic conditions are likely to warrant
exceptionally low levels of the targeted federal funds rate. Among these
weak economic conditions that the Fed must consider over the coming months
include unemployment rates heading north of 7%, consumers likely to be
increasing their savings at the expense
1
Interview With Your Portfolio Manager
of spending, and the fact that the credit crisis has resulted in a
recession that will likely continue through much of 2009.
We intend to continue to evaluate credits and make strategic decisions to
balance an enhanced liquidity profile with providing current income. At the
same time, given the US government's focus on building liquidity,
expectations for sustained low interest rates, and other supply/demand
market conditions, we intend to look for opportunities to lengthen the
Fund's average weighted days to maturity through the purchase of highly
rated fixed-rate securities in order to lock in the higher yields of an
upward sloping yield curve. We will, of course, continue to closely monitor
economic data, Fed policy and any shifts in the money market yield curve,
striving to strategically adjust the portfolio accordingly. We intend to
continue to focus on high-quality investments with minimal credit risk
while seeking competitive yields.
----------
The views and opinions expressed are those of the Portfolio Manager, are
provided for general information only, and do not constitute specific tax,
legal, or investment advice to, or recommendations for, any person. There can be
no guarantee as to the accuracy of market forecasts. Opinions, estimates, and
forecasts may be changed without notice.
2
Portfolio Overview
DIVERSIFICATION OF NET ASSETS
December 31, 2008
PERCENT OF
NET ASSETS
DECEMBER 31,
------------
VALUE 2008 2007
------------ ----- -----
US Government and Government Agency Securities $173,131,218 100.3 39.1
Time Deposits -- -- 40.8
Repurchase Agreement -- -- 20.3
Other Assets Less Liabilities (559,868) (0.3) (0.2)
------------ ----- -----
NET ASSETS $172,571,350 100.0 100.0
============ ===== =====
3
Understanding and Comparing Your Fund's Expenses
As a shareholder of the Fund, you incur ongoing expenses, such as management
fees, distribution and service (12b-1) fees (if applicable), and other Fund
expenses. The information below is intended to help you understand your ongoing
expenses (in dollars) of investing in the Fund and to compare them with the
ongoing expenses of investing in other mutual funds. Please note that the
expenses shown in the table are meant to highlight your ongoing expenses only
and do not reflect any transactional costs, such as sales charges (also known as
loads) on certain purchases or redemptions. Therefore, the table is useful in
comparing ongoing expenses only, and will not help you to determine the relative
total expenses of owning different funds. In addition, if transactional costs
were included, your total expenses would have been higher.
The table is based on an investment of $1,000 invested at the beginning of July
1, 2008 and held for the entire six-month period ended December 31, 2008.
ACTUAL EXPENSES
The table below provides information about actual expenses and actual account
values. You may use the information, together with the amount you invested, to
estimate the expenses that you paid over the period. Simply divide your account
value at the beginning of the period by $1,000 (for example, an $8,600 account
value divided by $1,000 = 8.6), then multiply the result by the number under the
heading entitled "Expenses Paid During Period" for the Fund's share class that
you own to estimate the expenses that you paid on your account during the
period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The table below also provides information about hypothetical expenses and
hypothetical account values based on the actual expense ratio of each class and
an assumed rate of return of 5% per year before expenses, which is not the
actual return of any class of the Fund. The hypothetical expenses and account
values may not be used to estimate the ending account value or the actual
expenses you paid for the period. You may use this information to compare the
ongoing expenses of investing in the Fund and other mutual funds. To do so,
compare this 5% hypothetical example with the 5% hypothetical examples that
appear in the shareholder reports of the other mutual funds.
ACTUAL HYPOTHETICAL
------------------------ ------------------------
BEGINNING ENDING EXPENSES PAID ENDING EXPENSES PAID
ACCOUNT ANNUALIZED ACCOUNT DURING PERIOD ACCOUNT DURING PERIOD
VALUE EXPENSE VALUE 7/1/08 TO VALUE 7/1/08 TO
7/1/08 RATIO* 12/31/08 12/31/08** 12/31/08 12/31/08**
--------- ---------- --------- ------------- --------- -------------
Class A $1,000.00 0.69% $1,003.00 $3.43 $1,021.67 $3.46
Class B 1,000.00 1.21 1,000.20 6.00 1,019.05 6.06
Class C 1,000.00 1.21 1,000.20 6.00 1,019.05 6.06
Class C2 1,000.00 1.24 1,000.50 6.15 1,018.90 6.21
Class I 1,000.00 0.49 1,003.80 2.43 1,022.67 2.46
Class R 1,000.00 0.98 1,002.30 4.87 1,020.21 4.91
----------
* Expenses of Class B, Class C (formerly Class D prior to May 17, 2008),
Class C2 (formerly Class C prior to May 17, 2008), Class I and Class R
shares differ from the expenses of Class A shares due to the differences in
12b-1 fees and other class-specific expenses paid by each share class. See
the Fund's prospectuses for a description of each share class and its fees,
expenses and sales charges. From July 1, 2008 to December 31, 2008, the
Fund was reimbursed for certain class-specific expenses of all classes of
shares in order for these classes to declare dividends equal to an annual
rate of 0.25% for Classes A and I and 0.01% for Classes B, C, C2 and R.
Absent such reimbursements, the expense ratios and expenses paid for the
period would have been higher.
** Expenses are equal to the annualized expense ratio based on actual expenses
for the period July 1, 2008 to December 31, 2008, multiplied by the average
account value over the period, multiplied by 184/366 (number of days in the
period).
4
Portfolio of Investments
December 31, 2008
ANNUALIZED
YIELD ON PRINCIPAL
PURCHASE DATE AMOUNT VALUE
------------- --------- ------------
US GOVERNMENT AND GOVERNMENT AGENCY
SECURITIES 100.3%
US Treasury Bills, 1.799%, 2/19/2009 1.91% $10,000,000 $ 9,976,045
US Treasury Notes:
4.5%, due 2/15/2009 2.12 2,500,000 2,507,464
2.08%, due 4/15/2009 2.02 5,000,000 5,014,657
4.5%, due 4/30/2009 2.15 30,000,000 30,235,617
Federal Home Loan Bank:@
0.01%, 1/2/2009 0.02 63,300,000 63,299,998
0.01%, 1/30/2009 0.04 49,900,000 49,899,799
0.01%, 2/11/2009 0.15 12,200,000 12,197,638
------------
TOTAL INVESTMENTS 100.3% (Cost $173,131,218) 173,131,218
------------
OTHER ASSETS LESS LIABILITIES (0.3)% (559,868)
------------
NET ASSETS 100.0% $172,571,350
============
----------
@@ Securities issued by these agencies are neither guaranteed nor issued by
the United States Government. See Notes to Financial Statements.
5
Statement of Assets and Liabilities
December 31, 2008
ASSETS:
Investments, at value
US Government and Government Agency securities (cost $173,131,218) $173,131,218
------------
Cash (including restricted cash of $37,555) 66,320
Receivable for Capital Stock sold 990,447
Interest receivable 307,191
Receivable from Manager (Note 4) 147,826
Investment in, and expenses prepaid to, shareholder service agent 18,527
Other 39,881
------------
TOTAL ASSETS 174,701,410
------------
LIABILITIES:
Payable for Capital Stock repurchased 1,933,156
Management fee payable 72,620
Dividends payable 26,532
Distribution and service (12b-1) fees payable 22,710
Accrued expenses and other 75,042
------------
TOTAL LIABILITIES 2,130,060
NET ASSETS $172,571,350
============
COMPOSITION OF NET ASSETS:
Shares of Capital Stock, at par ($0.01 par value; 1,400,000,000 shares
authorized; 172,580,181 shares outstanding)
Class A $ 1,241,354
Class B 69,385
Class C 165,703
Class C2 28,518
Class I 204,385
Class R 16,457
Additional paid-in capital 170,845,548
NET ASSETS $172,571,350
============
NET ASSET VALUE PER SHARE:
CLASS A ($124,124,492 / 124,135,392 shares) $ 1.00
CLASS B ($6,940,695 / 6,938,475 shares) $ 1.00
CLASS C ($16,570,962 / 16,570,348 shares) $ 1.00
CLASS C2 ($2,851,348 / 2,851,803 shares) $ 1.00
CLASS I ($20,438,193 / 20,438,482 shares) $ 1.00
CLASS R ($1,645,660 / 1,645,681 shares) $ 1.00
----------
See Notes to Financial Statements.
6
Statement of Operations
For the Year Ended December 31, 2008
INVESTMENT INCOME:
INTEREST $3,985,806
----------
EXPENSES:
Management fee 893,335
Shareholder account services 684,551
Distribution and service (12b-1) fees 268,372
Registration 88,506
Custody and related services 73,141
Auditing and legal fees 57,621
Shareholder reports and communications 29,164
Directors' fees and expenses 27,319
Miscellaneous 51,359
----------
TOTAL EXPENSES 2,173,368
----------
Reimbursement from Manager (Note 4) (320,559)
----------
TOTAL EXPENSES AFTER REIMBURSEMENT 1,852,809
----------
NET INVESTMENT INCOME 2,132,997
==========
----------
See Notes to Financial Statements.
7
Statements of Changes in Net Assets
YEAR ENDED DECEMBER 31,
-----------------------------
2008 2007
------------- -------------
OPERATIONS:
Net investment income $ 2,132,997 $ 7,379,554
Net realized gain on investments -- 32,177
------------- -------------
INCREASE IN NET ASSETS FROM OPERATIONS 2,132,997 7,411,731
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income:
Class A (1,810,626) (5,986,951)
Class B (25,501) (249,832)
Class C (45,329) (394,523)
Class C2 (30,337) (135,047)
Class I (213,601) (583,957)
Class R (7,603) (29,244)
------------- -------------
TOTAL (2,132,997) (7,379,554)
------------- -------------
Net realized short-term capital gain on
investments:
Class A (25,685) --
Class B (1,011) --
Class C (2,135) --
Class C2 (849) --
Class I (2,431) --
Class R (114) --
------------- -------------
TOTAL (32,225) --
------------- -------------
DECREASE IN NET ASSETS FROM DISTRIBUTIONS (2,165,222) (7,379,554)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Net proceeds from sales of shares 326,908,968 283,500,033
Investment of dividends 2,158,534 7,127,126
Exchanged from associated funds 70,702,850 57,066,271
Investment of gain distributions 31,559 --
------------- -------------
Total 399,801,911 347,693,430
------------- -------------
Cost of shares repurchased (375,108,551) (301,506,326)
Exchanged into associated funds (25,191,078) (34,720,562)
------------- -------------
Total (400,299,629) (336,226,888)
------------- -------------
INCREASE (DECREASE) IN NET ASSETS FROM
CAPITAL SHARE TRANSACTIONS (497,718) 11,466,542
------------- -------------
INCREASE (DECREASE) IN NET ASSETS (529,943) 11,498,719
------------- -------------
NET ASSETS:
Beginning of year 173,101,293 161,602,574
------------- -------------
END OF YEAR $ 172,571,350 $ 173,101,293
============= =============
----------
See Notes to Financial Statements.
8
Notes to Financial Statements
1. ORGANIZATION AND MULTIPLE CLASSES OF SHARES -- Seligman Cash Management
Fund, Inc. (the "Fund") is registered with the Securities and Exchange
Commission (the "SEC") under the Investment Company Act of 1940, as amended
(the "1940 Act"), as an open-end diversified management investment company.
The Fund has the following six classes of shares outstanding, five of which
are currently offered and may be acquired by investors at net asset value:
Class A shares are generally issued without any sales charges. Class A
shares acquired by an exchange from another Seligman investment company
originally purchased in an amount of $1,000,000 or more without an initial
sales charge are subject to a contingent deferred sales charge ("CDSC") of
1% if redeemed within 18 months of original purchase.
Class B shares are subject to a distribution fee of 0.75% and a service fee
of up to 0.25% on an annual basis, and a CDSC, if applicable, of 5% on
redemptions in the first year of purchase, declining to 1% in the sixth
year and 0% thereafter. Class B shares will automatically convert to Class
A shares approximately eight years after their date of purchase. If Class B
shares of the Fund are exchanged for Class B shares of another Seligman
mutual fund, the holding period of the shares exchanged will be added to
the holding period of the shares acquired, both for determining the
applicable CDSC and the conversion of Class B shares to Class A shares.
The Board of Directors of the Fund approved the renaming of all of the
Fund's outstanding Class C shares to Class C2 shares, and then Class D
shares to Class C shares. The renamings were implemented on May 16, 2008.
Effective at the close of business on May 16, 2008, the Fund does not offer
Class C2 and Class D shares. The renaming did not affect individual
shareholder account values.
Class C and Class C2 shares are subject to a distribution fee of up to
0.75% and a service fee of up to 0.25% on an annual basis. Class C shares
and Class C2 shares acquired by an exchange from another Seligman mutual
fund are subject to a CDSC, if applicable, of 1% imposed on redemptions
made within one year of purchase.
All of the Fund's outstanding Class C2 shares will be converted to Class A
shares on or about March 27, 2009 at their relative net asset values. The
conversion is not expected to affect individual shareholder account values.
Class I shares are offered to certain institutional clients and other
investors, as described in the Fund's Class I shares prospectus. Class I
shares are sold without any sales charges and are not subject to
distribution or service (12b-1) fees.
Class R shares are offered to certain employee benefit plans and are not
available to all investors. They are subject to a distribution fee of up to
0.25% and a service fee of up to 0.25% on an annual basis, and a CDSC, if
applicable, of 1% on certain redemptions made within one year of a plan's
initial purchase of Class R shares.
All classes of shares represent interests in the same portfolio of
investments, have the same rights, and are generally identical in all
respects except that each class bears its own class-specific expenses, and
has exclusive voting rights with respect to any matter on which a separate
vote of any class is required.
2. SIGNIFICANT ACCOUNTING POLICIES -- The financial statements have been
prepared in conformity with accounting principles generally accepted in the
United States of America, which require management to make certain
estimates and assumptions at the date of the financial statements. Actual
results may differ from these estimates. The following summarizes the
significant accounting policies of the Fund:
9
Notes to Financial Statements
A. SECURITY VALUATION -- The Fund uses the amortized cost method for
valuing its short-term securities in accordance with Rule 2a-7 under
the 1940 Act. Under this method, all investments purchased at a
discount or premium are valued by amortizing the difference between
the original purchase price and the maturity value of the issue over
the period to maturity.
On January 1, 2008, the Fund adopted Statement of Financial Accounting
Standards No. 157 ("SFAS 157"), "Fair Value Measurements." SFAS 157
establishes a three-tier hierarchy to classify the assumptions,
referred to as inputs, used in valuation techniques (as described
above) to measure fair value of the Fund's investments. These inputs
are summarized in three broad levels: Level 1 -- quoted prices in
active markets for identical investments; Level 2 -- other significant
observable inputs (including quoted prices in inactive markets or for
similar investments); and Level 3 -- significant unobservable inputs
(including the Fund's own assumptions in determining fair value) (Note
3). Observable inputs are those based on market data obtained from
sources independent of the Fund, and unobservable inputs reflect the
Fund's own assumptions based on the best information available. The
inputs or methodology used for valuing securities may not be an
indication of the risk associated with investing in those securities.
B. RESTRICTED CASH -- Restricted cash represents deposits that are being
held by banks as collateral for letters of credit issued in connection
with the Fund's insurance policies.
C. MULTIPLE CLASS ALLOCATIONS -- All income, expenses (other than
class-specific expenses), and realized and unrealized gains or losses,
if any, are allocated daily to each class of shares based upon the
relative value of shares of each class. Class-specific expenses, which
include distribution and service (12b-1) fees and any other items that
are specifically attributable to a particular class, are charged
directly to such class. For the year ended December 31, 2008,
distribution and service (12b-1) fees, shareholder account services
and registration expenses were class-specific expenses.
D. SECURITY TRANSACTIONS AND RELATED INVESTMENT INCOME -- Investment
transactions are recorded on trade dates. Identified cost of
investments sold is used for both financial reporting and federal
income tax purposes. The cost of investments for federal income tax
purposes is substantially the same as the cost for financial reporting
purposes. Interest income, including the amortization of discount or
premium, is recorded on an accrual basis.
E. DISTRIBUTIONS TO SHAREHOLDERS -- Dividends are declared daily and paid
monthly. Net realized gains, if any, are paid annually and are
recorded on the ex-dividend dates. For the years ended December 31,
2008 and 2007, all distributions to shareholders were ordinary income
for tax purposes.
F. TAXES -- There is no provision for federal income tax. The Fund has
elected to be taxed as a regulated investment company and intends to
distribute substantially all taxable net income and net gain realized.
Financial Accounting Standards Board ("FASB") Interpretation No. 48
("FIN 48"), "Accounting for Uncertainty in Income Taxes -- an
interpretation of FASB Statement No. 109," requires the Fund to
measure and recognize in its financial statements the benefit of a tax
position taken (or expected to be taken) on an income tax return if
such position will more likely than not be sustained upon examination
based on the technical merits of the position. The Fund files income
tax returns in the US Federal jurisdiction, as well as the New York
State and New York City jurisdictions. Based upon its review of tax
positions for the Fund's open tax years of 2005-2008 in these
jurisdictions, the Fund has determined that FIN 48 did not have a
material impact on the Fund's financial statements for the year ended
December 31, 2008.
For federal income tax purposes, as of December 31, 2008, the Fund had
undistributed ordinary income of $14,776.
10
Notes to Financial Statements
3. FAIR VALUE MEASUREMENTS -- A summary of the value of the Fund's investments
as of December 31, 2008, based on the level of inputs used in accordance
with SFAS 157 (Note 2a), is as follows:
VALUATION INPUTS VALUE
---------------- ------------
Level 1 - Quoted Prices in Active Markets for Identical
Investments $ --
Level 2 - Other Significant Observable Inputs 173,131,218
Level 3 - Significant Unobservable Inputs --
------------
Total $173,131,218
============
4. MANAGEMENT AND DISTRIBUTION SERVICES, AND OTHER TRANSACTIONS --
A. MANAGEMENT AND ADMINISTRATIVE SERVICES -- On November 7, 2008,
RiverSource, investment manager to the RiverSource complex of funds,
and a wholly owned subsidiary of Ameriprise Financial, Inc.
("Ameriprise"), announced the closing of its acquisition (the
"Acquisition") of J. & W. Seligman & Co. Incorporated ("JWS"). With
the Acquisition completed and shareholders of the Fund having
previously approved (at a Special Meeting held earlier in November
2008) a new investment management services agreement between the
RiverSource and the Fund, RiverSource is the new investment manager of
the Fund effective November 7, 2008.
The Manager receives a fee (and, prior to November 7, 2008, JWS
received a fee), calculated daily and paid monthly, equal to a per
annum percentage of the Fund's average daily net assets. Effective
November 7, 2008, the management fee rate is equal to 0.40% per annum
of the Fund's average daily net assets. Prior to November 7, 2008, the
management fee rate was calculated on a sliding scale of 0.45% to
0.375% based on average daily net assets of all the investment
companies managed by JWS. The management fee for the year ended
December 31, 2008, was equivalent to an annual rate of 0.42% of the
Fund's average daily net assets. RiverSource received $133,062 of such
fee and the balance was paid to JWS. From time to time, the Manager
(and previously JWS) has agreed to reimburse a portion of the
class-specific expenses of certain share classes to declare dividends
equal to selected minimum annual rates. For the period March 25, 2008
to December 31, 2008, the minimum annual dividend rate was 0.01% for
Class B, Class C, Class C2 and Class R shares, and 0.25% for Class A
and Class I shares. As a result, for the year ended December 31, 2008,
the Manager and JWS reimbursed $238,374 and $82,185, respectively, for
all classes of shares.
Under an Administrative Services Agreement, effective November 7,
2008, Ameriprise administers certain aspects of the Fund's business
and other affairs at no cost. Ameriprise provides the Fund with office
space, and certain administrative and other services and executive and
other personnel as are necessary for Fund operations. Ameriprise pays
all of the compensation of Board members of the Fund who are employees
or consultants of RiverSource and of the officers and other personnel
of the Fund. Ameriprise reserves the right to seek Board approval to
increase the fees payable by the Fund under the Administrative
Services Agreement. However, Ameriprise anticipates that any such
increase in fees would be offset by corresponding decreases in
advisory fees under the Investment Management Services Agreement. If
an increase in fees under the Administrative Services Agreement would
not be offset by corresponding decreases in advisory fees, the Fund
will inform shareholders prior to the effectiveness of such increase.
Prior to November 7, 2008, administrative services were provided to
the Fund by JWS as part of its former management agreement with the
Fund.
B. DISTRIBUTION SERVICES -- The Fund has an Administration, Shareholder
Services and Distribution Plan (the "Plan") with respect to
distribution of its shares. Under the Plan, with respect to Class A
shares, service organizations can enter into agreements with
RiverSource Fund Distributors, Inc. (formerly Seligman Advisors, Inc.)
(the "Distributor") and receive a continuing fee of up to 0.25% on an
11
Notes to Financial Statements
annual basis of the average daily net assets of Class A shares,
attributable to the particular service organizations for providing
personal services and/or the maintenance of shareholder accounts. The
Distributor, and likewise the Fund, did not make payments under the
Plan with respect to Class A shares during the year ended December 31,
2008.
Under the Plan, with respect to Class B shares, Class C shares
(formerly Class D shares prior to May 17, 2008), Class C2 shares
(formerly Class C shares prior to May 17, 2008) issued in exchange
from another Seligman mutual fund, and Class R shares, service
organizations can enter into agreements with the Distributor and
receive a continuing fee for providing personal services and/or the
maintenance of shareholder accounts of up to 0.25% on an annual basis
of the average daily net assets of the Class B, Class C, Class C2, and
Class R shares for which the organizations are responsible; and, for
Class C, Class C2, and Class R shares, fees for providing other
distribution assistance of up to 0.75% (0.25%, in the case of Class R
shares) on an annual basis of such average daily net assets. Such fees
are paid monthly by the Fund to the Distributor pursuant to the Plan.
For the year ended December 31, 2008, fees incurred under the Plan,
equivalent to 1%, 1%, 0.82% and 0.25% per annum of the average daily
net assets of Class B shares, Class C shares, Class C2 shares, and
Class R shares, respectively, amounted to $73,616, $145,419, $46,038
and $3,299, respectively.
The Distributor and RiverSource Services, Inc. (formerly Seligman
Services, Inc.), each an affiliate of the Manager, are eligible to
receive distribution and service (12b-1) fees pursuant to the Plan.
For the year ended December 31, 2008, the Distributor and Seligman
Services, Inc. received distribution and service (12b-1) fees of
$9,445.
The Distributor is entitled to retain any CDSC imposed on certain
redemptions of Class A, Class C, Class C2, and Class R shares. For the
year ended December 31, 2008, such charges amounted to $16,471. The
Distributor has sold its rights to third parties to collect any CDSC
imposed on redemptions of Class B shares.
C. TRANSFER AGENT AND SHAREHOLDER SERVICES -- For the year ended December
31, 2008, Seligman Data Corp., owned by the Fund and certain
associated investment companies, charged the Fund at cost $684,551 for
shareholder account services in accordance with a methodology approved
by the Fund's directors. Class I shares receive more limited
shareholder services than the Fund's other classes of shares (the
"Retail Classes"). Seligman Data Corp. does not allocate to Class I
the costs of any of its departments that do not provide services to
the Class I shareholders.
Costs of Seligman Data Corp. directly attributable to the Retail
Classes of the Fund were charged to those classes in proportion to
their relative net asset values. Costs directly attributable to Class
I shares were charged to Class I. The remaining charges were allocated
to the Retail Classes and Class I by Seligman Data Corp. pursuant to a
formula based on their net assets, shareholder transaction volumes and
number of shareholder accounts.
The Fund and certain other associated investment companies (together,
the "Guarantors") have severally but not jointly guaranteed the
performance and observance of all the terms and conditions of a lease
entered into by Seligman Data Corp., including the payment of rent by
Seligman Data Corp. (the "Guaranty"). The lease and the related
Guaranty expire in January 2019. The obligation of the Fund to pay any
amount due under the Guaranty is limited to a specified percentage of
the full amount, which generally is based on the Fund's percentage of
the expenses billed by Seligman Data Corp. to all Guarantors in the
most recent calendar quarter. As of December 31, 2008, the Fund's
potential obligation under the Guaranty is $349,700. As of December
31, 2008, no event has occurred which would result in the Fund
becoming liable to make any payment under the Guaranty. A portion of
the rent paid by Seligman Data Corp. is charged to the Fund as part of
Seligman Data Corp.'s shareholder account services cost.
12
Notes to Financial Statements
At December 31, 2008, the Fund's investment in Seligman Data Corp. is
recorded at a cost of $3,719.
The Fund's Board has approved RiverSource Service Corporation ("RSC")
as the Fund's new transfer and shareholder service agent, and the
termination of the Fund's relationship with Seligman Data Corp.,
effective on or about May 9, 2009. RSC is an affiliate of RiverSource.
The fees and expenses expected to be charged to the Fund by RSC are
generally lower than the fees and expenses charged by Seligman Data
Corp. Nevertheless, as a result of the termination of the relationship
with Seligman Data Corp., the Fund will incur certain non-recurring
charges, including charges relating to Seligman Data Corp.'s leases,
that would in the aggregate approximate 0.16% of the Fund's net assets
as of January 23, 2009 (the "Non-Recurring Charges"). These
Non-Recurring Charges will be incurred over a period of several months
beginning January 28, 2009. Fund shareholders would bear their
proportionate share of the Fund's expenses, including the
Non-Recurring Charges.
D. DIRECTORS' FEES AND EXPENSES -- Directors' fees and expenses includes
the compensation of Board members who are not employees of RiverSource
and the Fund's proportionate share of certain expenses of a company
providing limited administrative services to the Fund and the other
Seligman and RiverSource Funds. These expenses include boardroom and
office expense, employee compensation, employee health and retirement
benefits and certain other expenses. For the period from November 7,
2008 through December 31, 2008, the Fund paid $214 to this company for
such services.
The Fund has a compensation arrangement under which directors who
receive fees may elect to defer receiving such fees. Directors may
elect to have their deferred fees accrue interest or earn a return
based on the performance of the Fund or other funds in the Seligman
Group of Investment Companies. The cost of such fees and earnings/loss
accrued thereon is included in directors' fees and expenses and the
accumulated balance thereof at December 31, 2008 of $2,695 is included
in accrued expenses and other liabilities. Deferred fees and related
accrued earnings are not deductible by the Fund for federal income tax
purposes until such amounts are paid.
Certain officers and directors of the Fund are officers or directors
of the Manager, Ameriprise, the Distributor, RiverSource Services,
Inc., RSC, and/or Seligman Data Corp.
13
Notes to Financial Statements
5. CAPITAL SHARE TRANSACTIONS -- Transactions in shares of Capital Stock, each
at a value of $1.00 per share, were as follows:
YEAR ENDED DECEMBER 31,
---------------------------
2008 2007
------------ ------------
CLASS A
Sales of shares 292,772,623 266,471,087
Investment of dividends 1,821,724 5,802,677
Exchanged from associated funds 46,854,491 37,488,483
Investment of gain distributions 25,208 --
Converted from Class B* 1,882,161 1,328,267
------------ ------------
Total 343,356,207 311,090,514
------------ ------------
Shares repurchased (335,597,683) (279,362,022)
Exchanged into associated funds (16,531,904) (23,052,704)
------------ ------------
Total (352,129,587) (302,414,726)
------------ ------------
Increase (decrease) (8,773,380) 8,675,788
============ ============
CLASS B
Sales of shares 209,668 294,554
Investment of dividends 27,071 218,629
Exchanged from associated funds 6,460,062 8,180,622
Investment of gain distributions 923 --
------------ ------------
Total 6,697,724 8,693,805
------------ ------------
Shares repurchased (2,823,973) (3,817,233)
Exchanged into associated funds (2,507,748) (4,951,926)
Converted to Class A* (1,882,113) (1,327,981)
------------ ------------
Total (7,213,834) (10,097,140)
------------ ------------
Decrease (516,110) (1,403,335)
============ ============
CLASS C (FORMERLY CLASS D PRIOR TO MAY 17, 2008)
Sales of shares 5,872,693 4,705,646
Investment of dividends 49,352 374,084
Exchanged from associated funds 11,334,684 6,002,753
Investment of gain distributions 2,076 --
------------ ------------
Total 17,258,805 11,082,483
------------ ------------
Shares repurchased (11,216,612) (7,165,040)
Exchanged into associated funds (3,112,257) (3,124,387)
------------ ------------
Total (14,328,869) (10,289,427)
------------ ------------
Increase 2,929,936 793,056
============ ============
----------
* Automatic conversion of Class B shares to Class A shares approximately
eight years after the initial purchase date. The amount of dividends
accrued on Class B shares between the last dividend payment date and the
conversion date is invested in Class A shares and is included in the
conversion from Class B amount.
14
Notes to Financial Statements
YEAR ENDED DECEMBER 31,
------------------------
CLASS C2 (FORMERLY CLASS C PRIOR TO MAY 17, 2008) 2008 2007
------------------------------------------------- ----------- ----------
Sales of shares 314,004 768,447
Investment of dividends 29,889 122,569
Exchanged from associated funds 5,970,365 5,394,413
Investment of gain distributions 807 --
----------- ----------
Total 6,315,065 6,285,429
----------- ----------
Shares repurchased (4,443,980) (2,312,003)
Exchanged into associated funds (3,030,277) (3,591,545)
----------- ----------
Total (7,474,257) (5,903,548)
----------- ----------
Increase (decrease) (1,159,192) 381,881
=========== ==========
CLASS I
Sales of shares 21,128,370 8,297,974
Investment of dividends 222,142 581,898
Investment of gain distributions 2,431 --
----------- ----------
Total 21,352,943 8,879,872
----------- ----------
Shares repurchased (15,423,295) (5,928,933)
----------- ----------
Increase 5,929,648 2,950,939
=========== ==========
CLASS R
Sales of shares 6,612,123 2,962,036
Investment of dividends 8,356 27,269
Exchanged from associated funds 83,248 --
Investment of gain distributions 114 --
----------- ----------
Total 6,703,841 2,989,305
----------- ----------
Cost of shares repurchased (5,603,008) (2,921,095)
Exchanged into associated funds (8,892) --
----------- ----------
Shares repurchased (5,611,900) (2,921,095)
----------- ----------
Increase 1,091,941 68,210
=========== ==========
6. OTHER MATTERS -- In late 2003, JWS conducted an extensive internal review
concerning mutual fund trading practices. JWS's review, which covered the
period 2001-2003, noted one arrangement that permitted frequent trading in
certain open-end registered investment companies then managed by JWS (the
"Seligman Funds"); this arrangement was in the process of being closed down
by JWS before September 2003. JWS identified three other arrangements that
permitted frequent trading, all of which had been terminated by September
2002. In January 2004, JWS, on a voluntary basis, publicly disclosed these
four arrangements to its clients and to shareholders of the Seligman Funds.
JWS also provided information concerning mutual fund trading practices to
the SEC and the Office of the Attorney General of the State of New York
("NYAG").
In September 2005, the New York staff of the SEC indicated that it was
considering recommending to the Commissioners of the SEC the instituting of
a formal action against JWS and the Distributor relating to frequent
trading in the Seligman Funds. JWS responded to the staff in October 2005
that it believed that any action would be both inappropriate and
unnecessary, especially in light of the fact that JWS had previously
resolved the underlying issue with the Independent Directors of the
Seligman Funds and made recompense to the affected Seligman Funds.
15
Notes to Financial Statements
In September 2006, the NYAG commenced a civil action in New York State
Supreme Court against JWS, the Distributor, Seligman Data Corp. and Brian
T. Zino (collectively, the "Seligman Parties"), alleging, in substance,
that, in addition to the four arrangements noted above, the Seligman
Parties permitted other persons to engage in frequent trading and, as a
result, the prospectus disclosure used by the registered investment
companies then managed by JWS is and has been misleading. The NYAG included
other related claims and also claimed that the fees charged by JWS to the
Seligman Funds were excessive. The NYAG is seeking damages of at least $80
million and restitution, disgorgement, penalties and costs and injunctive
relief. The Seligman Parties answered the complaint in December 2006 and
believe that the claims are without merit.
Any resolution of these matters may include the relief noted above or other
sanctions or changes in procedures. Any damages would be paid by JWS and
not by the Seligman Funds. If the NYAG obtains injunctive relief, each of
JWS, RiverSource Investments, LLC ("RiverSource") and their affiliates
could, in the absence of the SEC in its discretion granting exemptive
relief, be enjoined from providing advisory and underwriting services to
the Seligman Funds and other registered investment companies, including
those funds in the RiverSource complex.
Neither JWS nor RiverSource believes that the foregoing legal action or
other possible actions will have a material adverse impact on JWS,
RiverSource or their current and former clients, including the Seligman
Funds and other investment companies managed by RiverSource; however, there
can be no assurance of this or that these matters and any related publicity
will not affect demand for shares of the Seligman Funds and such other
investment companies or have other adverse consequences.
7. TEMPORARY MONEY MARKET FUND GUARANTEE PROGRAM -- On October 6, 2008, the
Directors approved the participation by the Fund in the U.S. Treasury's
Temporary Guarantee Program for Money Market Funds (the "Program"). Under
this Program, the U.S. Treasury protects the value of Fund shares held by
shareholders as of close of business on September 19, 2008. Any Fund shares
held by investors as of the close of business September 19, 2008 are
insured against loss under the Program in the event the Fund liquidates its
holdings and the per share net value at the time of liquidation is less
than $1.00 per share. Shares acquired by investors after September 19, 2008
generally are not eligible for protection under the Program. The Program
was in effect for an initial three month term, which expired on December
18, 2008, and has since been extended through April 30, 2009. The Fund has
participated in this extension of the Program. The Fund paid fees equal to
0.025% of net assets as of September 18, 2008 to participate in the Program
for the period from October 6, 2008 through April 30, 2009. The fees are
being amortized over the period of the participation in the Program and are
included as a component of other expenses in the Fund's Statement of
Operations. The cost to participate will be borne by the Fund without
regard to any expense limitation currently in effect, if any. The Secretary
of the Treasury has the option to extend the Program up to the close of
business on September 18, 2009. If the Program is further extended, the
Fund will consider whether to continue to participate.
16
Financial Highlights
The tables below are intended to help you understand each Class's financial
performance for the years presented. Certain information reflects financial
results for a single share of a Class that was held throughout the years shown.
Per share amounts are calculated using average shares outstanding during the
year. Total return shows the rate that you would have earned (or lost) on an
investment in each Class, assuming you reinvested all your dividends. Total
returns do not reflect any sales charges or transaction costs on your investment
or taxes investors may incur on distributions or on the redemption of shares.
CLASS A
YEAR ENDED DECEMBER 31,
----------------------------------------------------
2008 2007 2006 2005 2004
-------- -------- -------- -------- --------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
-------- -------- -------- -------- --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.011 0.040 0.039 0.022 0.004
LESS DISTRIBUTIONS:
Dividends from net investment income (0.011)* (0.040) (0.039) (0.022) (0.004)
-------- -------- -------- -------- --------
NET ASSET VALUE, END OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======== ======== ======== ======== ========
TOTAL RETURN 1.12% 4.09% 3.95% 2.20% 0.43%
-------- -------- -------- -------- --------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $124,124 $132,924 $124,223 $132,506 $143,464
Ratio of expenses to average net assets 0.79% 0.86% 0.90% 0.86% 0.84%
Ratio of net investment income to
average net assets 1.07% 4.03% 3.86% 2.15% 0.40%
Without expense reimbursement:+++
Ratio of expenses to average net assets 0.91% 0.85%
Ratio of net investment income to
average net assets 0.95% 0.39%
----------
See footnotes on page 20.
17
Financial Highlights
CLASS B
YEAR ENDED DECEMBER 31,
-----------------------------------------------
2008 2007 2006 2005 2004
------- ------- ------- ------- -------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.003 0.030 0.028 0.011 0.001
LESS DISTRIBUTIONS:
Dividends from net investment income (0.003)* (0.030 (0.028) (0.011) (0.001)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
TOTAL RETURN 0.35% 3.00% 2.85% 1.11% 0.07%
------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $ 6,941 $ 7,458 $ 8,860 $12,961 $21,214
Ratio of expenses to average net assets 1.53% 1.86% 1.89% 1.85% 1.18%
Ratio of net investment income to
average net assets 0.33% 3.03% 2.86% 1.16% 0.07%
Without expense reimbursement:+++
Ratio of expenses to average net assets 1.91% 1.86% 1.85%
Ratio of net investment income (loss)
to average net assets (0.05)% 1.15% (0.60)%
CLASS C (FORMERLY CLASS D PRIOR TO MAY 17, 2008)
YEAR ENDED DECEMBER 31,
-----------------------------------------------
2008 2007 2006 2005 2004
------- ------- ------- ------- -------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.003 0.030 0.028 0.011 0.001
LESS DISTRIBUTIONS:
Dividends from net investment income (0.003)* (0.030) (0.028) (0.011) (0.001)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
TOTAL RETURN 0.35% 3.00% 2.85% 1.11% 0.07%
------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $16,571 $13,643 $12,848 $12,756 $13,574
Ratio of expenses to average net assets 1.53% 1.86% 1.89% 1.85% 1.18%
Ratio of net investment income to
average net assets 0.33% 3.03% 2.86% 1.16% 0.07%
Without expense reimbursement:+++
Ratio of expenses to average net assets 1.91% 1.86% 1.85%
Ratio of net investment income (loss)
to average net assets (0.05)% 1.15% (0.60)%
----------
See footnotes on page 20.
18
Financial Highlights
CLASS C2 (FORMERLY CLASS C PRIOR TO MAY 17, 2008)
YEAR ENDED DECEMBER 31,
-----------------------------------------------
2008 2007 2006 2005 2004
------- ------- ------- ------- -------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.005 0.033 0.032 0.016 0.001
LESS DISTRIBUTIONS:
Dividends from net investment income (0.005)* (0.033) (0.032) (0.016) (0.001)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
TOTAL RETURN 0.49% 3.32% 3.20% 1.56% 0.09%
------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $ 2,851 $ 4,011 $ 3,629 $ 4,248 $ 4,693
Ratio of expenses to average net assets 1.55% 1.60% 1.58% 1.44% 1.16%
Ratio of net investment income to
average net assets 0.31% 3.29% 3.19% 1.56% 0.09%
Without expense reimbursement:+++
Ratio of expenses to average net assets 1.73% 1.57%
Ratio of net investment income (loss)
to average net assets 0.13% (0.32)%
CLASS I
YEAR ENDED DECEMBER 31,
-----------------------------------------------
2008 2007 2006 2005 2004
------- ------- ------- ------- -------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.014 0.043 0.042 0.024 0.007
LESS DISTRIBUTIONS:
Dividends from net investment income (0.014)* (0.043) (0.042) (0.024) (0.007)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
TOTAL RETURN 1.38% 4.36% 4.23% 2.48% 0.69%
------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $20,438 $14,511 $11,558 $13,242 $11,256
Ratio of expenses to average net assets 0.53% 0.59% 0.60% 0.58% 0.57%
Ratio of net investment income to
average net assets 1.33% 4.30% 4.16% 2.43% 0.68%
Without expense reimbursement:+++
Ratio of expenses to average net assets 0.63%
Ratio of net investment income to
average net assets 1.23%
----------
See footnotes on page 20.
19
Financial Highlights
CLASS R
YEAR ENDED DECEMBER 31,
-----------------------------------------------
2008 2007 2006 2005 2004
------- ------- ------- ------- -------
PER SHARE DATA:
NET ASSET VALUE, BEGINNING OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income 0.009 0.038 0.036 0.019 0.002
LESS DISTRIBUTIONS:
Dividends from net investment income (0.009)* (0.038) (0.036) (0.019) (0.002)
------- ------- ------- ------- -------
NET ASSET VALUE, END OF YEAR $ 1.000 $ 1.000 $ 1.000 $ 1.000 $ 1.000
======= ======= ======= ======= =======
TOTAL RETURN 0.93% 3.83% 3.69% 1.94% 0.24%
------- ------- ------- ------- -------
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000s omitted) $ 1,646 $ 554 $ 486 $ 499 $ 2
Ratio of expenses to average net assets 1.01% 1.11% 1.15% 1.11% 1.01%
Ratio of net investment income to
average net assets 0.84% 3.78% 3.61% 1.90% 0.24%
Without expense reimbursement:+++
Ratio of expenses to average net assets 1.16% 1.10%
Ratio of net investment income to
average net assets 0.71% 0.15%
----------
* In addition, the Fund paid a short-term capital gain distribution of
$0.000146 on July 25, 2008.
+++ The Manager, at its discretion, reimbursed certain class-specific expenses
of certain share classes to allow those classes to declare dividends equal
to selected minimum annual rates. Absent such reimbursement, returns would
have been lower.
An investment in the Fund 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.
See Notes to Financial Statements.
20
Report of Independent Registered Public Accounting Firm
THE BOARD OF DIRECTORS AND SHAREHOLDERS OF SELIGMAN CASH MANAGEMENT FUND, INC.:
We have audited the accompanying statement of assets and liabilities of Seligman
Cash Management Fund, Inc. (the "Fund"), including the portfolio of investments,
as of December 31, 2008, and the related statement of operations for the year
then ended, the statements of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the periods
presented. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. The Fund
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Fund's internal control over
financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2008, by correspondence with the
custodian. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Seligman Cash Management Fund, Inc. as of December 31, 2008, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the periods presented, in conformity with accounting principles generally
accepted in the United States of America.
DELOITTE & TOUCHE LLP
New York, New York
February 27, 2009
21
Matters Relating to the Directors' Consideration of the Approval of the
Investment Management Services Agreement
BACKGROUND
On July 7, 2008, RiverSource Investments, LLC ("RiverSource"), a wholly owned
subsidiary of Ameriprise Financial, Inc. ("Ameriprise"), entered into a stock
purchase agreement with the shareholders of J. & W. Seligman & Co. Incorporated
("Seligman") under which RiverSource would acquire all of the outstanding
capital stock of Seligman (the "Transaction"). The consummation of the
Transaction resulted in the automatic termination of the Fund's management
agreement with Seligman (the "Seligman Management Agreement"). In anticipation
of the termination of the Seligman Management Agreement, at a meeting held on
July 29, 2008, the directors of the Fund then serving unanimously approved an
investment management agreement with RiverSource (the "Proposed Advisory
Agreement"). At the special meeting of shareholders of the Fund held on November
3, 2008, the shareholders approved the Proposed Advisory Agreement. The
Transaction closed on November 7, 2008, and upon the closing, RiverSource became
the investment advisor to the Fund.
BOARD CONSIDERATIONS
Prior to their approval of the Proposed Advisory Agreement, the directors
requested and evaluated extensive materials from, and were provided materials
and information about the Transaction and matters related to the proposed
approval by, Seligman, RiverSource and Ameriprise.
In consultation with experienced counsel, who advised on the legal standards for
consideration by the directors, the directors reviewed the Proposed Advisory
Agreement with RiverSource. The independent directors also discussed the
proposed approval with counsel in private sessions.
At their meetings on June 12, 2008, July 17, 2008 and July 29, 2008, the
directors discussed the Transaction with Seligman, and the Transaction and
RiverSource's plans and intentions regarding the Fund with representatives of
Ameriprise and RiverSource.
The directors considered all factors they believed relevant, including the
specific matters discussed below. In their deliberations, the directors did not
identify any particular information that was all-important or controlling, and
directors may have attributed different weights to the various factors. The
directors determined that the selection of RiverSource to advise the Fund, and
the overall arrangements between the Fund and RiverSource as provided in the
Proposed Advisory Agreement, including the proposed advisory fee and the related
administration arrangements between the Fund and Ameriprise, were fair and
reasonable in light of the services to be performed, expenses incurred and such
other matters as the directors considered relevant. The material factors and
conclusions that formed the basis for the directors' determination included, in
addition, the factors discussed in further detail below:
(i) the reputation, financial strength and resources of RiverSource, and its
parent, Ameriprise;
(ii) the capabilities of RiverSource with respect to compliance and its
regulatory histories;
(iii) an assessment of RiverSource's compliance system by the Fund's Chief
Compliance Officer;
(iv) that RiverSource and Ameriprise assured the directors that following the
Transaction there will not be any diminution in the nature, quality and
extent of services provided to the Fund or its shareholders;
22
Matters Relating to the Directors' Consideration of the Approval of the
Investment Management Services Agreement
(v) that within the past year the directors had performed a full annual review
of the Seligman Management Agreement, as required by the Investment Company
Act of 1940 ("1940 Act"), for the Fund and had determined that they were
satisfied with the nature, extent and quality of services provided
thereunder and that the management fee rate for the Fund was satisfactory;
(vi) the potential benefits to the Fund of the combination of RiverSource and
Seligman to the Fund, including: greater resources to attract and retain
high quality investment personnel; greater depth and breadth of investment
management capabilities, including a new team of portfolio managers for the
Fund; a continued high level of service to the Fund; and the potential for
realization of economies of scale over time since the Fund will be part of
a much larger fund complex;
(vii) the fact that the Fund's total advisory and administrative fees would not
increase by virtue of the Proposed Advisory Agreement, but would decrease
slightly from the fee rate under the Seligman Management Agreement (subject
to certain scenarios in which the total advisory and administrative fees
could increase);
(viii) that RiverSource, and not the Fund, would bear the costs of obtaining all
approvals of the Proposed Advisory Agreement;
(ix) the qualifications of the personnel of RiverSource and Ameriprise that
would provide advisory and administrative services to the Fund;
(x) the terms and conditions of the Proposed Advisory Agreement, including the
directors' review of differences from the Seligman Management Agreement;
(xi) that RiverSource and Ameriprise have agreed to refrain from imposing or
seeking to impose, for a period of two years after the closing of the
Transaction, any "unfair burden" (within the meaning of Section 15(f ) of
1940 Act) on the Fund; and
(xii) that certain members of RiverSource's management have a significant amount
of experience integrating other fund families.
NATURE, EXTENT AND QUALITY OF SERVICES PROVIDED
In considering the nature, extent and quality of the services to be provided
under the Proposed Advisory Agreement, the directors of the Fund considered,
among other things, the expected impact of the Transaction on the operations of
the Fund, the information provided by RiverSource with respect to the nature,
extent and quality of services to be provided by it, RiverSource's compliance
programs and compliance records, and presentations provided on the quality of
RiverSource's investment research capabilities and the other resources it and
Ameriprise have indicated that they would dedicate to performing services for
the Fund.
The directors noted the professional experience and qualifications of the new
portfolio management team proposed for the Fund and other senior personnel of
RiverSource. The directors considered a report by, the Fund's Chief Compliance
Officer, assessing RiverSource's compliance system, which was followed by a
private session with the Fund's Chief Compliance Officer. They also discussed
RiverSource's compliance system with the Chief Compliance Officer for the funds
managed by
23
Matters Relating to the Directors' Consideration of the Approval of the
Investment Management Services Agreement
RiverSource. The directors also considered RiverSource's presentation on the
selection of brokers and dealers for portfolio transactions. As administrative
services (provided under the Seligman Management Agreement) would be provided to
the Fund by Ameriprise at no additional cost under a new administrative services
agreement rather than pursuant to the Proposed Advisory Agreement, the directors
considered Ameriprise's capability to provide such administrative services as
well as RiverSource's and Ameriprise's role in coordinating the activities of
the Fund's other service providers. The directors noted that Ameriprise intended
to continue Seligman's practice of subcontracting administrative services
provided by Seligman for the Fund to State Street Bank and Trust Company for the
foreseeable future. The directors concluded that, overall, they were satisfied
with assurances from RiverSource and Ameriprise as to the expected nature,
extent and quality of the services to be provided to the Fund under the Proposed
Advisory Agreement and the new administrative services agreement.
COSTS OF SERVICES PROVIDED AND PROFITABILITY
In considering the costs of services to be provided by RiverSource under the
Proposed Advisory Agreement, the directors considered, among other things, the
projected pre-tax, pre-distribution expense profitability of RiverSource's
proposed relationship with the Fund and discussed the assumptions of RiverSource
and the limitations of the information provided. The directors noted that
RiverSource had undertaken to provide profitability information in connection
with future contract continuances. The directors also considered RiverSource's
financial condition based on information provided by it.
The directors noted that the proposed fee under the Proposed Advisory Agreement
was slightly lower than the fee rate paid by the Fund pursuant to the Seligman
Management Agreement and that due to the change in the methodology for
calculating such fees, the fees payable under the Proposed Advisory Agreement
could be higher than the fees that would be payable under the fee schedule in
the Seligman Management Agreement under certain scenarios. The directors
recognized that it is difficult to make comparisons of profitability from fund
advisory contracts because comparative information is not generally publicly
available and is affected by numerous factors. In reviewing the projected
profitability information, the directors considered the effect of fall-out
benefits on RiverSource's expenses. The directors concluded that they were
satisfied that RiverSource's estimated future profitability from its
relationship with the Fund was not excessive.
FALL-OUT BENEFITS
The directors noted that RiverSource may derive reputational and other benefits
from its association with the Fund.
INVESTMENT RESULTS
The directors receive and review detailed performance information on the Fund at
each regular Board meeting during the year in addition to the information
received for the meeting regarding approval of the Proposed Advisory Agreement.
The directors noted that a new portfolio manager was being proposed by
RiverSource for the Fund. The directors discussed the proposed portfolio
management team, its investment strategy and process and historical performance
record with representatives of RiverSource.
24
Matters Relating to the Directors' Consideration of the Approval of the
Investment Management Services Agreement
The directors considered the twelve-month trailing average yield of the Fund as
compared to an average of money market funds prepared by a third party provider
of money market mutual fund information for the period from 1998 through June
30, 2008. The directors also reviewed performance information of RiverSource
Cash Management Fund, which was managed at the time by the proposed portfolio
management team. Seligman had previously explained that the Fund was managed
conservatively by it, and that its average portfolio quality is higher than that
of many other money market funds. Seligman noted that the Fund was, at the time,
managed more conservatively than RiverSource Cash Management Fund and
RiverSource confirmed that it had no plans at such time to change the Fund's
strategies or risk profile and would not make any such changes without board
approval. The directors also noted that the performance of RiverSource Cash
Management Fund exceeded that of the Citigroup 3 Month Treasury Index, its
benchmark, in the first six-months of 2008, as well as the annualized one-year
period ending June 30, 2008, but had lagged such benchmark in the other periods
presented.
The directors recognized that it is not possible to predict what effect, if any,
consummation of the Transaction would have on the future performance of the
Fund.
MANAGEMENT FEE AND OTHER EXPENSES
The directors considered the proposed advisory fee rate to be paid by the Fund
to RiverSource. The directors recognized that it is difficult to make
comparisons of advisory and management fees because there are variations in the
services that are included in the fees paid by other funds.
The directors noted that, under the Proposed Advisory Agreement in respect of
the Fund, the advisory fee would be calculated solely as a percentage of the
Fund's net assets, rather than a percentage of the net assets of all funds in
the Seligman Group of Funds (the "fee base"), and would no longer have any
breakpoints. The directors noted that the proposed advisory fee under the
Proposed Advisory Agreement was slightly lower than the Fund's management fee
under the Seligman Management Agreement (even after taking the elimination of
the Fund's breakpoints under the Seligman Management Agreement into account),
although it was higher than the advisory fee for RiverSource Cash Management
Fund. The directors also compared the proposed advisory fee rate to a subset of
funds in the Lipper Money Market Funds category (the "peer group"). The
information showed the proposed advisory fee rate was within the range of fees
charged in the peer group.
In considering the proposed advisory fee rate, the directors noted that the
Fund's management fee rate under the Seligman Management Agreement covers
administrative services provided by Seligman, whereas the Proposed Advisory
Agreement does not include such services, but that Ameriprise will provide such
services to the Fund pursuant to a separate administrative services agreement
initially without a fee. The directors further considered that the
administrative fees, since they are not included in an advisory agreement, could
be increased without stockholder approval, although RiverSource noted that, at
that time, it did not have an intention to seek an increase, and that any such
administrative fee increase would require board approval. The directors also
noted RiverSource's and Ameriprise's covenants in the Transaction's stock
purchase agreement regarding compliance with Section 15(f) of the 1940 Act.
25
Matters Relating to the Directors' Consideration of the Approval of the
Investment Management Services Agreement
The directors noted that the management fee rate paid by a registered investment
company managed by Seligman that is a "clone" of the Fund is lower than the rate
paid by the Fund primarily for historical reasons.
The directors also reviewed the Fund's total expense ratio as compared to the
fees and expenses of funds within its peer group. In considering the expense
ratios of the Fund, the directors noted that the Fund has elected to have
shareholder services provided at cost by Seligman Data Corp. ("SDC"). SDC
provides services exclusively to the Seligman Group of Funds, and the directors
believed that the arrangement with SDC has provided the Fund and its
shareholders with a consistently high level of service. The directors noted that
RiverSource had previously indicated that no changes to the arrangements with
SDC were being proposed at the time by RiverSource.
The directors noted that they had concluded in their most recent continuance
considerations regarding the Seligman Management Agreement that the management
fee and total expense ratio were at an acceptable level in light of the quality
of services provided to the Fund and in comparison to the Fund's peer group;
that the total expense ratio had not changed materially since that
determination; and that RiverSource had represented that the overall expenses
for the Fund were not expected to be adversely affected by the Transaction. On
that basis, the directors concluded that the total expense ratio and proposed
advisory fee for the Fund anticipated to result from the proposed arrangements
with RiverSource was acceptable. The directors also noted that the total expense
ratio for the Fund had been reduced since the time of the most recent
consideration approval.
ECONOMIES OF SCALE
The directors noted that the management fee schedule for the Fund under the
Seligman Management Agreement contained breakpoints that take into account the
net assets of all funds in the Seligman Group of Funds, including the Fund, and
that the these breakpoints reduced the fee rate paid by the Fund at the time of
consideration. The directors also noted that, under the Proposed Advisory
Agreement in respect of the Fund, the advisory fee would be calculated solely as
a percentage of the Fund's net assets, rather than a percentage of the "fee
base," and would no longer have any breakpoints. The directors recognized that
there is no direct relationship between the economies of scale realized by funds
and those realized by their investment advisers as assets increase. The
directors do not believe that there is a uniform methodology for establishing
breakpoints that give effect to fund-specific economies of scale with respect to
services provided by fund advisers. The directors also observed that in the
investment company industry as a whole, as well as among funds similar to the
Fund, there is no uniformity or pattern in the fees and asset levels at which
breakpoints (if any) apply, and that the advisory agreements for many competitor
funds do not have breakpoints at all. The directors noted that RiverSource had
indicated that no changes to the Fund's breakpoint arrangements were proposed to
be made at the time. Having taken these factors into account, the directors
concluded that the Fund's proposed breakpoint arrangements were acceptable under
the Fund's circumstances. The directors also recognized that the Fund may
benefit from certain economies of scale over time from becoming a part of the
larger RiverSource fund complex, based on potential future synergies of
operations.
26
Proxy Results
Shareholders of Seligman Cash Management Fund, Inc. voted on two proposals at a
Special Meeting of Shareholders held on November 3, 2008. Shareholders voted in
favor of each of the proposals. The description of each proposal and number of
shares voted are as follows:
PROPOSAL 1
To consider and vote upon the proposed Investment Management Services Agreement
with River-Source Investments, LLC:
FOR AGAINST ABSTAIN
--------------- ------------- -------------
147,191,364.020 3,435,811.770 3,179,806.400
PROPOSAL 2
To elect ten directors to the Board:
FOR WITHHELD
--------------- -------------
Kathleen Blatz 160,977,372.410 6,181,678.780
Arne H. Carlson 160,571,151.050 6,587,900.140
Pamela G. Carlton 161,314,790.870 5,844,260.320
Patricia M. Flynn 161,061,824.730 6,097,226.460
Anne P. Jones 160,546,984.810 6,612,066.380
Jeffrey Laikind 160,827,128.150 6,331,923.040
Stephen R. Lewis, Jr. 160,768,739.240 6,390,311.950
Catherine James Paglia 160,996,474.570 6,162,576.620
Alison Taunton-Rigby 161,231,510.570 5,927,540.620
William F. Truscott 161,231,510.570 5,927,540.620
27
Directors and Officers
Shareholders elect a Board of Directors that oversees the Fund's operations. In
connection with the acquisition of the Fund's prior investment manager, J. & W.
Seligman & Co. Incorporated, by River-Source Investments, LLC, shareholders of
the Fund voted at a Special Meeting of Shareholders held on November 3, 2008 to
elect 10 members to the Fund's Board. Messrs. Maher and Richie served on the
Fund's Board prior to the acquisition and will continue to do so.
Each member of the Board oversees 163 portfolios in the fund complex managed by
RiverSource Investments, which includes 59 Seligman Funds and 104 RiverSource
Funds. The address of each Director is 901 S. Marquette Ave., Minneapolis, MN
55402.
Independent Directors
PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS,
NAME, (AGE), POSITION(S) HELD WITH FUND DIRECTORSHIPS AND OTHER INFORMATION
--------------------------------------- ----------------------------------------------------------
KATHLEEN BLATZ (54)(1,2,6,7) Attorney. Formerly, Chief Justice, Minnesota Supreme
Director: From Court, 1998-2006.
November 7, 2008
ARNE H. CARLSON (74)(1,2,3,5,6) Formerly, Chairman, RiverSource Funds, 1999-2006; Governor
Director: From of Minnesota.
November 7, 2008
PAMELA G. CARLTON (54)(4,6,7) President, Springboard -- Partners in Cross Cultural
Director: From Leadership (consulting company).
November 7, 2008
PATRICIA M. FLYNN (58)(1,3,6) Trustee Professor of Economics and Management, Bentley
Director: From College. Formerly, Dean, McCallum Graduate School of
November 7, 2008 Business, Bentley College.
ANNE P. JONES (73)(1,2,6,7) Attorney and Consultant.
Director: From
November 7, 2008
JEFFREY LAIKIND, CFA (73)(4,6,7) Director, American Progressive Insurance. Formerly,
Director: From Managing Director, Shikiar Asset Management.
November 7, 2008
STEPHEN R. LEWIS, JR. (69)(1,2,3,4,6) President Emeritus and Professor of Economics, Carleton
Director and Chairman College; Director, Valmont Industries, Inc. (manufactures
of the Board: From irrigation systems).
November 7, 2008
JOHN F. MAHER (64)(4,6,7) Retired President and Chief Executive Officer, and former
Director: December Director, Great Western Financial Corporation (bank
2006 to Date holding company) and its principal subsidiary, Great
Western Bank (a federal savings bank).
----------
See footnotes on page 29.
28
Directors and Officers
Independent Directors (continued)
PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS,
NAME, (AGE), POSITION(S) HELD WITH FUND DIRECTORSHIPS AND OTHER INFORMATION
--------------------------------------- ----------------------------------------------------------
CATHERINE JAMES PAGLIA (56)(2,3,4,5,6) Director, Enterprise Asset Management, Inc. (private real
Director: From estate and asset management company).
November 7, 2008
LEROY C. RICHIE (66)(3,4,6) Counsel, Lewis & Munday, P.C. (law firm); Director,
Director: 2000 to Date Vibration Control Technologies, LLC (auto vibration
technology); Lead Outside Director, Digital Ally Inc.
(digital imaging) and Infinity, Inc. (oil and gas
exploration and production); Director and Chairman,
Highland Park Michigan Economic Development Corp.; and
Chairman, Detroit Public Schools Foundation; Director, OGE
Energy Corp. (energy and energy services provider).
Formerly, Chairman and Chief Executive Officer, Q
Standards Worldwide, Inc. (library of technical
standards); Director, Kerr-McGee Corporation (diversified
energy and chemical company); Trustee, New York University
Law Center Foundation; and Vice Chairman, Detroit Medical
Center and Detroit Economic Growth Corp.
ALISON TAUNTON-RIGBY (64)(3,4,5,6) Chief Executive Officer and Director, RiboNovix, Inc.
Director: From since 2003 (biotechnology); Director, Idera
November 7, 2008 Pharmaceutical, Inc. (biotechnology); Healthways, Inc.
(health management programs). Formerly, President,
Forester Biotech.
Interested Director*
WILLIAM F. TRUSCOTT (48)*(6) President -- US Asset Management and Chief Investment
Director and Vice Officer, Ameriprise Financial, Inc. and President,
President: From Chairman of the Board, and Chief Investment Officer,
November 7, 2008 RiverSource Investments, LLC; Director, President and
Chief Executive Officer, Ameriprise Certificate Company;
and Chairman of the Board, Chief Executive Officer, and
President, RiverSource Distributors, Inc. Formerly, Senior
Vice President -- Chief Investment Officer, Ameriprise
Financial, Inc.; and Chairman of the Board and Chief
Investment Officer, RiverSource Investments, LLC,
2001-2005.
----------
* Mr. Truscott is considered an "interested person" of the Fund, as defined
in the Investment Company Act of 1940, as amended, by virtue of his
position with Ameriprise Financial, Inc. and its affiliates.
Member:
(1) Board Governance Committee
(2) Compliance Committee
(3) Contracts Committee
(4) Distribution Committee
(5) Executive Committee
(6) Investment Review Committee
(7) Joint Audit Committee
29
Directors and Officers
Fund Officers
The Board appoints officers who are responsible for day-to-day business
decisions based on policies it has established. The officers serve at the
pleasure of the Board. In addition to Mr. Truscott, who is a Director and Vice
President of the Fund, the Fund's other officers are:
NAME, (AGE), POSITION(S)
HELD WITH FUND, ADDRESS PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
------------------------- ----------------------------------------------------------
PATRICK T. BANNIGAN (43) Director and Senior Vice President - Asset Management,
President: From Products and Marketing, RiverSource Investments, LLC;
November 7, 2008 Director and Vice President - Asset Management, Products
and Marketing,
172 Ameriprise RiverSource Distributors, Inc. Formerly, Managing Director
Financial Center and Global Head of Product, Morgan Stanley Investment
Minneapolis, MN 55474 Management, 2004-2006; President, Touchstone Investments,
2002-2004.
MICHELLE M. KEELEY (44) Executive Vice President - Equity and Fixed Income,
Vice President: From Ameriprise Financial, Inc. and RiverSource Investments,
November 7, 2008 LLC; Vice President - Investments, Ameriprise Certificate
Company. Formerly, Senior Vice
172 Ameriprise President - Fixed Income, Ameriprise Financial, Inc.,
Financial Center 2002-2006 and RiverSource Investments, LLC, 2004-2006.
Minneapolis, MN 55474
AMY K. JOHNSON (43) Vice President - Asset Management and Trust Company
Vice President: From Services, RiverSource Investments, LLC. Formerly, Vice
November 7, 2008 President - Operations and Compliance, RiverSource
Investments, LLC,
5228 Ameriprise Financial 2004-2006; Director of Product Development - Mutual Funds,
Center Ameriprise Financial, Inc., 2001-2004.
Minneapolis, MN 55474
SCOTT R. PLUMMER (49) Vice President and Chief Counsel - Asset Management,
Vice President, General Ameriprise Financial, Inc.; Chief Counsel, RiverSource
Counsel and Secretary: Distributors, Inc. and Chief Legal Officer and Assistant
From November 7, 2008 Secretary, RiverSource Investments, LLC; Vice President,
General Counsel, and Secretary, Ameriprise
5228 Ameriprise Financial Certificate Company. Formerly, Vice President - Asset
Center Management Compliance, Ameriprise Financial, Inc.,
Minneapolis, MN 55474 2004-2005; Senior Vice President and Chief Compliance
Officer, USBancorp Asset Management, 2002-2004.
LAWRENCE P. VOGEL (52) Treasurer of each of the investment companies of the
Treasurer: 2000 to Date Seligman Group of Funds since 2000; and Treasurer,
Seligman Data Corp. since 2000. Formerly, Senior Vice
100 Park Avenue President, J. & W. Seligman & Co. Incorporated and Vice
New York, NY 10017 President of each of the investment companies of the
Seligman Group of Funds, 1992-2008.
30
Directors and Officers
Fund Officers (continued)
NAME, (AGE), POSITION(S)
HELD WITH FUND, ADDRESS PRINCIPAL OCCUPATION(S) DURING PAST FIVE YEARS
------------------------- ----------------------------------------------------------
ELEANOR T.M. HOAGLAND (56) Chief Compliance Officer, RiverSource Investments, LLC (J.
Chief Compliance & W. Seligman & Co. Incorporated prior to November 7,
Officer: 2004 to Date 2008), of each of the investment companies of the Seligman
Group of Funds since 2004; Money Laundering Prevention
Money Laundering Prevention Officer and Identity Theft Prevention Officer, RiverSource
Officer and Identity Theft Investments, LLC for each of the investment companies of
Prevention Officer: From the Seligman Group of Funds since November 7, 2008.
November 7, 2008 Formerly, Managing Director, J. & W. Seligman & Co.
Incorporated and Vice President of each of the investment
100 Park Avenue companies of the Seligman Group of Funds, 2004-2008.
New York, NY 10017
The Fund's Statement of Additional Information (SAI) includes additional
information about Fund directors and is available, without charge, upon request.
You may call toll-free (800) 221-2450 in the US or call collect (212) 682-7600
outside the US to request a copy of the SAI, to request other information about
the Fund, or to make shareholder inquiries.
31
Additional Fund Information
FUND SYMBOLS
Class A: SCMXX
Class B: SCBXX
Class C: SCCXX
Class C(2): SMCXX
Class R: SMRXX
MANAGER
From November 7, 2008
RiverSource
Investments, LLC
200 Ameriprise
Financial Center
Minneapolis, MN 55474
Until November 6, 2008
J. & W. Seligman & Co.
Incorporated
100 Park Avenue
New York, NY 10017
GENERAL DISTRIBUTOR
RiverSource Fund
Distributors, Inc.
(formerly Seligman Advisors, Inc.)
100 Park Avenue
New York, NY 10017
SHAREHOLDER SERVICE AGENT
Seligman Data Corp.
100 Park Avenue
New York, NY 10017
Mail inquiries to:
P.O. Box 9759
Providence, RI 02940-9759
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Deloitte & Touche LLP
IMPORTANT TELEPHONE NUMBERS
(800) 221-2450 Shareholder Services
(800) 445-1777 Retirement Plan Services
(212) 682-7600 Outside the United States
(800) 622-4597 24-Hour Automated
Telephone Access Service
QUARTERLY SCHEDULE OF INVESTMENTS
A complete schedule of portfolio holdings owned by the Fund will be filed with
the SEC for the first and third quarters of each fiscal year on Form N-Q, and
will be available to shareholders (i) without charge, upon request, by calling
toll-free (800) 221-2450 in the US or collect (212) 682-7600 outside the US or
(ii) on the SEC's website at www.sec.gov.(1) In addition, the Form N-Q may be
reviewed and copied at the SEC's Public Reference Room in Washington, D.C.
Information on the operation of the Public Reference Room may be obtained by
calling (800) SEC-0330. Certain of the information contained on the Fund's Form
N-Q is also made available to shareholders on Seligman's website at
www.seligman.com.(1)
PROXY VOTING
A description of the policies and procedures used by the Fund to determine how
to vote proxies relating to portfolio securities as well as information
regarding how the Fund voted proxies relating to portfolio securities during the
12-month period ended June 30 of each year will be available (i) without charge,
upon request, by calling toll-free (800) 221-2450 in the US or collect (212)
682-7600 outside the US and (ii) on the SEC's website at www.sec.gov.(1)
Information for each new 12-month period ending June 30 will be available no
later than August 31 of that year.
----------
(1) These website references are inactive textual references and information
contained in or otherwise accessible through these websites does not form a
part of this report or the Fund's prospectuses or statement of additional
information.
32
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This report is intended only for the information of shareholders or those who
have received the offering prospectus covering shares of Capital Stock of
Seligman Cash Management Fund, Inc. which contains information about the
investment objective, risks, charges, and expenses of the Fund, each of which
should be considered carefully before investing or sending money.
TXCM2 12/08