Edgar Filing: Seligman Premium Technology Growth Fund, Inc.

As filed with the Securities and Exchange Commission on September 4, 2009

Securities Act File No. 333-______
1940 Act File No. 811-_____

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM N-2
(CHECK APPROPRIATE BOX OR BOXES)

[X] REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

[ ] Pre-Effective Amendment No. ___
[ ] Post-Effective Amendment No. ___

and/or

[X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
[ ] AMENDMENT NO. ___

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SELIGMAN PREMIUM TECHNOLOGY GROWTH FUND, INC.
(Exact Name of Registrant as Specified in Charter)
200 Ameriprise Financial Center
Minneapolis, Minnesota 55474
(Address of Principal Executive Offices)

Registrant's Telephone Number, including Area Code: (212) 850-1864

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SCOTT R. PLUMMER
5228 AMERIPRISE FINANCIAL CENTER
MINNEAPOLIS, MN 55474
(NAME AND ADDRESS OF AGENT FOR SERVICE)

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With Copies to:

Leonard B. Mackey, Jr., Esq. [_____]
Clifford Chance US LLP
31 West 52nd Street
New York, New York 10019
(212) 878-8000

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APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after the
effective date of this Registration Statement.

If any securities being registered on this form will be offered on a
delayed or continuous basis in reliance on Rule 415 under the Securities Act of
1933, other than securities offered only in connection with a dividend
reinvestment plan, please check this box. [ ]

It is proposed that this filing will become effective (check appropriate
box)

[ ] when declared effective pursuant to 8(c).

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CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933

PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
AMOUNT BEING PRICE PER OFFERING REGISTRATION
TITLE OF SECURITIES BEING REGISTERED REGISTERED UNIT(1) PRICE(1) FEE
------------------------------------ ------------ --------- --------- ------------

Common Stock, $0.01 par value ...... 1,000 shares $20.00 $20,000 $1.12

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(1) Estimated solely for purposes of calculating the filing fee in accordance
with Rule 457(c) under the Securities Act of 1933.

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL SUCH REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.

Subject to Completion
Preliminary Prospectus dated [_____], 2009

PROSPECTUS

[LOGO]
[_____] COMMON SHARES
SELIGMAN PREMIUM TECHNOLOGY GROWTH FUND, INC.
$[_____] PER SHARE

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THE FUND. Seligman Premium Technology Growth Fund, Inc. (the "Fund") is a
newly organized, non-diversified, closed-end management investment company
registered under the Investment Company Act of 1940, as amended (the "Investment
Company Act"). The Fund's investment manager is RiverSource Investments, LLC
("RiverSource Investments" or the "Investment Manager").

INVESTMENT OBJECTIVES. The Fund's investment objectives are to seek growth
of capital and reasonable current income.

NO PRIOR HISTORY. BECAUSE THE FUND IS NEWLY ORGANIZED, IT HAS NO
PERFORMANCE HISTORY AND ITS SHARES OF COMMON STOCK ("COMMON SHARES") HAVE NO
HISTORY OF PUBLIC TRADING. THE COMMON STOCK OF CLOSED-END MANAGEMENT INVESTMENT
COMPANIES, SUCH AS THE FUND, FREQUENTLY TRADES AT A DISCOUNT FROM ITS NET ASSET
VALUE. THE RISK OF THE COMMON SHARES TRADING AT SUCH A DISCOUNT MAY BE OF
GREATER CONCERN FOR INVESTORS EXPECTING TO SELL THEIR SHARES RELATIVELY SOON
AFTER COMPLETION OF THIS OFFERING.

The Fund's Common Shares have been authorized for listing on the [_____]
Stock Exchange, subject to notice of issuance, under the trading or "ticker"
symbol "[_____]."

INVESTMENT STRATEGY. Under normal market conditions, the Fund's investment
program will consist primarily of (1) investing in a portfolio of equity
securities of technology and technology-related companies that seek to exceed
the total return, before fees and expenses, of the S&P North America Technology
Sector Index(R) and (2) writing call options on the NASDAQ 100 Index(R) or its
exchange-traded fund equivalent (the "NASDAQ 100") on a continuous basis,
typically ranging from 25% to 90% of the underlying value of the Fund's holdings
of common stock.

Under normal market conditions, the Fund intends to invest at least 80% of
its "Managed Assets" (as defined herein) in a portfolio of equity securities of
technology and technology-related companies that the Investment Manager believes
offer attractive opportunities for capital appreciation. Technology and
technology-related companies are those companies that use technology extensively
to improve their business processes and applications and may include companies
operating in any industry, including but not limited to software,
communications, information and medical technology.

(continued on following page)

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THE FUND'S INVESTMENT POLICY OF INVESTING IN TECHNOLOGY AND
TECHNOLOGY-RELATED COMPANIES AND WRITING CALL OPTIONS INVOLVES A HIGH DEGREE OF
RISK. YOU COULD LOSE SOME OR ALL OF YOUR INVESTMENT. SEE "RISKS" BEGINNING ON
PAGE [__].

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

TOTAL ASSUMING FULL
EXERCISE OF PER SHARE
TOTAL OVER-ALLOTMENT
PER SHARE TOTAL OPTION(3)
--------- -------- ---------------------

PRICE TO PUBLIC .................. $[20.00] $[_____] $[_____]
SALES LOAD(1) .................... $[_____] $[_____] $[_____]
ESTIMATED OFFERING EXPENSES(2) ... $[_____] $[_____] $[_____]
PROCEEDS, AFTER EXPENSES,
TO THE FUND ................... $[_____] $[_____] $[_____]

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(1) [The Fund has agreed to pay the underwriters $[_____] per Common Share in
partial reimbursement of expenses incurred in connection with the offering.
See "Underwriting."]

(2) Total expenses of the Common Share offering paid by the Fund (which do not
include the sales load) are estimated to be $[____], or $[____] assuming
full exercise of the over-allotment option, which represents $[____] per
Common Share issued. The Fund will pay its organizational expenses and
Common Share offering costs up to $[____] per Common Share, and the
Investment Manager has agreed to pay all of the Fund's organizational
expenses and Common Share offering costs (other than sales load) that
exceed $[____] per Common Share. These offering costs include payment by
the Fund to the Underwriters of $[____] per Common Share as a partial
reimbursement of expenses incurred in connection with the offering.

(3) The Underwriters named in this Prospectus have the option to purchase up to
[_____] additional Common Shares from the Fund in certain circumstances.
See "Use of Proceeds."

The Underwriters expect to deliver the Common Shares to purchasers on or
about [__________], 2009.

[Underwriters]

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Prospectus dated [__________], 2009

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(continued from previous page)

The Fund may invest in companies of any size. Securities of large companies
that are well established in the world technology market can be expected to grow
with the market. Rapidly changing technologies and expansion of
technology-related industries often provide a favorable environment for
companies of small-to-medium size, and the Fund may invest in these companies as
well. Although the Fund will invest primarily in U.S. companies, the Fund may
invest up to 25% of its Managed Assets in companies organized outside of the
United States.

In addition to the Fund's holdings in technology and technology-related
companies, the Fund will seek to cushion downside volatility and produce current
income by writing call options on the NASDAQ 100 Index(R) or its exchange-traded
fund equivalent (the "NASDAQ 100") on a continuous basis, typically ranging from
25% to 90% of the underlying value of the Fund's holdings of common stock. In
determining the level of call options to be written on the NASDAQ 100, the
Investment Manager will evaluate whether premiums are attractive relative to the
risk of the price of the index rising above the strike price by more than the
amount of the premium to be received. The Fund may also seek to provide downside
protection by purchasing puts on the NASDAQ 100 when premiums on these options
are considered by the Investment Manager to be low and, therefore, attractive
relative to the downside protection provided. Furthermore, under normal market
conditions, the Fund may invest up to 20% of its total assets in debt
securities, (including convertible and non-convertible debt securities), such as
debt securities issued by technology and technology-related companies and
obligations of the U.S. Government, its agencies and instrumentalities and
government-sponsored enterprises. The Fund may exceed this limit under certain
circumstances during its initial three months of operation. See "The Fund's
Investments--Debt Securities."

There can be no assurance that the Fund will achieve its investment
objectives.

You should read this Prospectus, which contains important information about
the Fund that you ought to know before deciding whether to invest. You should
retain this Prospectus for future reference. A Statement of Additional
Information ("SAI"), dated [__________], 2009, containing additional information
about the Fund, has been filed with the Securities and Exchange Commission
("SEC") and is incorporated by reference in its entirety into (i.e., is legally
considered a part of) this Prospectus. You may request a free copy of the SAI,
the table of contents of which is on page [__] of this Prospectus, by calling
[toll free]. Additionally, you may obtain a copy (and other information
regarding the Fund) from the SEC's web site (http://www.sec.gov). All website
references in this prospectus and the SAI are inactive textual references and
the contents of such websites are not incorporated into such documents.
Information on our website is not part of this prospectus or the SAI and should
not be considered when making an investment decision.

Common Shares do not represent a deposit with or obligation of, and are not
guaranteed or endorsed by, any bank or other insured depository institution and
are not federally insured by the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other government agency. See "Risks." For more
information on the Fund's investment strategies, see "The Fund's Investments."

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TABLE OF CONTENTS

PAGE
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Prospectus Summary ....................................................... 1
Summary of Fund Expenses ................................................. 15
The Fund ................................................................. 16
Use of Proceeds .......................................................... 16
The Fund's Investments ................................................... 16
Risks .................................................................... 21
Management of the Fund ................................................... 30
Net Asset Value .......................................................... 32
Distributions ............................................................ 33
Dividend Investment Plan ................................................. 35
Description of Shares .................................................... 36
Borrowings and Preferred Shares .......................................... 37
Anti-Takeover and Other Provisions of the Maryland General Corporation
Law and the Fund's Charter and Bylaws ................................. 39
Repurchase of Common Shares; Tender Offers; Conversion to Open-End Fund .. 41
Tax Matters .............................................................. 42
Underwriting ............................................................. 44
Custodian ................................................................ 47
Administrative Services Agent ............................................ 47
Transfer Agent, Stockholder Service Agent and Dividend Paying Agent ...... 48
Board Services Corporation ............................................... 48
Legal Opinions ........................................................... 48

YOU SHOULD ONLY RELY ON THE INFORMATION CONTAINED OR INCORPORATED BY
REFERENCE INTO THIS PROSPECTUS. THE FUND HAS NOT, AND THE UNDERWRITERS HAVE NOT,
AUTHORIZED ANYONE TO PROVIDE YOU WITH DIFFERENT INFORMATION. THE FUND IS NOT,
AND THE UNDERWRITERS ARE NOT, MAKING AN OFFER OF THESE SECURITIES IN ANY STATE
WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE INFORMATION
CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THIS PROSPECTUS. THE FUND'S BUSINESS, FINANCIAL CONDITION, RESULTS
OF OPERATIONS AND PROSPECTS MAY HAVE CHANGED SINCE THAT DATE.

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PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this Prospectus.
This summary does not contain all of the information that you should consider
before investing in the Fund's common stock. You should carefully read the
entire Prospectus, including the documents incorporated by reference into it,
particularly the section entitled "Risks" beginning on page [__].

THE FUND...................... Seligman Premium Technology Growth Fund, Inc.
(the "Fund") is a newly organized,
non-diversified, closed-end management
investment company registered under the
Investment Company Act of 1940, as amended (the
"Investment Company Act"). The Fund's
investment manager is RiverSource Investments,
LLC ("RiverSource Investments" or the
"Investment Manager").

THE OFFERING OF COMMON
SHARES..................... The Fund is offering shares of common stock at
[$20.00] per share through a group of
underwriters (the "Underwriters") led by
[_____]. The shares of common stock are called
"Common Shares" in this Prospectus. The Fund
has given the Underwriters an option to
purchase up to [_____] additional Common Shares
to cover orders in excess of [_____] Common
Shares. See "Underwriting." The Fund will pay
its organizational expenses and Common Share
offering costs up to $[_____] per Common Share,
and the Investment Manager has agreed to pay
all of the Fund's organizational expenses and
Common Share offering costs (other than sales
load) that exceed $[_____] per Common Share.
These offering costs include payment by the
Fund to the Underwriters of $[_____] per Common
Share as a partial reimbursement of expenses
incurred in connection with the offering.

INVESTMENT OBJECTIVES AND
PRINCIPAL STRATEGIES OF THE
FUND....................... The Fund's investment objectives are to seek
growth of capital and reasonable current
income.

Under normal market conditions, the Fund's
investment program will consist primarily of
(1) investing in a portfolio of equity
securities of technology and technology-related
companies that seek to exceed the total return,
before fees and expenses, of the S&P North
America Technology Sector Index(R) and (2)
writing call options on the NASDAQ 100 Index(R)
or its exchange traded fund ("ETF") equivalent
(the "NASDAQ 100") on a continuous basis,
typically ranging from 25% to 90% of the
underlying value of the Fund's holdings of
common stock.

Under normal market conditions, the Fund
intends to invest at least 80% of its "Managed
Assets" (as defined herein) in a portfolio of
equity securities of technology and
technology-related companies that the
Investment Manager believes offer attractive
opportunities for capital appreciation.
Technology and technology-related companies are
those companies that use technology extensively
to improve their business processes and
applications and may include companies
operating in any industry, including but not
limited to software, communications,
information and medical technology.

-1-

environment for companies of small-to-medium
size, and the Fund may invest in these
companies as well. Although the Fund will
invest primarily in U.S. companies, the Fund
may invest up to 25% of its Managed Assets in
companies organized outside of the United
States.

In addition to the Fund's core holdings in
technology and technology-related companies,
the Fund will seek to cushion downside
volatility and produce current income by
utilizing certain options strategies (the
"Options Strategies"), primarily consisting of
writing call options on the NASDAQ 100 on a
continuous basis, typically ranging from 25% to
90% of the underlying value of the Fund's
holdings of common stock. In determining the
level of call options to be written on the
NASDAQ 100, the Investment Manager will
evaluate whether premiums are attractive
relative to the risk of the price of the NASDAQ
100 rising above the strike price by more than
the amount of the premium to be received. When
premiums on call options on the NASDAQ 100 are
considered by the Investment Manager to be less
attractive (i.e., very low), the Fund will
write such options with respect to a lower
percentage of the Fund's portfolio, typically
toward the lower end of the range described
above. Conversely, when premiums on call
options on the NASDAQ 100 are considered by the
Investment Manager to be exceptionally
attractive (i.e., very high), the Fund will
write such options with respect to a greater
percentage of the Fund's portfolio, typically
toward the higher end of the range described
above. To the extent that premiums on call
options on the NASDAQ 100 are considered by the
Investment Manager to be neither very high nor
very low, the Investment Manager will adjust
the Fund's options exposure accordingly.

The Fund intends to write (sell) NASDAQ 100
call options that are exchange-listed or traded
over-the-counter ("OTC"). However, index
options differ from options on individual
securities (including ETFs) in that index
options (i) typically are settled in cash
rather than by delivery of securities and (ii)
reflect price fluctuations in a group of
securities or segments of the securities market
rather than price fluctuations in a single
security. Compared to call options on
individual stocks (including ETFs), writing
call options on the NASDAQ 100 Index can
achieve better tax efficiency because listed
options on broad-based securities indices are
"section 1256 contracts" that are subject to
more favorable tax treatment than options on
individual stocks. Accordingly, given this
beneficial tax treatment and that index options
are typically settled in cash at expiration
(which can be less disruptive to portfolio
management), the Investment Manager will
generally prefer to write options on the NASDAQ
100 Index.

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market value of the NASDAQ 100 will determine
the gain or loss realized by the Fund as the
seller of the index call option. In the case of
a written call option on an ETF, such as the
NASDAQ 100, if the call option is exercised,
the Fund will be required to deliver the number
of shares of that ETF (representing the NASDAQ
100) for which the option was exercised. This
is likely to require that the Fund purchase
such shares at prices in excess of the exercise
price of the option, meaning that it is likely
that the Fund will incur a loss. Writing call
options on the NASDAQ 100 involves a tradeoff
between the option premiums received and
reduced participation in potential future stock
price appreciation of the Fund's common stock
holdings.

The Fund may also seek to provide downside
protection by purchasing puts on NASDAQ 100
when premiums on these options are considered
by the Investment Manager to be low and,
therefore, attractive relative to the downside
protection provided.

The Fund may also buy or write other call and
put options on securities, indices, ETFs and
market baskets of securities to generate
additional income or return or to provide the
portfolio with downside protection. In this
regard, options may include writing "naked"
call options (i.e., selling a call option on a
security not owned by the Fund), writing "in-"
or "out-of-the-money" put options or buying or
selling options in connection with closing out
positions prior to expiration of any options.
These options may be exchange-listed or OTC.
Furthermore, under normal market conditions,
the Fund may invest up to 20% of its total
assets in debt securities (including
convertible and non-convertible debt
securities), such as debt securities issued by
technology and technology-related companies and
obligations of the U.S. Government, its
agencies and instrumentalities, and
government-sponsored enterprises. The Fund may
exceed this limit under certain circumstances
during its initial three months of operation.
See "The Fund's Investments--Debt Securities."

The Fund's investment objectives and policies
are non-fundamental and may be changed by the
Fund's Board of Directors (the "Board") without
approval of the Fund's holders of Common Shares
(the "Common Stockholders"). However, the
Fund's investment policy of investing at least
80% of its Managed Assets in equity securities
of technology and technology-related companies
and its policy with respect to the use of
written call options on the NASDAQ 100 on a
continuous basis may be changed by the Board
without stockholder approval only following the
provision of 60 days' prior written notice to
Common Stockholders.

INVESTMENT RATIONALE.......... The Investment Manager believes that a strategy
of owning a portfolio of equity securities in
technology and technology-related companies in
conjunction with writing call options on the
NASDAQ 100 should generally provide returns
that are superior to investing in the same or
similar stocks without an associated call
option writing program under three different
stock market scenarios: (1) down-trending
technology markets; (2) flat market conditions
for technology; and (3) moderately rising
technology markets. In the Investment Manager's
opinion, only in more strongly rising
technology markets would the option strategy on
the NASDAQ 100 to be used by the Fund generally
be expected to underperform the stock-only
portfolio. For these purposes, the Investment
Manager considers more strongly rising equity
market conditions to exist whenever the current
annual rate of return for U.S. common stocks of
technology companies (as represented by the
NASDAQ 100) exceeds the long-term historical
average of stock market returns. The Investment
Manager considers moderately rising technology
market

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conditions to exist whenever current annual
returns on U.S. common stocks of technology
companies are positive, but do not exceed their
long-term historical average.

In addition, the Investment Manager believes
that the flexible investment strategy of using
options in a variety of circumstances (whether
buying, selling or writing options on
individual securities, indices or otherwise)
will permit the Fund to take advantage of
various market conditions. This may include
purchasing put options when such options are
considered to be inexpensive or writing call
options when premiums are high. See "The Fund's
Investments" and "Risks."

USE OF LEVERAGE............... The Fund does not currently anticipate issuing
preferred stock of the Fund ("Preferred
Shares") or borrowing money in order to
purchase additional portfolio securities.
However, the Fund is authorized to issue
Preferred Shares, so long as the asset coverage
(as defined in the Investment Company Act) with
respect to Preferred Shares is at least 200% or
borrow money in amounts of up to 33 1/3% of the
value of its total assets (which includes
amounts borrowed for investment purposes) at
the time of such borrowings to purchase
portfolio securities and for portfolio
management purposes. This practice is known as
"leverage." See "Borrowings and Preferred
Shares." To the extent that the Fund uses
leverage, it would seek to obtain a higher
return for Common Stockholders than if the Fund
did not use leverage. Leveraging is a
speculative technique and there are special
risks involved. See "Risks--Leverage Risk."

THE INVESTMENT MANAGER........ The Fund's investment manager is RiverSource
Investments, LLC, located at 200 Ameriprise
Financial Center, Minneapolis, Minnesota 55474.
RiverSource Investments is the investment
manager to the RiverSource, RiverSource
Partners, Threadneedle and Seligman funds (the
"RiverSource Family of Funds"), and is a
wholly-owned subsidiary of Ameriprise
Financial, Inc. ("Ameriprise Financial"), a
financial planning and financial services
company. In addition to managing investments
for the RiverSource Family of Funds,
RiverSource Investments manages investments for
separate account clients, for itself and for
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.

The Fund will pay RiverSource Investments a fee
for managing its assets. Under the Investment
Management Services Agreement (the "Investment
Management Agreement"), the fee will be at the
annual rate of [_____]% of the Fund's average
daily Managed Assets. "Managed Assets" means
the total assets of the Fund, minus the sum of
its accrued liabilities (other than Fund
liabilities incurred for the express purpose of
creating financial leverage). Total assets for
this purpose shall include assets attributable
to the Fund's use of financial leverage
(whether or not those assets are reflected in
the Fund's financial statements for purposes of
generally accepted accounting principles).

THE OFFERING.................. The Fund is offering [_____] shares of common
stock, par value $0.01 per share ("Common
Shares"), through a group of underwriters (the
"Underwriters") led by [_____] and [_____]. The
Underwriters have been granted an option by the
Fund to purchase up to [_____] additional
Common Shares solely to cover orders in excess
of [_____] Common Shares. The initial public
offering price is $[20] per

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share. The minimum purchase in this offering is
100 Shares ($2,000). See "Underwriting." The
Fund will pay its organizational expenses and
Common Share offering costs up to $[_____] per
Common Share, and the Investment Manager has
agreed to pay all of the Fund's organizational
expenses and Common Share offering costs (other
than sales load) that exceed $[_____] per
Common Share. These offering costs include
payment by the Fund to the Underwriters of
$[_____] per Common Share as a partial
reimbursement of expenses incurred in
connection with the offering.

Financial intermediaries that sell shares may
impose fees, terms and conditions on investor
accounts and investments in the Fund that are
in addition to the terms and conditions imposed
by the Fund. Any fees, terms and conditions
imposed by financial intermediaries may affect
or limit an investor's ability to purchase
shares or otherwise transact business with the
Fund.

DIVIDEND DISTRIBUTIONS ON
COMMON SHARES.............. Initial Distribution. The Fund's initial
distribution is expected to be declared
approximately 60 days after the completion of
the offering, and paid approximately 40 days
later, depending upon market conditions.
Thereafter distributions are expected to be
declared quarterly (each March, June, September
and December), depending on market conditions.
Unless you elect to receive distributions in
cash, all of your distributions will be
automatically reinvested in additional Common
Shares under the Fund's Dividend Investment
Plan. See "Dividend Investment Plan." The Board
may change the Fund's distribution policy and
the amount or timing of the distributions,
based on a number of factors, including, but
not limited to, the amount of the Fund's
undistributed net investment income and net
short- and long-term capital gains and
historical and projected net investment income
and net short- and long-term capital gains.

Level Rate Distribution Policy. Commencing with
the Fund's first distribution, the Fund intends
to make quarterly cash distributions to Common
Stockholders at a rate that reflects the past
and projected performance of the Fund. The Fund
expects to receive all or some of its current
income and gains from the following sources:
(i) dividends received by the Fund that are
paid on the equity and equity-related
securities in its portfolio; and (ii) capital
gains (short-term and long-term) from the sale
of portfolio securities and option premiums.
Distributions would be made only after paying
dividends on Preferred Shares, if any have been
issued, and interest and required principal
payments on borrowings, if any. It is possible
that the Fund's distributions will at times
exceed the earnings and profits of the Fund and
therefore all or a portion of such
distributions may constitute a return of
capital as described below. Distributions may
be variable, and the Fund's distribution rate
will depend on a number of factors, including
the net earnings on the Fund's portfolio
investments and the rate at which such net
earnings change as a result of changes in the
timing of, and rates at which, the Fund
receives income from the sources described
above. The net investment income of the Fund
consists of all income (other than net
short-term and long-term capital gains) less
all expenses of the Fund. As portfolio and
market conditions change, the rate of dividends
on the Common Shares and the Fund's
distribution policy could change. Over time,
the Fund will distribute all of its net
investment income and net short-term capital
gains. In addition, at least annually, the Fund
intends to distribute any net capital gain
(which is the excess of net long-term capital
gain over net short-tem capital loss) or,
alternatively, to retain all or a portion of
the year's net capital gain

-5-

and pay federal income tax on the retained
gain. As provided under federal law, Common
Stockholders of record as of the end of the
Fund's taxable year will include their
attributable share of the retained gain in
their income for the year as a long-term
capital gain and will be entitled to a tax
credit or refund for the tax deemed paid on
their behalf by the Fund. The Fund may treat
the cash value of tax credit and amounts
refunded in connection with retained capital
gains as a substitute for equivalent cash
distributions.

The Investment Company Act currently limits the
number of times the Fund may distribute
long-term capital gains in any tax year (unless
and until it receives an exemptive order as
contemplated under "Managed Distribution
Policy" below), which may increase the
variability of the Fund's distributions and
result in certain distributions being comprised
to a larger degree of long-term capital gains
eligible for more favorable income tax
treatment than others. During periods in which
the Fund's strategies do not generate enough
income or result in net losses, a substantial
portion of the Fund's dividends may be
comprised of capital gains from the sale of
securities held by the Fund, which would
involve transaction costs and may also result
in realization of taxable short-term capital
gains taxed at ordinary income tax rates,
particularly during the initial year of the
Fund's operations when all of the Fund's
portfolio securities will have been held for
less than one year.

Managed Distribution Policy. The Investment
Manager has applied to the SEC for an exemptive
order under the Investment Company Act to
permit funds managed by the Investment Manager,
including the Fund, to include realized
long-term capital gains as a part of its
regular distributions to Common Stockholders
more frequently than would otherwise be
permitted by the Investment Company Act
(generally once per taxable year). Under a
managed distribution policy, the Fund would
distribute to Common Stockholders a fixed
quarterly amount, which may be adjusted from
time to time. As with the level distribution
rate policy, distributions would be made only
after paying dividends on Preferred Shares, if
any have been issued, and interest and required
principal payments on borrowings, if any. Under
a managed distribution policy, if, for any
quarterly distribution, net investment company
taxable income and net capital gain were less
than the amount of the distribution, the
difference would be distributed from the Fund's
assets and result in a return of capital.
Common Stockholders who periodically receive
the payment of a dividend or other distribution
consisting entirely or in part of a return of
capital may be under the impression that they
are receiving net profits when they are not.
Common Stockholders should not assume that the
source of a distribution from the Fund is net
profit and should read any written disclosure
accompanying distribution payments carefully.
There can be no assurance that the SEC staff
will process such application by the Investment
Manager for an exemptive order on a timely
basis or ever, or that the SEC will grant the
requested relief or, if granted, that the
Fund's Board will determine to implement or
maintain a managed distribution policy. As a
result, the Fund has no current expectation
that it will be in a position to include
long-term capital gains in Fund distributions
more frequently than is permitted under the
Investment Company Act, thus leaving the Fund
with the possibility of variability in
distributions (and their tax attributes) as
discussed above.

DIVIDEND INVESTMENT PLAN...... Pursuant to the Fund's Dividend Investment Plan
(the "Plan"), unless a Common Stockholder
elects otherwise, all cash dividends, capital
gains distributions, and other distributions
are automatically reinvested in

-6-

additional Common Shares.

Common Stockholders who elect not to
participate in the Plan (including those whose
intermediaries do not permit participation in
the Plan by their customers) will receive all
dividends and distributions payable in cash
directly to the Common Stockholder of record
(or, if the Common Shares are held in street or
other nominee name, then to such nominee) by
[_____], as dividend paying agent. Common
Stockholders may elect not to participate in
the Plan and to receive all distributions of
dividends and capital gains or other
distributions in cash by sending written
instructions to [_____]. Participation in the
Plan may be terminated or resumed at any time
without penalty by written notice if received
by [_____] prior to the record date for the
next distribution. Otherwise, such termination
or resumption will be effective with respect to
any subsequently declared distribution.

Under the Plan, Common Stockholders receive
Common Shares in lieu of cash distributions
unless they have elected otherwise as described
in the preceding paragraph. For all
distributions, shares will be issued in lieu of
cash by the Fund from previously authorized but
unissued Common Shares. If the market price of
a share on the ex-dividend date of such a
distribution is at or above the Fund's net
asset value per share on such date, the number
of shares to be issued by the Fund to each
Common Stockholder receiving shares in lieu of
cash distributions will be determined by
dividing the amount of the cash distribution to
which such Common Stockholder would be entitled
by the greater of the net asset value per share
on such date or 95% of the market price of a
share on such date. If the market price of a
share on such an ex-dividend date is below the
net asset value per share, the number of shares
to be issued to such Common Stockholders will
be determined by dividing such amount by the
per share market price. See "Dividend
Investment Plan."

CLOSED-END FUND STRUCTURE..... Closed-end funds differ from traditional
open-end management investment companies
(commonly referred to as "mutual funds") in
that closed-end funds generally list their
shares for trading on a securities exchange and
do not redeem their shares at the option of the
shareholder. By comparison, mutual funds issue
securities that are redeemable at net asset
value at the option of the shareholder and
typically engage in a continuous offering of
their shares.

Shares of closed-end funds frequently trade at
a discount from their net asset value. In
recognition of this possibility and that such
discount may not be in the interest of Common
Stockholders, the Board, in consultation with
the Investment Manager, from time to time may
review possible actions to reduce any discount.
The Board might consider open market
repurchases or tender offers for Common Shares
at net asset value. There can be no assurance
that the Board will decide to undertake any of
these actions or that, if undertaken, such
actions would result in the Common Shares
trading at a price equal to or close to net
asset value per Common Share. The Board might
also consider the conversion of the Fund to an
open-end mutual fund. The Board believes,
however, that the closed-end structure is
desirable, given the Fund's investment
objectives and polices. Investors should
assume, therefore, that it is highly unlikely
that the Board would vote to convert the Fund
to an open-end management investment company.

TAX ASPECTS................... The Fund intends to elect to be treated as a
regulated investment company (a "RIC") for U.S.
federal income tax purposes. To satisfy the
distribution requirements applicable to RICs
and to avoid corporate level income taxation,

-7-

the Fund intends to make quarterly
distributions so that it distributes all or
substantially all of its net investment income
and realized capital gains, if any, each year
to its stockholders. Please refer to the "Tax
Matters" section of this Prospectus for
additional information on the potential U.S.
federal income tax consequences of the
acquisition, ownership and disposition of
shares of the Fund. You should consult your own
tax advisors regarding any potential state,
local, non-U.S. or other tax consequences of an
investment in the Fund.

LISTING AND SYMBOL............ An application has been made to list the Fund's
Common Shares on the [_____] Exchange under the
trading or "ticker" symbol "[_____]". See
"Description of Shares--Common Shares."

ADMINISTRATIVE SERVICES
AGENT...................... Under an Administrative Services Agreement (the
"Administrative Services Agreement"),
Ameriprise Financial provides, or compensates
others to provide, the Fund with certain
services, including administrative, accounting,
treasury, and other services. The Fund will pay
Ameriprise Financial a fee for providing such
services. Under the Administrative Services
Agreement, the fee will be at the annual rate
of [____]% of the Fund's average daily Managed
Assets.

CUSTODIAN, TRANSFER AGENT,
STOCKHOLDER SERVICE AGENT
AND DIVIDEND PAYING AGENT,
AND BOARD SERVICES
CORPORATION................ [_____] will serve as custodian of the Fund's
assets. [_____] acts as the transfer agent,
stockholder service agent and dividend paying
agent. See "Custodian, Transfer Agent,
Stockholder Servicing Agent and Dividend Paying
Agent."

The funds in the RiverSource Family of Funds,
including the Fund, have an agreement with
Board Services Corporation (Board Services)
located at 901 Marquette Avenue South, Suite
2810, Minneapolis, MN 55402. This agreement
sets forth the terms of Board Services'
responsibility to serve as an agent of the
funds for purposes of administering the payment
of compensation to each independent Board
member, to provide office space for use by the
funds and their boards, and to provide any
other services to the boards or the independent
members, as may be reasonably requested. See
"Board Services Corporation."

SPECIAL RISK CONSIDERATIONS

Newly Organized............... The Fund is a newly organized, non-diversified,
closed-end management investment company with
no history of operations.

Investment Risk............... Investing in the Fund involves certain risks
and the Fund may not be able to achieve its
investment objectives for a variety of reasons,
including, among others, the possibility that
the Fund may not be able to structure the
Options Strategies as anticipated. Because the
value of your investment in the Fund will
fluctuate, there is a risk that you will lose
money. Your investment will decline in value if
the value of the Fund's investments decreases.
The market price of a Common Share may decrease
even though its net asset value increases. The
value of your shares also will be impacted by
the Fund's ability to successfully implement
its investment strategy, as well as by market,
economic and other conditions. As with any
security, complete loss

-8-

of investment is possible.

Equity Securities Risk........ The Fund's portfolio will include equity
securities. An equity security, or stock,
represents a proportionate share of the
ownership of a company. The value of an equity
security is generally based on the success of
the company's business, any income paid to
stockholders, the value of its assets and
general market conditions. Common stocks are an
example of the equity securities in which the
Fund invests. An adverse event, such as an
unfavorable earnings report, may depress the
value of a particular common stock held by the
Fund. Also, the prices of common stocks are
sensitive to general movements in the stock
market and a drop in the stock market may
depress the price of common stocks to which the
Fund has exposure. Common stock prices
fluctuate for several reasons, including
changes to investors' perceptions of the
financial condition of an issuer or the general
condition of the relevant stock market, or when
political or economic events affecting an
issuer occurs. In addition, common stock prices
may be particularly sensitive to rising
interest rate risks, as the cost of capital
rises and borrowing costs increase.

Small-Cap and Mid-Cap
Companies Risk............. The Fund may invest all or a substantial
portion of its assets in companies whose market
capitalization is considered small-or mid-cap.
These companies often are newer or less
established companies than larger companies.
Investments in these companies carry additional
risks because earnings of these companies tend
to be less predictable; they often have limited
product lines, markets, distribution channels
or financial resources; and the management of
such companies may be dependent upon one or a
few key people. The market movements of equity
securities of small-cap and mid-cap companies
may be more abrupt or erratic than the market
movements of equity securities of larger, more
established companies or the stock market in
general. Historically, small-cap and mid-cap
companies have sometimes gone through extended
periods when they did not perform as well as
larger companies. In addition, equity
securities of these companies generally are
less liquid than those 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.

Smaller-company stocks, as a whole, may
experience larger price fluctuations than
large-company stocks or other types of
investments. During periods of investor
uncertainty, investor sentiment may favor
large, well-known companies over small,
lesser-known companies. There may be less
trading in a smaller company's stock, which
means that buy and sell transactions in that
stock could have a larger impact on the stock's
price than is the case with larger company
stocks.

Technology and
Technology-Related
Investment Risk............ The Fund will invest a substantial portion of
its assets in technology and technology-related
companies. The market prices of technology and
technology-related stocks tend to exhibit a
greater degree of market risk and price
volatility than other types of investments.
These stocks may fall in and out of favor with
investors rapidly, which may cause sudden
selling and dramatically lower market prices.
These stocks also may be affected adversely by
changes in technology, consumer and business
purchasing patterns, government regulation
and/or obsolete products or services. In
addition, a rising interest rate environment
tends to negatively affect technology and
technology-related companies. In such an
environment, those

-9-

companies with high market valuations may
appear less attractive to investors, which may
cause sharp decreases in the companies' market
prices. Further, those technology companies
seeking to finance their expansion would have
increased borrowing costs, which may negatively
impact their earnings. As a result, these
factors may negatively affect the performance
of the Fund. The Fund may also be susceptible
to factors affecting the technology and
technology-related industries, and the Fund's
net asset value may fluctuate more than a fund
that invests in wider range of industries.
Technology and technology-related companies are
often smaller and less experienced companies
and may be subject to greater risks than larger
companies, such as limited product lines,
markets and financial and managerial resources.
These risks may be heightened for technology
companies in foreign markets.

Writing Call Options Risk..... A principal aspect of the Fund's investment
strategy involves writing call options on the
NASDAQ 100. This part of the Fund's strategy
subjects the Fund to certain additional risks.
A decision as to whether, when and how to use
options involves the exercise of skill and
judgment, and even a well-conceived transaction
may be unsuccessful to some degree because of
market behavior or unexpected events.

The Fund intends to write call options on the
NASDAQ 100; however, it does not intend to have
a portfolio of securities that mirrors the
securities in the NASDAQ 100 Index. As a
result, during a period when the Fund has
outstanding call options written on the NASDAQ
100, the NASDAQ 100 may appreciate to a greater
extent than the securities in the Fund's
portfolio. If the call options are exercised in
these circumstances, the Fund's loss on the
options will be greater because it will be
paying the option holder not only an amount
representing appreciation on securities in its
own portfolio but also an amount representing
the greater appreciation experienced by the
securities in the NASDAQ 100 Index. The Fund
may also write "naked" or uncovered call
options on individual securities. Losses may be
substantial.

To the extent all or part of the Fund's call
options are covered, the Fund forgoes, during
the option's life, the opportunity to profit
from increases in the market value of the
security underlying the call option above the
sum of the option premium received and the
exercise price of the call, but has retained
the risk of loss, minus the option premium
received, should the price of the underlying
security decline. The writer of an
exchange-listed option on a security has no
control over when during the exercise period of
the option it may be required to fulfill its
obligation as a writer of the option. Once an
option writer has received an exercise notice,
it cannot effect a closing purchase transaction
in order to terminate its obligation under the
option and must deliver the underlying security
at the exercise price. Thus, the use of options
may require the Fund to sell portfolio
securities at inopportune times or for prices
other than current market values, will limit
the amount of appreciation the Fund can realize
above the exercise price of an option on a
common stock, or may cause the Fund to hold a
security that it might otherwise sell.

-10-

The options in the OTC markets may not be as
liquid as exchange-listed options. The Fund may
be limited in the number of counterparties
willing to take positions opposite the Fund or
may find the terms of such counterparties to be
less favorable than the terms available for
listed options. Moreover, OTC options may
provide less favorable tax treatment than
listed options. See "Risks--Writing Call
Options Risk."

Options Risk.................. The Fund intends to engage in transactions in
options on securities, indices, exchange-traded
funds and market baskets of securities on
exchanges and in the OTC markets. In general,
exchange-traded options have standardized
exercise prices and expiration dates and
require the parties to post margin against
their obligations, and the performance of the
parties' obligations in connection with such
options is guaranteed by the exchange or a
related clearing corporation. OTC options have
more flexible terms negotiated between the
buyer and the seller, but generally do not
require the parties to post margin and are
subject to greater credit risk. OTC options
also involve greater liquidity risk.

In addition to writing call options as
described above, the Fund may purchase put
options. By buying a put option, the Fund will
pay a premium to acquire a right to sell the
securities or instruments underlying the put at
the exercise price of the option. The Fund will
lose money if the securities or instruments
underlying the option do not decline in value
below the exercise price of the option by an
amount sufficient to offset the premium paid to
acquire the option. To the extent the Fund
purchases put options in the OTC market, the
Fund will be subject to the credit risk of the
seller of the option. The Fund also may write
put options on the types of securities or
instruments that may be held by the Fund,
provided that such put options are secured by
segregated, liquid instruments. The Fund will
receive a premium for writing a put option,
which increases the Fund's return. In exchange
for the premium received, the Fund has the
obligation to buy the securities or instruments
underlying the option at an agreed upon price
if the securities or instruments decrease below
the exercise price of the option. The Fund will
lose money if the securities or instruments
decrease in value so that the amount the Fund
is obligated to pay the counterparty to the
option to purchase the securities underlying
the option upon exercise of the option exceeds
the value of those securities by an amount that
is greater than the premium received by the
Fund for writing the option.

The Fund may purchase call options on any of
the types of securities or instruments in which
it may invest. In exchange for paying the
option premium, a purchased call option gives
the Fund the right to buy, and obligates the
seller to sell, the underlying security or
instrument at the exercise price. The Fund will
lose money if the securities or instruments
underlying the option do not appreciate in
value in an amount sufficient to offset the
premium paid by the Fund to acquire the option.

Active Management Risk........ The Fund is actively managed and its
performance therefore will reflect in part the
ability of the Investment Manager to select
securities and to make investment decisions
that are suited to achieving the Fund's
investment objectives. Due to its active
management, the Fund could underperform other
funds with similar investment objectives.

General Risks Related to
Derivatives................ In addition to call options or other option
strategies, the Fund may use other derivatives,
such as, among others, total return and other
types of swaps,

-11-

forward contracts, futures and options on
futures and swaps. The Fund's use of
derivatives involves risks different from, and
possibly greater than, the risks associated
with investing directly in the investments
underlying these derivatives. See
"Risks--General Risks Related to Derivatives."

Foreign Securities Risk....... The Fund may invest up to 25% of its Managed
Assets in securities of companies organized
outside the United States. Investments in
foreign securities involve certain risks not
associated with investments in U.S. companies.
Securities markets in certain foreign countries
are not as developed, efficient or liquid as
securities markets in the United States.
Therefore, the prices of foreign securities are
often volatile and trading costs are higher.
Certain foreign countries may impose
restrictions on the ability of issues of
foreign securities to make payments of
principal and interest to investors located
outside the country, due to blockage of foreign
currency exchanges or otherwise. Generally,
there is less publicly available information
about foreign companies due to less rigorous
disclosure or accounting standards and
regulatory practices. In addition, the Fund
will be subject to risks associated with
adverse political and economic developments in
foreign countries, which could cause the Fund
to lose money on its investments in foreign
securities.

The Fund may invest in securities of issuers
located or doing substantial business in
"emerging markets" (lesser developed
countries). Because of the less developed
markets and economics and, in some countries,
less mature governments and governmental
institutions, the risks of investing in foreign
securities can be intensified in the case of
investments in issuers domiciled or doing
substantial business in emerging market
countries. These risks include high
concentration of market capitalization and
trading volume in a small number of issuers
representing a limited number of industries, as
well as a high concentration of investors and
financial intermediaries; political and social
uncertainties; over-dependence on exports,
especially with respect to primary commodities,
making these economies vulnerable to changes in
commodity prices; overburdened infrastructure
and obsolete or unseasoned financial systems;
environmental problems; less developed legal
systems; and less reliable custodial services
and settlement practices.

Preferred Securities Risk..... To the extent the Fund invests in preferred
securities, there are special risks associated
with investing in preferred securities,
including:

Deferral. Preferred securities may include
provisions that permit the issuer, at its
discretion, to defer distributions for a stated
period without any adverse consequences to the
issuer.

Subordination. Preferred securities are
subordinated to bonds and other debt
instruments in a company's capital structure
with respect to priority to corporate income
and liquidation payments, and therefore will be
subject to greater credit risk than more senior
debt instruments.

Liquidity. Preferred securities may be
substantially less liquid than many other
securities, such as common stocks or U.S.
government securities.

Limited Voting Rights. Generally, preferred
security holders have no voting rights with
respect to the issuing company unless preferred
dividends have been in arrears for a specified
number of periods, at which time the preferred
security holders may elect a number of
directors to the issuer's board. Generally,
once all the arrearages have been paid, the
preferred security

-12-

holders no longer have voting rights.

In the case of certain trust preferred
securities, holders generally have no voting
rights, except (i) if the issuer fails to pay
dividends for a specified period of time or
(ii) if a declaration of default occurs and is
continuing. In such an event, rights of holders
of trust preferred securities generally would
include the right to appoint and authorize a
trustee to enforce the trust or special purpose
entity's rights as a creditor under the
agreement with its operating company.

Special Redemption Rights. In certain varying
circumstances, an issuer of preferred
securities may redeem the securities prior to a
specified date. For instance, for certain types
of preferred securities, a redemption may be
triggered by a change in income tax or
securities laws. As with call provisions, a
redemption by the issuer of the preferred
securities may negatively impact the return of
the security held by the Fund.

Foreign Currency Risk......... Although the Fund will report its net asset
value and pay dividends in U.S. dollars,
foreign securities often are purchased with,
and make dividend or interest payments in,
foreign currencies. Therefore, when the Fund
invests in foreign securities, it will be
subject to foreign currency risk, which means
that the Fund's net asset value could decline
as a result of changes in the exchange rates
between foreign currencies and the U.S. dollar.
Certain foreign countries may impose
restrictions on the ability of issuers of
foreign securities to make payments of
principal and interest to investors located
outside the country, due to blockage of foreign
currency exchanges or otherwise.

Interest Rate Risk............ The premiums from writing options and amounts
available from the Fund's option activities may
decrease in declining interest rate
environments. The value of the Fund's portfolio
investments may also be influenced by changes
in interest rates. High-yielding stocks and
stocks of issuers whose businesses are
substantially affected by changes in interest
rates may be particularly sensitive to interest
rate risk.

Counterparty Risk............. Changes in the credit quality of the companies
that serve as the Fund's counterparties with
respect to derivatives, or other transactions
supported by another party's credit will affect
the value of those instruments. Certain
entities that have served as counterparties in
the markets for these transactions have
recently incurred significant financial
hardships including bankruptcy and losses as a
result of exposure to sub-prime mortgages and
other lower quality credit investments that
have experienced recent defaults or otherwise
suffered extreme credit deterioration. As a
result, such hardships have reduced these
entities' capital and called into question
their continued ability to perform their
obligations under such transactions. By using
such derivatives or other transactions, the
Fund assumes the risk that its counterparties
could experience similar financial hardships.
In the event of insolvency of a counterparty,
the Fund may sustain losses or be unable to
liquidate a derivatives position.

Tax Risk...................... The Fund's strategy of writing calls on the
NASDAQ 100 involves complex rules that will
determine for income tax purposes the amount,
character and timing of recognition of the
gains and losses the Fund realizes in
connection therewith. The application of these
special rules would therefore also affect the
character of distributions made by the Fund,
and may increase the amount of taxes payable by
a shareholder as well as accelerate the time
for the

-13-

payment of taxes. See "Tax Matters."

Market Price of Shares; Market
Discount from Net Asset
Value...................... Shares of closed-end management investment
companies frequently trade at a discount from
their net asset value. This characteristic is
separate and distinct from the risk that net
asset value could decrease as a result of
investment activities and may be a greater risk
to investors expecting to sell their shares
relatively soon after completion of this
offering. The Fund cannot predict the level of
trading activity or whether Common Shares will
trade at, above or below net asset value or the
initial public offering price. Common Shares
are designed primarily for long-term investors,
and you should not view the Fund as a vehicle
for trading purposes. See "Risks--Market Price
Discount from Net Asset Value."

Non-Diversified Risk.......... Because the Fund is classified as
"non-diversified" under the Investment Company
Act, it can invest a greater portion of its
assets in obligations of a single issuer than a
"diversified" fund. As a result, the Fund may
be more susceptible than a "diversified" fund
to any single corporate, economic, political or
regulatory occurrence. To mitigate this risk,
the Fund does not anticipate investing more
than 10% of its total assets in the securities
of any one issuer. See "The Fund's
Investments." Moreover, the Fund intends to
diversify its investments to the extent
necessary to maintain its status as a Regulated
Investment Company under the Internal Revenue
Code of 1986, as amended (the "IRC"). See "The
Fund's Investments" and "Risks--Non-Diversified
Risk." See also "Tax Matters."

Anti-Takeover Provisions...... The Fund's Articles of Incorporation (the
"Articles") and Bylaws include provisions that
could limit the ability of other entities or
persons to acquire control of the Fund or
convert the Fund to an "open-end" fund. These
provisions could have the effect of depriving
the Common Stockholders of opportunities to
sell their Common Shares at a price higher than
the then-current market price of Common Shares.
See "Anti-Takeover and Other Provisions in the
Articles of Incorporation" and
"Risks--Anti-Takeover Provisions."

-14-

SUMMARY OF FUND EXPENSES

The purpose of the table and the example below is to help you understand
all fees and expenses that you, as a Common Stockholder, would bear directly or
indirectly. The amount set forth under "Other Expenses" in the table is based
upon estimates for the current fiscal year and assumes the Fund issues
approximately [_____] Common Shares. The Fund's actual expenses may vary from
the estimated expenses shown in the table and from year to year. If the Fund
issues fewer Common Shares, all other things being equal, these expenses would
increase as a percentage of net assets attributable to Common Shares. See
"Management of the Fund."

STOCKHOLDER TRANSACTION EXPENSES
--------------------------------

Sales Load (as a percentage of the offering price)..... [_____]%
Offering Expenses of the Common Shares Borne by
Common Stockholders................................. [_____%(1)]
Dividend Investment Plan Fees.......................... None(2)

PERCENTAGE OF NET ASSETS
ATTRIBUTABLE TO COMMON SHARES
-----------------------------

Annual Expenses
Management Fees........................ [_____]%
Interest Payments on Borrowed Money ... None
Other Expenses(3)...................... [_____]%
Total Annual Expenses(1)............... [_____]%

----------
(1) The Fund will pay its organizational expenses and Common Share offering
costs up to $[_____] per Common Share, and the Investment Manager has
agreed to pay all of the Fund's organizational expenses and Common Share
offering costs (other than sales load) that exceed $[_____] per Common
Share. These offering costs include payment by the Fund to the Underwriters
of $[_____] per Common Share as a partial reimbursement of expenses
incurred in connection with the offering.

(2) You will pay brokerage charges if you direct [_____], as the plan agent
("Plan Agent") for the Fund's Dividend Investment Plan, to sell your Common
Shares held in a dividend investment account. See "Automatic Dividend
Investment Plan."

(3) "Other expenses" includes costs associated with administrative and
accounting services provided by Ameriprise Financial as the Fund's
Administrative Services Agent.

EXAMPLE

The following example illustrates the expenses (including the sales load of
$[_____] and estimated expense of this offering of $[_____]) that you would pay
on a $1,000 investment in Common Shares, assuming (i) "Total Annual Expenses" of
[_____]% for years one through ten and (ii) a 5% annual return(1):

1 Year 3 Years 5 Years 10 Years
------ ------- ------- --------

$_____ $_____ $_____ $_____

----------
(1) THE EXAMPLE ABOVE SHOULD NOT BE CONSIDERED A REPRESENTATION OF FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE HIGHER OR LOWER THAN THOSE SHOWN. The
example assumes that all dividends and distributions are reinvested at net
asset value. Actual expenses may be greater or less than those assumed.
Moreover, the Fund's actual rate of return may be greater or less than the
hypothetical 5% return shown in the example. Examples do not reflect
expenses associated with using Preferred Shares or borrowings. If the Fund
issues Preferred Shares or borrows money, the total annual expense ratio
and total expenses incurred would be greater.

-15-

THE FUND

The Fund is a newly organized, non-diversified, closed-end management
investment company registered under the Investment Company Act. The Fund was
organized as a corporation on [_____], 2009 pursuant to Articles of
Incorporation governed by the laws of the State of Maryland. As a newly
organized entity, the Fund has no operating history. Its principal office is
located at 200 Ameriprise Financial Center, Minneapolis, Minnesota 55474, and
its telephone number is [_____].

USE OF PROCEEDS

The net proceeds of the offering of Common Shares will be approximately
$[_____] ($[_____] if the Underwriters exercise the over-allotment option in
full) after payment of the estimated organizational expenses and offering costs.
The Fund will pay its organizational expenses and Common Share offering costs up
to $[_____] per Common Share, and the Investment Manager has agreed to pay all
of the Fund's organizational expenses and Common Share offering costs (other
than sales load) that exceed $[_____] per Common Share. These offering costs
include payment by the Fund to the Underwriters of $[_____] per Common Share as
a partial reimbursement of expenses incurred in connection with the offering.
The Fund will invest the net proceeds of the offering in accordance with its
investment objectives and policies as stated below. It is currently anticipated
that the Fund will be able to invest substantially all of the net proceeds in
accordance with its investment objectives and policies within three months after
the completion of the offering. Pending such investment, it is anticipated that
the proceeds will be invested in U.S. government securities or high-quality,
short-term money market instruments, including shares of money market funds that
are managed by the Fund's Investment Manager.

THE FUND'S INVESTMENTS

INVESTMENT OBJECTIVES

The Fund's investment objectives are to seek growth of capital and
reasonable current income. There can be no assurance that the Fund will achieve
its investment objectives.

PRINCIPAL STRATEGIES

Under normal market conditions, the Fund's investment program will consist
primarily of (1) investing in a portfolio of equity securities of technology and
technology-related companies that seek to exceed the total return, before fees
and expenses, of the S&P North America Technology Sector Index(R) and (2)
writing call options on the NASDAQ 100 Index(R) or its exchange-traded fund
equivalent (NASDAQ 100) on a continuous basis, typically ranging from 25% to 90%
of the underlying value of the Fund's holdings of common stock.

TECHNOLOGY AND TECHNOLOGY-RELATED COMPANIES. Under normal market
conditions, the Fund intends to invest at least 80% of its "Managed Assets" in a
portfolio of equity securities of technology and technology-related companies
that the Investment Manager believes offer attractive opportunities for capital
appreciation. Technology and technology-related companies are those companies
that use technology extensively to improve their business processes and
applications and may include operating companies in any industry, including but
not limited to software, communications, information and medical technology.

The Fund may invest in companies of any size. Securities of large companies
that are well established in the world technology market can be expected to grow
with the market. Rapidly changing technologies and expansion of technology and
technology-related industries often provide a favorable environment for
companies of small-to-medium size, and the Fund may invest in these companies as
well. Although the Fund will invest primarily in U.S. companies, the Fund may
invest up to 25% of its Managed Assets in companies organized outside of the
United States.

THE OPTIONS STRATEGY. In addition to the Fund's core holdings in technology
and technology-related companies, the Fund will seek to cushion downside
volatility and produce current income by utilizing Option Strategies, primarily
consisting of writing call options on the NASDAQ 100 on a continuous basis,
typically ranging

-16-

from 25% to 90% of the underlying value of the Fund's holdings of common stock.
In determining the level of call options to be written on the NASDAQ 100, the
Investment Manager will evaluate whether premiums are attractive relative to the
risk of the price of the NASDAQ 100 rising above the strike price by more than
the amount of the premium to be received. When premiums on call options on the
NASDAQ 100 are considered by the Investment Manager to be less attractive (i.e.,
very low), the Fund will write such options with respect to a lower percentage
of the Fund's portfolio, typically toward the lower end of the range described
above. Conversely, when premiums on call options on the NASDAQ 100 are
considered by the Investment Manager to be exceptionally attractive (i.e., very
high), the Fund will write such options with respect to a greater percentage of
the Fund's portfolio, typically toward the higher end of the range described
above. To the extent that premiums on call options on the NASDAQ 100 are
considered by the Investment Manager to be neither very high nor very low, the
Investment Manager will adjust the Fund's options exposure accordingly.

The Fund intends to write (sell) NASDAQ 100 call options that are either
exchange-listed or traded OTC. However, index options differ from options on
individual securities (including ETFs) in that index options (i) typically are
settled in cash rather than by delivery of securities and (ii) reflect price
fluctuations in a group of securities or segments of the securities market
rather than price fluctuations in a single security. Compared to call options on
individual stocks (including ETFs), writing call options on the NASDAQ 100 Index
can achieve better tax efficiency because listed options on broad-based
securities indices are "section 1256 contracts" that are subject to more
favorable tax treatment than options on individual stocks. Accordingly, given
this beneficial tax treatment and that index options are typically settled in
cash at expiration (which can be less disruptive to portfolio management), the
Investment Manager will generally prefer to write options on the NASDAQ 100
Index.

As the seller of NASDAQ 100 call options, the Fund will receive cash
(premiums) from options purchasers. The purchaser of an NASDAQ 100 call option
has the right to any appreciation in the value of the NASDAQ 100 over a fixed
price (the exercise price) as of a specified date in the future (the option
valuation date). Generally, the Fund intends to sell NASDAQ 100 call options
that are slightly "out-of-the-money" (i.e., the exercise price generally will be
slightly above the current level of the NASDAQ 100 when the option is sold) and
to close out the position if the Investment Manager believes it is beneficial to
do so. The Fund will in effect, sell the potential appreciation in the value of
the NASDAQ 100 above the exercise price in exchange for the option premium
received. In the case of a written call option on the NASDAQ 100, if the call
option sold by the Fund is exercised, the Fund will pay the purchaser the
difference between the cash value of the NASDAQ 100 and the exercise price of
the option. The premium, the exercise price and the market value of the NASDAQ
100 will determine the gain or loss realized by the Fund as the seller of the
index call option. In the case of a written call option on an ETF, such as the
NASDAQ 100, if the call option is exercised, the Fund will be required to
deliver the number of shares of that ETF (representing the NASDAQ 100) for which
the option was exercised. This is likely to require that the Fund purchase such
shares at prices in excess of the exercise price of the option, meaning that it
is likely that the Fund will incur a loss. Writing call options on the NASDAQ
100 involves a tradeoff between the option premiums received and reduced
participation in potential future stock price appreciation of the Fund's common
stock holdings.

The Fund may also seek to provide downside protection by purchasing puts on
the NASDAQ 100 when premiums on these options are considered by the Investment
Manager to be low and, therefore, attractive relative to the downside protection
provided.

FOREIGN SECURITIES. The Fund, under normal market conditions, may invest up
to 25% of its Managed Assets in equity securities of companies organized outside
of the United States. The Fund may hold foreign securities of emerging market
issuers which may entail additional risks. Since foreign securities often are
purchased with and payable in currencies of foreign countries, the value of
these assets as measured in U.S. dollars may be affected favorably or
unfavorably by changes in currency rates and exchange control regulations.

-17-

COMMON STOCK, PREFERRED STOCK, WARRANTS AND RIGHTS, AND CONVERTIBLE
SECURITIES. As noted above, the Fund, under normal market conditions, will
invest at least 80% of its Managed Assets in equity securities of technology and
technology-related companies.

- Common Stock. Common stock consists of shares of a corporation or
other entity that entitle the holder to a pro rata share of the
profits of the corporation, if any, without preference over any other
class of securities, including such entity's debt securities,
preferred stock and other senior equity securities. Common stock
usually carries with it the right to vote and frequently an exclusive
right to do so.

- Preferred Stock. Preferred stock generally has a preference as to
dividends and liquidation over an issuer's common stock but ranks
junior to debt securities in an issuer's capital structure. Unlike
interest payments on debt securities, preferred stock dividends are
payable only if declared by the issuer's board of directors. Preferred
stock also may be subject to optional or mandatory redemption
provisions. Preferred stock in which the Fund may invest will
generally have no voting rights or their voting rights are limited to
certain extraordinary transactions or events.

- Rights and Warrants. The Fund may invest in common stock rights and
warrants.

- Convertible Securities. A convertible security is a bond, debenture,
note, preferred stock, warrant or other security that may be converted
into or exchanged for a prescribed amount of common stock or other
security of the same or a different issuer or into cash within a
particular period of time at a specified price or formula. A
convertible security generally entitles the holder to receive interest
paid or accrued on debt securities or the dividend paid on preferred
stock until the convertible security matures or is redeemed, converted
or exchanged. Before conversion, convertible securities generally have
characteristics similar to both debt and equity securities. The value
of convertible securities tends to decline as interest rates rise and,
because of the conversion feature, tends to vary with fluctuations in
the market value of the underlying securities. Convertible securities
ordinarily provide a stream of income with generally higher yields
than those of common equity securities of the same or similar issuers.
Convertible securities generally rank senior to common equity
securities in a corporation's capital structure but are usually
subordinated to comparable non-convertible securities. Convertible
securities generally do not participate directly in any dividend
increases or decreases of the underlying securities, although the
market prices of convertible securities may be affected by any
dividend changes or other changes in the underlying securities.

The portion of the Fund's assets invested in common equity, preferred and
convertible securities, as well as rights and warrants, are subject to the
market conditions at the time of such initial investment, the current market
prices of such securities and the Investment Manager's views on the marketplace
for such securities. The Fund's portfolio composition can be expected to vary
over time based on the Investment Manager's assessment of market conditions.

DEBT SECURITIES. Under normal market conditions, the Fund may invest up to
20% of its total assets in debt securities (including convertible and
non-convertible debt securities), such as debt securities issued by technology
and technology-related companies and obligations of the U.S. Government, its
agencies and instrumentalities, and government-sponsored enterprises. As noted
below, the Fund may exceed this limit under certain circumstances during its
initial three months of operation.

- Debt Securities of Technology and Technology-Related Companies. Debt
securities in which the Fund may invest include all types of debt
obligations having varying terms with respect to security or credit
support, subordination, purchase price, interest payments and
maturity. The debt securities in which the Fund may invest may bear
interest at fixed rates or variable rates of interest, and may involve
equity features such as contingent interest or participation based on
revenues, rents or profits. The prices of debt securities generally
vary inversely with interest rates.

-18-

- U.S. Government. Obligations issued or guaranteed by the U.S.
government and its agencies and instrumentalities include bills, notes
and bonds issued by the U.S. Treasury, as well as certain "stripped"
or "zero coupon" U.S. Treasury obligations representing future
interest or principal payments on U.S. Treasury notes or bonds.
Stripped securities are sold at a discount to their "face value" and
may exhibit greater price volatility than interest-bearing securities
since investors receive no payment until maturity. Obligations of
certain agencies and instrumentalities of the U.S. government are
supported by the full faith and credit of the U.S. Treasury; others
are supported by the right of the issuer to borrow from the U.S.
Treasury; others are supported by the discretionary authority of the
U.S. government to purchase the agency's obligations; still others,
though issued by an instrumentality chartered by the U.S. government,
are supported only by the credit of the instrumentality. The U.S.
government may choose not to provide financial support to U.S.
government-sponsored agencies or instrumentalities if it is not
legally obligated to do so. Even where a security is backed by the
full faith and credit of the U.S. Treasury, it does not guarantee the
market price of that security, only the payment of principal and/or
interest.

If interest rates rise, debt security prices generally fall; if interest
rates fall, debt security prices generally rise. Debt securities with longer
maturities generally offer higher yields than debt securities with shorter
maturities assuming all other factors, including credit quality, are equal. For
a given change in interest rates, the market prices of longer-maturity debt
securities generally fluctuate more than the market prices of shorter-maturity
debt securities. This potential for a decline in prices of debt securities due
to rising interest rates is referred to herein as "interest rate risk."

Included among the investment grade quality debt securities in which the
Fund may invest are unrated securities determined by the Investment Manager to
be of comparable quality. In the event that one rating agency assigns an
investment grade rating and another rating agency assigns a below-investment
grade rating to the same debt security, the Investment Manager will determine
which rating it considers more appropriate and categorize the debt security
accordingly. Investment grade quality debt securities are those that have
received ratings of Baa or higher or BBB or higher by Moody's Investors Service,
Inc. ("Moody's"), Standard & Poor's ("S&P") or Fitch Ratings ("Fitch") and
unrated securities determined by the Investment Manager to be of comparable
quality.

BELOW-INVESTMENT GRADE SECURITIES. The debt securities owned by the Fund
may include below-investment grade quality debt securities, commonly referred to
as "junk bonds." The Investment Manager will monitor the credit quality of the
Fund's debt securities. As noted above, the Fund may also invest without limit
in preferred securities including those rated below investment grade or that are
not rated and are considered by the Investment Manager to be of comparable
quality.

Securities that are below-investment grade quality are regarded as having
predominately speculative characteristics with respect to capacity to pay
interest and repay principal. Because the Fund may hold below-investment grade
preferred stock and debt securities, the Fund may hold below-investment grade
quality securities that have a currently identifiable vulnerability to default
on their payments of principal and interest. Such issues may be in default or
there may be present elements of danger with respect to principal or interest.
The Fund will not purchase securities that are in default as to payment of
principal and interest at the time of purchase. For a description of security
ratings, see Appendix A of the SAI.

ILLIQUID SECURITIES. Substantially all of the equity securities of
technology and technology-related companies in which the Fund intends to invest
are traded on a national securities or foreign exchange or in the
over-the-counter markets. The Fund may, however, invest up to [_____]% of its
Managed Assets in illiquid securities (i.e., securities that at the time of
purchase are not readily marketable). These securities may include, but are not
limited to, certain securities that are subject to legal or contractual
restrictions on resale, certain repurchase agreements, and derivative
instruments. To the extent the Fund invests in illiquid or restricted
securities, it may encounter difficulty in determining a market value for the
securities. Disposing of illiquid or restricted securities may involve
time-consuming negotiations and legal expense, and it may be difficult or
impossible for the fund to sell the investment promptly and at an acceptable
price.

In determining the liquidity of all securities and derivatives, such as
Rule 144A securities, which are unregistered securities offered to qualified
institutional buyers, and interest-only and principal-only fixed

-19-

mortgage-backed securities (IOs and POs) issued by the U.S. government or its
agencies and instrumentalities, the Investment Manager, under guidelines
established by the Board, will consider any relevant factors including the
frequency of trades, the number of dealers willing to purchase or sell the
security and the nature of marketplace trades.

Although one or more of the other risks described herein may apply, the
largest risks associated with illiquid and restricted securities include
liquidity risk.

CASH POSITIONS. In anticipation of or in response to adverse market
conditions, for cash management purposes, during a reasonable start-up period
following the completion of this offering or for defensive purposes, the Fund
may temporarily hold all or a portion of its assets in cash or cash equivalents,
money market instruments or bonds or other debt securities. Doing so may help
the Fund minimize losses but may mean lost opportunities for the Fund to achieve
its investment objectives. A reasonable start up period following any offering
would not be expected to exceed three months.

Money market instruments in which the Fund may invest its cash reserves
will generally consist of obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities, repurchase agreements
collateralized by such obligations and commercial paper.

PORTFOLIO TURNOVER. The Fund may actively and frequently trade securities
in its portfolio to carry out its principal strategies. A high portfolio
turnover rate increases transaction costs. Frequent and active trading may cause
adverse tax consequences for investors in the Fund due to an increase in
short-term capital gains. See "Tax Matters."

FUNDAMENTAL AND OTHER INVESTMENT POLICIES

The Fund's investment objectives and policies are non-fundamental and may
be changed by the Fund's Board without approval of the Common Stockholders.
However, the Fund's investment policy of investing at least 80% of its Managed
Assets in equity securities of technology and technology-related companies and
its policy with respect to the use of written call options on the NASDAQ 100 on
a continuous basis may be changed by the Board without stockholder approval only
following the provision of 60 days' prior written notice to Common Stockholders.

INVESTMENT RATIONALE

All investment decisions are made by the Investment Manager's portfolio
managers for the Fund, who are described on page [_____].

The Investment Manager believes that a strategy of owning a portfolio of
equity securities in technology and technology-related companies in conjunction
with writing call options on the NASDAQ 100 should generally provide returns
that are superior to investing in the same or similar stocks without an
associated call option writing program under three different stock market
scenarios: (1) down-trending technology markets; (2) flat market conditions for
technology; and (3) moderately rising technology markets. In the Investment
Manager's opinion, only in more strongly rising technology markets would the
option strategy on the NASDAQ 100 to be used by the Fund generally be expected
to underperform the stock-only portfolio. For these purposes, the Investment
Manager considers more strongly rising equity market conditions to exist
whenever the current annual rate of return for U.S. common stocks of technology
companies (as represented by the NASDAQ 100) exceeds the long-term historical
average of stock market returns. The Investment Manager considers moderately
rising technology market conditions to exist whenever current annual returns on
U.S. common stocks of technology companies are positive, but do not exceed their
long-term historical average.

In addition, the Investment Manager believes that the flexible investment
strategy of using options in a variety of circumstances (whether buying, selling
or writing options on individual securities, indices or otherwise) will permit
the Fund to take advantage of various market conditions. This may include
purchasing put options when such options are considered to be inexpensive or
writing call options when premiums are high.

-20-

RISKS

The Fund is a non-diversified, closed-end management investment company
designed primarily as a long-term investment and not as a trading vehicle. The
Fund is not intended to be a complete investment program, and there can be no
assurance that the Fund will achieve its investment objectives. Your Common
Shares at any point in time may be worth less than the amount you invested, even
after taking into account the reinvestment of Fund dividends and other
distributions.

NEWLY ORGANIZED

The Fund is a newly organized, non-diversified, closed-end management
investment company with no history of operations.

INVESTMENT RISK

Investing in the Fund involves certain risks and the Fund may not be able
to achieve its investments objectives for a variety of reasons, including, among
others, the possibility that the Fund may not be able to structure the Options
Strategies as anticipated. Because the value of your investment in the Fund will
fluctuate, there is a risk that you will lose money. Your investment will
decline in value if the value of the Fund's investments decreases. The market
price of a Common Share may decrease even though its net asset value increases.
The value of your shares also will be impacted by the Fund's ability to
successfully implement its investment strategy, as well as by market, economic
and other conditions. As with any security, complete loss of investment is
possible.

EQUITY SECURITIES RISK

The Fund's portfolio will include equity securities. An equity security, or
stock, represents a proportionate share of the ownership of a company. The value
of an equity security is generally based on the success of the company's
business, any income paid to stockholders, the value of its assets and general
market conditions. Common stocks are an example of the equity securities in
which the Fund invests. An adverse event, such as an unfavorable earnings
report, may depress the value of a particular common stock held by the Fund.
Also, the prices of common stocks are sensitive to general movements in the
stock market and a drop in the stock market may depress the price of common
stocks to which the Fund has exposure. Common stock prices fluctuate for several
reasons, including changes to investors' perceptions of the financial condition
of an issuer or the general condition of the relevant stock market, or when
political or economic events affecting an issuer occurs. In addition, common
stock prices may be particularly sensitive to rising interest rate risks, as the
cost of capital rises and borrowing costs increase.

TECHNOLOGY AND TECHNOLOGY-RELATED INVESTMENT RISK

The Fund will invest a substantial portion of its assets in technology and
technology-related companies. The market prices of technology and
technology-related stocks tend to exhibit a greater degree of market risk and
price volatility than other types of investments. These stocks may fall in and
out of favor with investors rapidly, which may cause sudden selling and
dramatically lower market prices. These stocks also may be affected adversely by
changes in technology, consumer and business purchasing patterns, government
regulation and/or obsolete products or services. In addition, a rising interest
rate environment tends to negatively affect technology and technology-related
companies. In such an environment, those companies with high market valuations
may appear less attractive to investors, which may cause sharp decreases in the
companies' market prices. Further, those technology companies seeking to finance
their expansion would have increased borrowing costs, which may negatively
impact their earnings. As a result, these factors may negatively affect the
performance of the Fund. Finally, the Fund may be susceptible to factors
affecting the technology and technology-related industries, and the Fund's net
asset value may fluctuate more than a fund that invests in wider range of
industries. Technology and technology-related companies are often smaller and
less experienced companies and may be subject to greater risks than larger
companies, such as limited product lines, markets and financial and managerial
resources. These risks may be heightened for technology companies in foreign
markets.

-21-

WRITING CALL OPTIONS RISK

A principal aspect of the Fund's investment strategy involves writing call
options on the NASDAQ 100. This part of the Fund's strategy subjects the Fund to
certain additional risks. A decision as to whether, when and how to use options
involves the exercise of skill and judgment, and even a well-conceived
transaction may be unsuccessful to some degree because of market behavior or
unexpected events.

The Fund intends to write call options on the NASDAQ 100; however, it does
not intend to have a portfolio of securities that mirrors the securities in the
NASDAQ 100 Index. As a result, during a period when the Fund has outstanding
call options written on the NASDAQ 100, the NASDAQ 100 may appreciate to a
greater extent than the securities in the Fund's portfolio. If the call options
are exercised in these circumstances, the Fund's loss on the options will be
greater because it will be paying the option holder not only an amount
representing appreciation on securities in its own portfolio but also an amount
representing the greater appreciation experienced by the securities in the
NASDAQ 100 Index. The Fund may also write "naked" or uncovered call options on
individual securities. Losses may be substantial.

To the extent all or part of the Fund's call options are covered, the Fund
forgoes, during the option's life, the opportunity to profit from increases in
the market value of the security underlying the call option above the sum of the
option premium received and the exercise price of the call, but has retained the
risk of loss, minus the option premium received, should the price of the
underlying security decline. The writer of an exchange-listed option on a
security has no control over when during the exercise period of the option it
may be required to fulfill its obligation as a writer of the option. Once an
option writer has received an exercise notice, it cannot effect a closing
purchase transaction in order to terminate its obligation under the option and
must deliver the underlying security at the exercise price. Thus, the use of
options may require the Fund to sell portfolio securities at inopportune times
or for prices other than current market values, will limit the amount of
appreciation the Fund can realize above the exercise price of an option on a
common stock, or may cause the Fund to hold a security that it might otherwise
sell.

The Fund may be required to sell investments from its portfolio to make
cash settlement (or transfer ownership of a stock or other instrument to
physically settle) on any written call options that are exercised. Such sales
(or transfers) may occur at inopportune times, and the Fund may incur
transaction costs that increase the expenses borne by Common Stockholders. In
addition, the Fund may sell written call options in the OTC market. The options
in the OTC markets may not be as liquid as exchange listed options. The Fund may
be limited in the number of counterparties willing to take positions opposite
the Fund or may find the terms of such counterparties to be less favorable than
the terms available for listed options. Moreover, OTC options may provide less
favorable tax treatment than listed options.

The value of options may be adversely affected if the market for such
options becomes less liquid or smaller. There can be no assurance that a liquid
market will exist when the Fund seeks to close out an option position, in the
case of a call option written, by buying the option. Reasons for the absence of
a liquid secondary market on an exchange include the following: (i) there may be
insufficient trading interest in certain options; (ii) restrictions may be
imposed by an exchange on opening transactions or closing transactions or both;
(iii) trading halts, suspensions or other restrictions may be imposed with
respect to particular classes or series of options; (iv) unusual or unforeseen
circumstances may interrupt normal operations on an exchange; (v) the facilities
of an exchange or the Options Clearing Corporation ("OCC") may not at all times
be adequate to handle current trading volume; or (vi) one or more exchanges
could, for economic or other reasons, decide or be compelled to discontinue the
trading of options (or a particular class or series of options) at some future
date. If trading were discontinued, the secondary market on that exchange (or in
that class or series of options) would cease to exist. However, outstanding
options on that exchange that had been issued by the OCC as a result of trades
on that exchange would continue to be exercisable in accordance with their
terms. The Fund's ability to terminate over-the-counter options will be more
limited than with exchange-traded options and may involve the risk that
broker-dealers participating in such transactions will not fulfill their
obligations.

The hours of trading for options may not conform to the hours during which
the underlying securities are traded. To the extent that the options markets
close before the markets for the underlying securities, significant price and
rate movements can take place in the underlying markets that would not be
reflected concurrently in the options markets. Call options are marked to market
daily and their value will be affected by changes in the value of

-22-

and dividend rates of the underlying common stocks, changes in interest rates,
changes in the actual or perceived volatility of the stock market and the
underlying common stocks and the remaining time to the options' expiration.
Additionally, the exercise price of an option may be adjusted downward before
the option's expiration as a result of the occurrence of certain corporate
events affecting the underlying equity security, such as extraordinary
dividends, stock splits, merger or other extraordinary distributions or events.
A reduction in the exercise price of an option would reduce the Fund's capital
appreciation potential on the underlying security.

The Fund's options transactions will be subject to limitations established
by each of the exchanges, boards of trade or other trading facilities on which
such options are traded. These limitations govern the maximum number of options
in each class which may be written or purchased by a single investor or group of
investors acting in concert, regardless of whether the options are written or
purchased on the same or different exchanges, boards of trade or other trading
facilities or are held or written in one or more accounts or through one or more
brokers. Thus, the number of options which the Fund may write or purchase may be
affected by options written or purchased by other investment advisory clients of
the Investment Manager. An exchange, board of trade or other trading facility
may order the liquidation of positions found to be in excess of these limits,
and may impose certain other sanctions. The Fund may write "naked" or uncovered
call options on individual securities.

OPTIONS RISK

The Fund intends to engage in transactions in options on securities,
indices, exchange-traded funds and market baskets of securities on exchanges and
in the OTC markets. In general, exchange-traded options have standardized
exercise prices and expiration dates and require the parties to post margin
against their obligations, and the performance of the parties' obligations in
connection with such options is guaranteed by the exchange or a related clearing
corporation. OTC options have more flexible terms negotiated between the buyer
and the seller, but generally do not require the parties to post margin and are
subject to greater credit risk. OTC options also involve greater liquidity risk.

In addition to writing call options as described above, the Fund may
purchase put options. By buying a put option, the Fund will pay a premium to
acquire a right to sell the securities or instruments underlying the put at the
exercise price of the option. The Fund will lose money if the securities or
instruments underlying the option do not decline in value below the exercise
price of the option by an amount sufficient to offset the premium paid to
acquire the option. To the extent the Fund purchases put options in the OTC
market, the Fund will be subject to the credit risk of the seller of the option.
The Fund also may write put options on the types of securities or instruments
that may be held by the Fund, provided that such put options are secured by
segregated, liquid instruments. The Fund will receive a premium for writing a
put option, which increases the Fund's return. In exchange for the premium
received, the Fund has the obligation to buy the securities or instruments
underlying the option at an agreed upon price if the securities or instruments
decrease below the exercise price of the option. The Fund will lose money if the
securities or instruments decrease in value so that the amount the Fund is
obligated to pay the counterparty to the option to purchase the securities
underlying the option upon exercise of the option exceeds the value of those
securities by an amount that is greater than the premium received by the Fund
for writing the option.

The Fund may purchase call options on any of the types of securities or
instruments in which it may invest. In exchange for paying the option premium, a
purchased call option gives the Fund the right to buy, and obligates the seller
to sell, the underlying security or instrument at the exercise price. The Fund
will lose money if the securities or instruments underlying the option do not
appreciate in value in an amount sufficient to offset the premium paid by the
Fund to acquire the option.

GENERAL RISKS RELATED TO DERIVATIVES

In addition to call options or other option strategies, the Fund may use
other derivatives, such as, among others, total return and other types of swaps,
forward contracts, futures and options on futures and swaps. The Fund's use of
derivatives involves risks different from, and possibly greater than, the risks
associated with investing directly in the investments underlying these
derivatives.

Derivatives may be volatile and involve significant risk, such as, among
other things, credit risk, currency risk, leverage risk and liquidity risk. They
also involve the risk of mispricing or improper valuation and correlation

-23-

risk (i.e., the risk that changes in the value of the derivative may not
correlate perfectly, or to any degree, with the underlying asset, interest rate
or index). Using derivatives can disproportionately increase losses and reduce
opportunities for gains when security prices, indices, currency rates or
interest rates are changing in unexpected ways. The Fund may suffer
disproportionately heavy losses relative to the amount of its investments in
derivative contracts.

Changes in the value of derivative contracts may not match or offset fully
changes in the values of the underlying portfolio securities, indices or rates.
The Fund's investments in derivatives could result in the Fund losing more than
the principal amount invested. The use of derivatives may also increase the
amount of taxes payable by Common Stockholders as well as accelerate the time
for the payment of taxes. Also, suitable derivative transactions may not be
available in all circumstances. In addition, derivatives can make the Fund's
assets less liquid and harder to value, especially in declining markets.

FOREIGN SECURITIES RISK

The Fund may invest up to 25% of its Managed Assets in securities of
companies organized outside the United States. Investments in foreign securities
involve certain risks not associated with investments in U.S. companies.
Securities markets in certain foreign countries are not as developed, efficient
or liquid as securities markets in the United States. Therefore, the prices of
foreign securities are often volatile and trading costs are higher. Certain
foreign countries may impose restrictions on the ability of issues of foreign
securities to make payments of principal and interest to investors located
outside the country, due to blockage of foreign currency exchanges or otherwise.
Generally, there is less publicly available information about foreign companies
due to less rigorous disclosure or accounting standards and regulatory
practices. In addition, the Fund will be subject to risks associated with
adverse political and economic developments in foreign countries, which could
cause the Fund to lose money on its investments in foreign securities.

The Fund may invest in securities of issuers located or doing substantial
business in "emerging markets" (lesser developed countries). Because of the less
developed markets and economics and, in some countries, less mature governments
and governmental institutions, the risks of investing in foreign securities can
be intensified in the case of investments in issuers domiciled or doing
substantial business in emerging market countries. These risks include high
concentration of market capitalization and trading volume in a small number of
issuers representing a limited number of industries, as well as a high
concentration of investors and financial intermediaries; political and social
uncertainties; over-dependence on exports, especially with respect to primary
commodities, making these economies vulnerable to changes in commodity prices;
overburdened infrastructure and obsolete or unseasoned financial systems;
environmental problems; less developed legal systems; and less reliable
custodial services and settlement practices.

FOREIGN CURRENCY RISK

Although the Fund will report its net asset value and pay dividends in U.S.
dollars, foreign securities often are purchased with, and make dividend or
interest payments in, foreign currencies. Therefore, when the Fund invests in
foreign securities, it will be subject to foreign currency risk, which means
that the Fund's net asset value could decline as a result of changes in the
exchange rates between foreign currencies and the U.S. dollar. Certain foreign
countries may impose restrictions on the ability of issuers of foreign
securities to make payments of principal and interest to investors located
outside the country, due to blockage of foreign currency exchanges or otherwise.

INTEREST RATE RISK

The premiums from writing options and amounts available from the Fund's
option activities may decrease in declining interest rate environments. The
value of the Fund's portfolio investments may also be influenced by changes in
interest rates. High-yielding stocks and stocks of issuers whose businesses are
substantially affected by changes in interest rates may be particularly
sensitive to interest rate risk.

-24-

COUNTERPARTY RISK

Changes in the credit quality of the companies that serve as the Fund's
counterparties with respect to derivatives, or other transactions supported by
another party's credit will affect the value of those instruments. Certain
entities that have served as counterparties in the markets for these
transactions have recently incurred significant financial hardships including
bankruptcy and losses as a result of exposure to sub-prime mortgages and other
lower quality credit investments that have experienced recent defaults or
otherwise suffered extreme credit deterioration. As a result, such hardships
have reduced these entities' capital and called into question their continued
ability to perform their obligations under such transactions. By using such
derivatives or other transactions, the Fund assumes the risk that its
counterparties could experience similar financial hardships. In the event of
insolvency of a counterparty, the Fund may sustain losses or be unable to
liquidate a derivatives position.

TAX RISK

The Fund's strategy of writing calls on the NASDAQ 100 involves complex
rules that will determine for income tax purposes the amount, character and
timing of recognition of the gains and losses the Fund realizes in connection
therewith. The application of these special rules would therefore also affect
the character of distributions made by the Fund, and may increase the amount of
taxes payable by a shareholder as well as accelerate the time for the payment of
taxes. See "Tax Matters."

RISKS OF BELOW-INVESTMENT GRADE QUALITY SECURITIES

Below-investment grade quality securities are regarded as having
predominantly speculative characteristics with respect to capacity to pay
interest and repay principal and may be more susceptible to real or perceived
adverse economic and competitive industry conditions than higher-grade
securities. The prices of such securities have been found to be less sensitive
to interest rate changes than higher-quality investments but more sensitive to
adverse economic downturns or individual corporate or industry developments.
Yields on investment grade securities tend to fluctuate. If an issuer of
lower-rated securities defaults, the Fund may incur additional expenses to seek
recovery.

The secondary markets in which below-investment grade securities are traded
may be less liquid than the market for higher-grade securities. Less liquidity
in the secondary trading markets could adversely affect the price at which the
Fund could sell a particular below-investment grade security when necessary to
meet liquidity needs or in response to a specific economic event, such as a
deterioration in the creditworthiness of the issuer, and could adversely affect
and cause large fluctuations in the net asset value of Common Shares. The
valuation of securities that are illiquid or that trade infrequently often
require the exercise of greater judgment. Adverse publicity and investor
perceptions may significantly impact the values and liquidity of
below-investment grade securities.

It is reasonable to expect that any adverse economic conditions could
disrupt the market for below-investment grade securities, have an adverse impact
on the value of such securities, and adversely affect the ability of the issuers
of such securities to repay principal and pay interest thereon. In addition, new
laws and proposed new laws may have an adverse impact on the market for
below-investment grade securities.

NEW TYPES OF SECURITIES

From time to time, new types of securities have been, and may in the future
be, offered that have features other than those described in this Prospectus.
The Fund reserves the right to invest in these securities if the Investment
Manager believes that doing so would be in the best interest of the Fund's
stockholders in a manner consistent with the Fund's investment objectives and
policies. Since the market for these instruments will be new, the Fund may have
difficulty disposing of them at a suitable price and time. In addition to
limited liquidity, these instruments may present other risks, such as high price
volatility.

CONVERTIBLE SECURITIES RISK

Although to a lesser extent than with non-convertible fixed-income
securities, the market value of convertible securities tends to decline as
interest rates increase and, conversely, tends to increase as interest rates

-25-

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. A unique feature of convertible securities is that
as the market price of the underlying common stock declines, convertible
securities tend to trade increasingly on a yield basis, and so may not
experience market value declines to the same extent as the underlying common
stock. When the market price of the underlying common stock increases, the
prices of the convertible securities tend to rise as a reflection of the value
of the underlying common stock. While no securities investments are without
risk, investments in convertible securities generally entail less risk than
investments in common stock of the same issuer.

MARKET PRICE OF SHARES; MARKET DISCOUNT FROM NET ASSET VALUE

Shares of closed-end management investment companies frequently trade at a
discount from their net asset value. This characteristic is separate and
distinct from the risk that net asset value could decrease as a result of
investment activities and may be a greater risk to investors expecting to sell
their shares relatively soon after completion of this offering. The net asset
value of the Common Shares will be reduced immediately following the offering as
a result of the payment of the sales load and all of the Fund's organizational
and Common Share offering costs up to and including $[_____] per Common Share.
The net asset value of Common Shares will be further reduced by the underwriting
fees. Whether an investor will realize gain or loss on the sale of Common Shares
will depend not on the Fund's net asset value but on whether the market price of
the Common Shares at the time of sale is above or below the investor's purchase
price for the Common Shares. The market price of the Common Shares will be
determined by factors such as relative supply of and demand for the Common
Shares in the market, general market and economic conditions, and other factors
beyond the Fund's control. The Fund cannot predict the level of trading activity
or whether Common Shares will trade at, above or below net asset value or the
initial public offering price. Common Shares are designed primarily for
long-term investors, and you should not view the Fund as a vehicle for trading
purposes.

RESTRICTED AND ILLIQUID SECURITIES RISK

The Fund may invest, on an ongoing basis, in restricted securities and
other investments that may be illiquid. Illiquid securities are securities that
are not readily marketable and may include some restricted securities, which are
securities that may not be resold to the public without an effective
registration statement under the Securities Act of 1933, as amended, or, if they
are unregistered, may be sold only in a privately negotiated transaction or
pursuant to an exemption from registration. Investments in illiquid securities
involve the risk that the securities will not be able to be sold at the time
desired by the Fund or at prices approximating the value at which the Fund is
carrying the securities on its books.

INFLATION RISK

Inflation risk is the risk that the value of assets or income from
investments will be worth less in the future as inflation decreases the value of
money. As inflation increases, the real value of the Common Shares and
distributions can decline.

DEFLATION RISK

Deflation risk is the risk that the Fund's dividends may be reduced in the
future as lower prices reduce interest rates and earning power, resulting in
lower distributions on the assets owned by the Fund being redeemed by their
issuers.

NON-DIVERSIFIED RISK

Because the Fund is classified as "non-diversified" under the Investment
Company Act, it can invest a greater portion of its assets in obligations of a
single issuer than a "diversified" fund. As a result, the Fund may be more
susceptible than a "diversified" fund to any single corporate, economic,
political or regulatory occurrence. To mitigate this risk, the Fund does not
anticipate investing more than 10% of its total assets in the securities of any
one issuer. See "The Fund's Investments." Moreover, the Fund intends to
diversify its investments to the extent necessary to maintain its status as a
Regulated Investment Company under the IRC. See "Tax Matters."

-26-

ANTI-TAKEOVER PROVISIONS

The Fund's Articles and Bylaws include provisions that could limit the
ability of other entities or persons to acquire control of the Fund or convert
the Fund to an "open-end" fund. These provisions could have the effect of
depriving the Common Stockholders of opportunities to sell their Common Shares
at a price higher than the then-current market price of Common Shares. See
"Anti-Takeover and Other Provisions in the Articles of Incorporation."

PORTFOLIO TURNOVER RISK

The Fund may actively and frequently trade securities in its portfolio to
carry out its principal strategies. A high portfolio turnover rate increases
transaction costs. Frequent and active trading may cause adverse tax
consequences for investors in the Fund due to an increase in short-term capital
gains. The Fund's portfolio turnover rate will not be a limiting factor when the
Fund deems it desirable to sell or purchase securities.

LIQUIDITY/LISTING OF FUND'S SHARES

Although the Fund has obtained authorization to list its shares, subject to
notice of issuance, on the [_____] Exchange, there is currently no public market
for the Fund's shares and there can be no assurance that an active public market
will develop or be sustained after completion of this offering. There also is no
assurance that the Fund will be able to maintain the listing of its shares on
the [_____] Exchange.

SMALL-CAP AND MID-CAP COMPANIES RISK

The Fund may invest all or a substantial portion of its assets in companies
whose market capitalization is considered small- or mid-cap. These companies
often are newer or less established companies than larger companies. Investments
in these companies carry additional risks because earnings of these companies
tend to be less predictable; they often have limited product lines, markets,
distribution channels or financial resources; and the management of such
companies may be dependent upon one or a few key people. The market movements of
equity securities of small-cap and mid-cap companies may be more abrupt or
erratic than the market movements of equity securities of larger, more
established companies or the stock market in general. Historically, small-cap
and mid-cap companies have sometimes gone through extended periods when they did
not perform as well as larger companies. In addition, equity securities of these
companies generally are less liquid than those 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.

Smaller-company stocks, as a whole, may experience larger price
fluctuations than large-company stocks or other types of investments. During
periods of investor uncertainty, investor sentiment may favor large, well-known
companies over small, lesser-known companies. There may be less trading in a
smaller company's stock, which means that buy and sell transactions in that
stock could have a larger impact on the stock's price than is the case with
larger company stocks.

PREFERRED SECURITIES RISK

To the extent the Fund invests in preferred securities, there are special
risks associated with investing in preferred securities, including:

Deferral. Preferred securities may include provisions that permit the
issuer, at its discretion, to defer distributions for a stated period without
any adverse consequences to the issuer.

Subordination. Preferred securities are subordinated to bonds and other
debt instruments in a company's capital structure with respect to priority to
corporate income and liquidation payments, and therefore will be subject to
greater credit risk than more senior debt instruments.

-27-

Liquidity. Preferred securities may be substantially less liquid than many
other securities, such as common stocks or U.S. government securities.

Limited Voting Rights. Generally, preferred security holders have no voting
rights with respect to the issuing company unless preferred dividends have been
in arrears for a specified number of periods, at which time the preferred
security holders may elect a number of directors to the issuers board.
Generally, once all the arrearages have been paid, the preferred security
holders no longer have voting rights.

In the case of certain trust preferred securities, holders generally have
no voting rights, except (i) if the issuer fails to pay dividends for a
specified period of time or (ii) if a declaration of default occurs and is
continuing. In such an event, rights of holders of trust preferred securities
generally would include the right to appoint and authorize a trustee to enforce
the trust or special purpose entity's rights as a creditor under the agreement
with its operating company.

Special Redemption Rights. In certain varying circumstances, an issuer of
preferred securities may redeem the securities prior to a specified date. For
instance, for certain types of preferred securities, a redemption may be
triggered by a change in income tax or securities laws. As with call provisions,
a redemption by the issuer of the preferred securities may negatively impact the
return of the security held by the Fund.

LEVERAGE RISK

Although it has no present intention to do so, the Fund may use leverage to
increase its investments or for other management activities. The Fund may borrow
money from banks in amounts up to 331/3% of the value of its total assets to
finance additional investments. In addition, the Fund may issue preferred stock
to the extent permitted under the Investment Company Act. The use of leverage
creates certain risks for the Fund's Common Stockholders, including the greater
likelihood of higher volatility of the Fund's return, its net asset value and
the market price of the Fund's shares. Changes in the value of the Fund's total
assets will have a disproportionate effect on the net asset value per share when
leverage is used. For example, if the Fund were to use leverage equal to 50% of
the Fund's common stock equity, it would show an approximately 1.5% increase or
decline in net asset value for each 1% increase or decline in the value of its
total assets. An additional risk of leverage is that the cost of the leverage
plus applicable Fund expenses may exceed the return on the transactions
undertaken with the proceeds of the leverage, thereby diminishing rather than
enhancing the return to the Fund's Common Stockholders. These risks generally
would make the Fund's return to stockholders more volatile if it were to use
leverage. The Fund also may be required to sell investments in order to make
interest payments on borrowings used for leverage when it may be disadvantageous
to do so.

Because the fees received by the Investment Manager are based on the
Managed Assets of the Fund (including assets attributable to any Preferred
Shares and borrowings that may be outstanding), the Investment Manager has a
financial incentive for the Fund to issue Preferred Shares or use borrowings,
which may create a conflict of interest between the Investment Manager, on the
one hand, and the Common Stockholders on the other hand.

SHORT-TERM INVESTMENTS

The Fund may, from time to time, manage its cash (for purposes such as
paying fees and expenses) by investing all or a part of its assets in
short-term, high quality fixed-income securities and money market instruments,
including shares of money market funds managed by the Fund's Investment Manager,
or in cash and cash equivalents. These types of investments typically have a
lower yield than other longer term investments and lack the capital appreciation
potential of equity securities. In addition, while these investments are
generally designed to limit the Fund's losses, they can prevent the Fund from
achieving its investment objectives.

ASSET SEGREGATION

When the Fund enters into certain transactions that involve obligations to
make future payments to third parties that are not otherwise covered, including,
but not limited to, swap contracts, the purchase of securities on

-28-

when-issued or delayed delivery basis, forward contracts, futures or reverse
repurchase agreements, it will segregate cash or liquid securities in a manner
consistent with the positions articulated by the SEC and its staff.

GENERAL ECONOMIC AND MARKET CONDITIONS

The success of the Fund's activities may be affected by general economic
and market conditions, such as interest rates, availability of credit, inflation
rates, economic uncertainty, changes in laws, and national and international
political circumstances. These factors may affect the level and volatility of
security prices and liquidity of the Fund's investments. Unexpected market
volatility or changes in liquidity could impair the Fund's profitability or
result in its suffering losses.

POWER TO CLASSIFY AND ISSUE ADDITIONAL STOCK

The Fund's charter authorizes the Fund to issue additional shares of common
stock. The Board of Directors also may classify or reclassify any unissued
shares of common stock, and may set the preferences, rights and other terms of
the classified or reclassified shares. The Board may, without any action by its
Common Stockholders, amend the charter from time to time to increase or decrease
the aggregate number of shares of stock or the number of shares of stock of any
class or series that the Fund has authority to issue. See "Description of
Shares."

-29-

MANAGEMENT OF THE FUND

DIRECTORS AND OFFICERS

The Fund's Board of Directors is broadly responsible for the management of
the Fund, including general supervision of the duties performed by RiverSource
Investments. The names and business addresses of the Directors and officers of
the Fund and their principal occupations and other affiliations during the past
five years are set forth under the heading "Management of the Fund" contained in
the SAI.

INVESTMENT MANAGER

RiverSource Investments, LLC, 200 Ameriprise Financial Center, Minneapolis,
Minnesota 55474, is the investment manager to the Fund, 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 Fund, 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 SAI
for more information.

PORTFOLIO MANAGERS

The Fund's portfolio is managed by RiverSource Investments and headed by
the portfolio managers for the Fund: Paul Wick, Ajay Diwan and John K.
Schonberg, CFA. Messrs. Wick and Diwan are responsible for the day-to-day
investment decisions relating to the Fund's portfolio holdings, with primary
day-to-day investment decisions relating to the NASDQ-100 options strategy
provided by Mr. Schonberg. In addition to managing the Fund, Messrs. Wick and
Diwan provide portfolio management services for certain mutual funds, private
funds and offshore funds, including those that invest a substantial portion of
their assets in technology and technology-related companies and those that use
long and short strategies.

Mr. Wick is the head of the Seligman Technology Group of RiverSource
Investments. Mr. Wick began his investment career in 1987 when he joined J. & W.
Seligman & Co. Incorporated ("Seligman") as an Associate, Investment Research.
During his Seligman career, he became Vice President, Investment Officer in
1991, Managing Director in 1995 and a member of Seligman's Board of Directors in
1997. Mr. Wick holds a B.A. in Economics from Duke University and an M.B.A. in
Finance from Duke University's Fuqua School of Business.

Mr. Diwan, a member of the Seligman Technology Group of RiverSource
Investments, began his investment career in 1992 and joined Seligman in 2001,
where he was Managing Director. Mr. Diwan holds a B.S. in Electrical Engineering
and Applied Physics from Case Western Reserve University and an M.B.A. in
Finance from Columbia University.

Mr. Wick and Mr. Diwan joined RiverSource Investments in November 2008 in
connection with RiverSource Investments' acquisition of Seligman and each is
based at the Investment Manager's Menlo Park, California office.

Mr. Schonberg is a portfolio manager of the Fund, primarily responsible for
providing the NASDAQ 100 options strategy to the Fund. Mr. Schoenberg also
provides portfolio management services for certain mutual funds and private
funds. Mr. Schoenberg joined RiverSource Investments in 1997 and is based at the
Investment Manager's Minnesota office. He began his investment career in 1988.
He holds a B.S. from the University of Nebraska.

-30-

MANAGEMENT

Pursuant to an Investment Management Services Agreement dated [_____]
between RiverSource Investments and the Fund (the "Management Agreement"), the
Fund has agreed to pay RiverSource Investments a management fee, payable on a
monthly basis, at the annual rate equal to [_____]% of the Fund's average daily
Managed Assets for the services it provides (the "Management Fee").

In addition to the Management Fee, the Fund will pay all other costs and
expenses of its operations, including the compensation of its Directors (other
than those affiliated with RiverSource Investments), custodial expenses,
transfer agency and dividend disbursing expenses, legal fees, expenses of
independent auditors, expenses of repurchasing shares, listing fees, expenses of
preparing, printing and distributing Prospectuses, stockholder reports, notices,
proxy statements and reports to governmental agencies, and taxes, if any.

The basis for the Board of Director's initial approval of the Fund's
Management Agreement will be provided in the Fund's initial stockholder report.
The basis for subsequent continuations of the Fund's Management Agreement will
be provided in annual or semi-annual reports to Common Stockholders for the
periods during which such continuations occur.

Under an Administrative Services Agreement between Ameriprise Financial and
the Fund, Ameriprise Financial provides, or compensates others to provide, the
Fund with certain services, including administrative, accounting, treasury and
other services. The Fund will pay Ameriprise Financial a fee for providing such
services. Under the Administrative Services Agreement, the fee will be at the
annual rate of [_____]% of the Fund's average daily Managed Assets.

-31-

NET ASSET VALUE

The net asset value per share ("NAV") of the Fund's Common Shares is
determined by dividing the total value of the Fund's net assets by the total
number of shares outstanding. The Fund's net assets are determined by
subtracting any liabilities (including borrowings for leverage) from the total
value of its portfolio investments and other assets. The Fund's net assets are
available to holders of Preferred Shares (if any) and Common Stock. If any
Preferred Shares are outstanding, net assets available for the Common
Stockholders is determined by deducting from net assets the liquidation
preference and any accrued dividends on the Preferred Shares. Net asset value
per share is determined by dividing the net assets available for the Common
Stockholders by the number of Common Shares outstanding. Common Shares are
valued as of a particular time (the "Valuation Time") which is normally at the
close of regular trading on the New York Stock Exchange (normally 4:00 p.m.,
Eastern time) (the "NYSE Close"). In unusual circumstances, the Fund's Board may
determine that the Valuation Time shall be as of 4:00 p.m., Eastern time,
notwithstanding an earlier, unscheduled close or halt of trading on the New York
Stock Exchange.

Securities are valued primarily on the basis of market quotations. Market
quotations 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 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 the 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 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 the Fund has
significant holdings of foreign securities or small- or mid-cap stocks that may
trade infrequently, fair valuation may be used more frequently than for other
funds. The Fund uses an unaffiliated service provider to assist in determining
fair values for foreign securities.

Foreign investments are valued in U.S. dollars. Some of the Fund's
portfolio 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 Common Shares may change on days when Common Stockholders will not be
able to purchase or sell the Fund's shares.

-32-

DISTRIBUTIONS

INITIAL DISTRIBUTION

The Fund's initial distribution is expected to be declared approximately 60
days after the completion of the offering, and paid approximately 40 days later,
depending upon market conditions. Thereafter distributions are expected to be
declared quarterly (each March, June, September and December), depending on
market conditions.

LEVEL RATE DISTRIBUTION POLICY

Commencing with the Fund's first distribution, the Fund intends to make
quarterly cash distributions to Common Stockholders at a rate that reflects the
past and projected performance of the Fund. The Fund expects to receive all or
some of its current income and gains from the following sources: (i) dividends
received by the Fund that are paid on the equity and equity-related securities
in its portfolio; and (ii) capital gains (short-term and long-term) from the
sale of portfolio securities and option premiums. Distributions would be made
only after paying dividends on Preferred Shares, if any have been issued, and
interest and required principal payments on borrowings, if any. It is possible
that the Fund's distributions will at times exceed the earnings and profits of
the Fund and therefore all or a portion of such distributions may constitute a
return of capital as described below.

Distributions may be variable, and the Fund's distribution rate will depend
on a number of factors, including the net earnings on the Fund's portfolio
investments and the rate at which such net earnings change as a result of
changes in the timing of and rates at which the Fund receives income from the
sources described above. The net investment income of the Fund consists of all
income (other than net short-term and long-term capital gains) less all expenses
of the Fund.

As portfolio and market conditions change, the rate of dividends on the
Common Shares and the Fund's distribution policy could change. Over time, the
Fund will distribute all of its net investment income and net short-term capital
gains. In addition, at least annually, the Fund intends to distribute any net
capital gain (which is the excess of net long term capital gain over net short
tem capital loss) or, alternatively, to retain all or a portion of the year's
net capital gain and pay federal income tax on the retained gain. As provided
under federal law, Common Stockholders of record as of the end of the Fund's
taxable year will include their attributable share of the retained gain in their
income for the year as a long term capital gain and will be entitled to a tax
credit or refund for the tax deemed paid on their behalf by the Fund. The Fund
may treat the cash value of tax credit and amounts refunded in connection with
retained capital gains as a substitute for equivalent cash distributions. The
Investment Company Act currently limits the number of times the Fund may
distribute long-term capital gains in any tax year (unless and until it receives
an exemptive order as contemplated under "Managed Distribution Policy" below),
which may increase the variability of the Fund's distributions and result in
certain distributions being comprised to a larger degree of long-term capital
gains eligible for more favorable income tax treatment than others. During
periods in which the Fund's strategies do not generate enough income or result
in net losses, a substantial portion of the Fund's dividends may be comprised of
capital gains from the sale of securities held by the Fund, which would involve
transaction costs and may also result in realization of taxable short-term
capital gains taxed at ordinary income tax rates particularly during the initial
year of the Fund's operations when all of the Fund's portfolio securities will
have been held for less than one year.

MANAGED DISTRIBUTION POLICY

The Investment Manager has applied to the SEC for an exemptive order under
the Investment Company Act to permit funds managed by the Investment Manager,
including the Fund, to include realized long-term capital gains as a part of its
regular distributions to Common Stockholders more frequently than would
otherwise be permitted by the Investment Company Act (generally once per taxable
year).

Under a managed distribution policy, the Fund would distribute to Common
Stockholders a fixed quarterly amount, which may be adjusted from time to time.
As with the level distribution rate policy, distributions would be made only
after paying dividends on Preferred Shares, if any have been issued, and
interest and required principal payments on borrowings, if any. Under a managed
distribution policy, if, for any quarterly distribution, net

-33-

investment company taxable income and net capital gain were less than the amount
of the distribution, the difference would be distributed from the Fund's assets
and result in a return of capital.

There can be no assurance that the SEC staff will process such application
by the Investment Manager for an exemptive order on a timely basis or ever, or
that the SEC will grant the requested relief or, if granted, that the Fund's
Board will determine to implement or maintain a managed distribution policy. As
a result, the Fund has no current expectation that it will be in a position to
include long-term capital gains in Fund distributions more frequently than is
permitted under the Investment Company Act, thus leaving the Fund with the
possibility of variability in distributions (and their tax attributes) as
discussed above.

Common Stockholders who periodically receive the payment of a dividend or
other distribution consisting entirely or in part of a return of capital may be
under the impression that they are receiving net profits when they are not.
Common Stockholders should not assume that the source of a distribution from the
Fund is net profit and should read any written disclosure accompanying
distribution payments carefully.

The Board of the Fund reserves the right to change the distribution policy
from time to time.

-34-

DIVIDEND INVESTMENT PLAN

Pursuant to the Fund's Dividend Investment Plan (the Plan), unless a Common
Stockholder elects otherwise, all cash dividends, capital gains distributions,
and other distributions are automatically reinvested in additional Common
Shares. Common Stockholders who elect not to participate in the Plan (including
those whose intermediaries do not permit participation in the Plan by their
customers) will receive all dividends and distributions payable in cash directly
to the Common Stockholder of record (or, if the Common Shares are held in street
or other nominee name, then to such nominee) by [_____], as dividend paying
agent. Common Stockholders may elect not to participate in the Plan and to
receive all distributions of dividends and capital gains or other distributions
in cash by sending written instructions to [_____]. Participation in the Plan
may be terminated or resumed at any time without penalty by written notice if
received by [_____] prior to the record date for the next distribution.
Otherwise, such termination or resumption will be effective with respect to any
subsequently declared distribution.

Under the Plan, Common Stockholders receive Common Shares in lieu of cash
distributions unless they have elected otherwise as described in the preceding
paragraph. For all distributions, shares will be issued in lieu of cash by the
Fund from previously authorized but unissued Common Shares. If the market price
of a share on the ex-dividend date of such a distribution is at or above the
Fund's net asset value per share on such date, the number of shares to be issued
by the Fund to each Common Stockholder receiving shares in lieu of cash
distributions will be determined by dividing the amount of the cash distribution
to which such Common Stockholder would be entitled by the greater of the net
asset value per share on such date or 95% of the market price of a share on such
date. If the market price of a share on such an ex-dividend date is below the
net asset value per share, the number of shares to be issued to such Common
Stockholders will be determined by dividing such amount by the per share market
price. Market price on any day means the closing price for the Common Shares at
the close of regular trading on the [_____] Stock Exchange on such day or, if
such day is not a day on which the Common Shares trades, the closing price for
the Common Shares at the close of regular trading on the immediately preceding
day on which trading occurs.

Common Stockholders who hold their shares in the name of a broker or other
nominee should contact such broker or other nominee to discuss the extent to
which such nominee will permit their participation in the Plan. The Fund will
administer the Plan on the basis of the number of shares certified from time to
time by nominees as representing the total amount of shares held through such
nominees by beneficial Common Stockholders who are participating in such Plan
and by delivering shares on behalf of such beneficial Common Stockholders to the
nominees' accounts at The Depository Trust Company.

[_____] will maintain all Common Stockholders' accounts in the Plan not
held by The Depository Trust Company and furnish written confirmation of all
transactions in the account, including information needed by Common Stockholders
for tax records. Shares in the account of each Plan participant will be held in
non-certificated form in the name of the participant, and each Common
Stockholder's proxy will include those shares purchased or received pursuant to
the Plan.

The Fund currently intends to make open market purchases of its Common
Shares from time to time, when the Fund is trading at a discount to NAV, in an
amount approximately sufficient to offset the growth in the number of its shares
of Common Shares attributable to the reinvestment of the portion of its
distributions to Common Stockholders that are attributable to distributions
received from portfolio investments less Fund expenses. Assets of the Fund used
to repurchase Common Shares are not available for investment in accordance with
the Fund's investment objectives and strategies.

The Fund reserves the right to amend or terminate the Plan as applied to
any distribution paid subsequent to written notice of the change sent to
participants in the Plan at least 90 days before the record date for such
distribution. There are no service or brokerage charges to participants in the
Plan; however, the Fund reserves the right to amend the Plan to include a
service charge payable to the Fund by the participants. The Fund also reserves
the right to amend the Plan to provide for payment of brokerage fees by Plan
participants in the event the Plan is changed to provide for open market
purchases of Common Shares on behalf of Plan participants. All correspondence
concerning the Plan should be directed to [_____], [_____].

-35-

DESCRIPTION OF SHARES

The following description of the terms of the Fund's stock is only a
summary. For a complete description, please refer to the Maryland General
Corporation Law ("MGCL"), and the Fund's charter and Bylaws. The charter and
Bylaws are exhibits to the Registration Statement, of which this prospectus
forms a part.

GENERAL

The Fund's charter provides that the Fund may issue up to 1,000,000,000
shares of common stock, $0.01 par value per share. A majority of the entire
Board of Directors may, without any action by the Fund's Common Stockholders,
amend the charter from time to time to increase or decrease the aggregate number
of shares of stock or the number of shares of stock of any class or series that
the Fund has authority to issue. Under Maryland law, the Common Stockholders
generally are not liable for the Fund's debts or obligations.

COMMON STOCK

All of the Common Shares offered by this prospectus will be duly
authorized, fully paid and nonassessable. Common Stockholders are entitled to
receive distributions when authorized by the Board and declared by the Fund out
of assets legally available for the payment of distributions. They also are
entitled to share ratably in the assets legally available for distribution to
the Fund's Common Stockholders in the event of the Fund's liquidation,
dissolution or winding up, after payment of, or adequate provision for, all of
the Fund's known debts and liabilities. These rights are subject to the
preferential rights of any other class or series of the Fund's stock.

Each outstanding Common Share entitles the holder to one vote on all
matters submitted to a vote of the Common Stockholders, including the election
of Directors. Except as provided with respect to any other class or series of
stock, holders of Common Shares will possess the exclusive voting power. All of
the Common Shares will have equal dividend, liquidation and other rights. There
is no cumulative voting in the election of Directors, which means that the
holders of a majority of the outstanding Common Shares can elect all of the
Directors then standing for election, and the holders of the remaining shares
will not be able to elect any Directors.

Holders of Common Shares have no preference, conversion, exchange, sinking
fund, or appraisal rights and have no preemptive rights to subscribe for any of
the Fund's securities.

POWER TO RECLASSIFY SHARES OF THE FUND'S STOCK

The Fund's charter authorizes the Board to classify and reclassify any
unissued Common Shares into other classes or series of stock, including
Preferred Shares. Before issuing shares of each new class or series, the Board
is required by Maryland law and by the Fund's charter to set the terms,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to dividends or other distributions, qualifications and terms or
conditions of redemption of the class and series.

POWER TO ISSUE ADDITIONAL SHARES OF COMMON STOCK

The Fund believes that the power to issue additional shares of Common
Shares and to classify or reclassify unissued shares of Common Shares and
thereafter to issue the classified or reclassified shares provides the Fund with
increased flexibility in meeting needs of the Fund that might arise. These
actions can be taken without Common Stockholder approval, unless Common
Stockholder approval is required by applicable law or the rules of any stock
exchange or automated quotation system on which the Fund's securities may be
listed or traded. Although the Fund has no present intention of doing so, the
Fund could issue a class or series of stock that could delay, defer or prevent a
transaction or a change in control of the Fund that might involve a premium
price for Common Stockholders or otherwise be in its best interests.

-36-

BORROWINGS AND PREFERRED SHARES

Although the Fund does not currently intend to issue senior securities such
as Preferred Shares or debt instruments, the Fund is permitted, without prior
approval of the Common Stockholders, to borrow money and issue Preferred Shares.
The Fund may issue notes or other evidence of indebtedness (including bank
borrowings or commercial paper) and may secure any such borrowings by
mortgaging, pledging or otherwise subjecting the Fund's assets as security. In
connection with such borrowing, the Fund may be required to maintain minimum
average balances with the lender or to pay a commitment or other fee to maintain
a line of credit. Any such requirements will increase the cost of borrowing over
the stated interest rate.

LIMITATIONS. Borrowings by the Fund are subject to certain limitations
under the Investment Company Act, including the amount of asset coverage
required. In addition, agreements related to the borrowings may also impose
certain requirements, which may be more stringent than those imposed by the
Investment Company Act. See "Use of Financial Leverage" and "Risks--Financial
Leverage Risk."

DISTRIBUTION PREFERENCE. The rights of lenders to the Fund to receive
interest on, and repayment of, principal of any such borrowings will be senior
to those of the Common Stockholders, and the terms of any such borrowings may
contain provisions which limit certain activities of the Fund, including the
payment of dividends to Common Stockholders in certain circumstances.

VOTING RIGHTS. In certain circumstances, the Investment Company Act grants
the Fund's lenders certain voting rights in the event of default in the payment
of interest on, or repayment of, principal. In the event that such provisions
would impair the Fund's status as a regulated investment company under the IRC,
the Fund, subject to its ability to liquidate its portfolio holdings, intends to
repay the borrowings. Any borrowings will likely be ranked senior or equal to
all other existing and future borrowings of the Fund.

The discussion above describes the Board's present intention with respect
to a possible offering of Preferred Shares or borrowings. If the Board
determines to authorize any of the foregoing, the terms may be the same as, or
different from, the terms described above, subject to applicable law and the
Articles.

PREFERRED SHARES. The Fund is authorized under the Investment Company Act
to issue Preferred Shares in an amount up to 50% of its Managed Assets. "Managed
Assets" means the total assets of the Fund, minus the sum of its accrued
liabilities (other than Fund liabilities incurred for the express purpose of
creating financial leverage). Total assets for this purpose shall include assets
attributable to the Fund's use of financial leverage (whether or not those
assets are reflected in the Fund's financial statements for purposes of
generally accepted accounting principles). Preferred Shares generally pay fixed
or floating rate dividends to investors, and have a "preference" over common
stock in the payment of dividends and the liquidation of a company's assets.
This means that a company must pay dividends on preferred securities before
paying any dividends on its common stock. Preferred security holders usually
have no right to vote for corporate directors or on other matters.

It is not the Fund's current intention to issue Preferred Shares. However,
the Fund may determine at a subsequent time to issue Preferred Shares, subject
to market conditions, in an aggregate amount limited to approximately [ ]% of
its Managed Assets (including the proceeds of the leverage) as valued
immediately after the issuance of Preferred Shares in order to purchase
additional securities of technology and technology-related companies and other
securities as described herein.

The Preferred Shares would have priority over Common Shares and other
non-Preferred Shares upon distribution of assets. Although the timing and other
terms of the offering of Preferred Shares and the terms of the Preferred Shares
would be determined by the Fund's Board of Directors, the Fund expects to invest
the proceeds of any Preferred Shares offering in accordance with its investment
objectives. So long as the Fund's portfolio is invested in securities that
provide a higher level of income than the dividend rate of the Preferred Shares,
after taking expenses into consideration, the leverage will cause you to receive
higher distributions than if the Fund were not leveraged.

-37-

The Fund intends to apply for ratings on any Preferred Shares it may issue
from one or more nationally recognized ratings agencies. The Fund believes that
obtaining a rating for Preferred Shares will enhance the marketability of the
Preferred Shares and thereby reduce the dividend rate on the Preferred Shares
from that which the Fund would be required to pay if the Preferred Shares were
not rated. The rating agencies for any Preferred Shares may require asset
coverage maintenance ratios not imposed by the Investment Company Act. The
ability of the Fund to comply with such asset coverage maintenance ratios may be
subject to circumstances beyond control of the Fund such as market conditions
for its portfolio securities. It is expected that the terms of any Preferred
Shares will provide for mandatory redemption of the Preferred Shares in the
event the Fund fails to meet such asset coverage maintenance ratios. In such
circumstances, the Fund may have to liquidate portfolio securities in order to
meet redemption requirements. This would have the effect of reducing the NAV to
Common Stockholders.

Under the Investment Company Act, the holders of Preferred Shares, voting
as a class, must have the right to elect at least two directors at all times,
and, subject to the prior rights, if any, of the holders of any other class of
senior securities outstanding, to elect a majority of the directors if at any
time dividends on such class of securities shall be unpaid in an amount equal to
two full years' dividends on such securities, and to continue to be so
represented until all dividends in arrears shall have been paid or otherwise
provided for. In addition, the vote of a majority of the Preferred Shares,
voting as a class, is required to approve any plan of reorganization adversely
affecting the Preferred Shares, or any action requiring a vote of security
holders pursuant to Section 13(a) of the Investment Company Act, including,
among other things, changes in the Fund's subclassification as a closed-end
investment company or changes in its fundamental investment policies. In
addition, in the discretion of the Board, subject to the Investment Company Act,
the terms of any Preferred Shares may also provide for the vote of up to 66 2/3%
of the class regarding certain transactions involving a merger, sale of assets
or liquidation of the Fund, or conversion of the Fund to open-end status and
other matters. See "Description of Securities", "Anti-Takeover and Other
Provisions of the Maryland General Corporation Law and the Fund's Charter and
Bylaws" and "Repurchase of Common Shares; Conversion to Open-End Fund."

The issuance of any Preferred Shares will entail certain initial costs and
expenses such as underwriting discounts, fees associated with the registration
of the Preferred Shares with the SEC, filings under state securities laws,
rating agency fees, legal and accounting fees, printing costs and certain other
ongoing expenses such as administrative and accounting fees. These costs and
expenses will be borne by the Fund and will reduce net assets available to
Common Stockholders.

Under the Investment Company Act, the Fund is not permitted to issue
Preferred Shares unless immediately after such issuance the value of the Fund's
Managed Assets less certain ordinary course liabilities is at least 200% of the
sum of the liquidation value of the outstanding Preferred Shares plus any
indebtedness for leverage purposes (i.e., the liquidation value may not exceed
50% of the sum of the Fund's net assets plus any indebtedness incurred for
leverage purposes). In addition, the Fund is not permitted to declare any cash
dividend or other distribution on its Common Shares or repurchase any of its
Common Shares unless the Fund satisfies the asset coverage requirements
described in the previous sentence immediately after giving effect to such
declaration or repurchase. If Preferred Shares are issued, the Fund intends, to
the extent possible, to purchase or redeem Preferred Shares from time to time to
the extent necessary to maintain coverage of any Preferred Shares of at least
200%. In addition, as a condition to obtaining ratings on the Preferred Shares,
the terms of any Preferred Shares issued are expected to include asset coverage
maintenance provisions which will require a reduction of indebtedness or the
redemption of the Preferred Shares in the event of non-compliance by the Fund
and may also prohibit dividends and other distributions on the Common Shares in
such circumstances. In order to meet redemption requirements, the Fund may have
to liquidate portfolio securities. Such liquidations and redemptions, or
reductions in indebtedness, would cause the Fund to incur related transaction
costs and could result in capital losses to the Fund. Prohibitions on dividends
and other distributions on the Common Shares could impair the Fund's ability to
qualify as a regulated investment company under the Investment Company Act.

-38-

ANTI-TAKEOVER AND OTHER PROVISIONS OF THE MARYLAND GENERAL
CORPORATION LAW AND THE FUND'S CHARTER AND BYLAWS

The MGCL and the Fund's charter and Bylaws contain provisions that could
make it more difficult for a person or group of persons to acquire control of
the Fund or to convert the Fund to open-end status by means of a tender offer,
proxy contest or otherwise. Certain of these provisions are intended to preserve
the Fund's status as a closed-end investment company and to discourage certain
coercive takeover practices, inadequate takeover bids and attempts to cause the
Fund to liquidate or convert to an open-end investment company. These provisions
could have the effect of depriving Common Stockholders of the opportunity to
sell their shares at a premium over the then-current market price of Common
Shares by discouraging a third party from seeking to obtain control of the Fund
or from taking action intended to result in the open-ending or liquidation of
the Fund or discouraging the implementation of measures that may result in a
temporary or long-term reduction in any market discount.

ELECTION OF DIRECTORS. The Fund's charter provides that, except as provided
in the Fund's Bylaws, each director will be elected by the holders of a majority
of the Common Shares outstanding and entitled to vote thereon. This means that
the holders of less than a majority of the outstanding Common Shares will not be
able to elect any directors. If no nominee receives the required vote to be
elected, the incumbent nominees will continue to serve as the Fund's directors
until the next annual meeting of Common Stockholders and until their successors
are duly elected and qualify. The Board of Directors may amend the Bylaws to
alter the vote required to elect directors.

QUALIFICATIONS OF DIRECTORS. The Fund's charter and Bylaws provide that,
each director, and each nominee for election as a director (other than a current
director on the date of this prospectus), at the time of his or her nomination
and election, shall be a Common Stockholder of the Fund or a beneficial owner of
Common Shares.

CLASSIFICATION OF THE BOARD OF DIRECTORS. Pursuant to the Fund's charter,
the Board of Directors is divided into three classes of directors. The initial
terms of the first, second and third classes will expire in 2011, 2012 and 2013,
respectively. Beginning at the Fund's annual meeting in 2011, upon the
expiration of their current terms, directors of each class will be elected for
three-year terms and each year one class of directors will be elected by the
Common Stockholders.

The classified board provision could have the effect of making the
replacement of incumbent directors more time-consuming and difficult. At least
two annual meetings of Common Stockholders, instead of one, will generally be
required to effect a change in a majority of the Board of Directors. The
staggered terms of directors may delay, defer or prevent a tender offer or an
attempt to change control of the Fund. The Fund believes that classification of
the Board of Directors will help to assure the continuity and stability of the
Fund's strategies and policies as determined by the Board of Directors.

REMOVAL OF DIRECTORS. The Fund's charter provides that a director may be
removed only for cause and only by the affirmative vote of at least 75 percent
of the votes entitled to be cast in the election of directors. This provision,
when coupled with the provisions in the Fund's charter and Bylaws authorizing
only the Board of Directors to fill vacant directorships, precludes Common
Stockholders from removing incumbent directors except for cause and by a
substantial affirmative vote and filling the vacancies created by the removal
with their own nominees.

CERTAIN EXTRAORDINARY TRANSACTIONS; AMENDMENTS TO THE FUND'S CHARTER AND
BYLAWS. Under Maryland law, a Maryland corporation such as the Fund generally
cannot dissolve, amend its charter, merge, sell all or substantially all of its
assets, engage in a share exchange or engage in similar transactions outside the
ordinary course of business, unless advised by the Board of Directors and
approved by the affirmative vote of Common Stockholders entitled to cast at
least two-thirds of the votes entitled to be cast on the matter. A Maryland
corporation may, however, provide in its charter for approval of these matters
by a different percentage, but not less than a majority of all of the votes
entitled to be cast on the matter. Subject to certain exceptions described
below, the Fund's charter provides for approval of charter amendments by the
holders of a majority of the votes entitled to be cast on the matter.

The Fund's charter provides that the liquidation or dissolution of the
Fund, any merger, consolidation, share exchange or sale or exchange of all or
substantially all of the assets of the Fund that requires the approval of

-39-

the Fund's Common Stockholders under the MGCL, certain transactions between the
Fund and any person or group of persons acting together and any person
controlling, controlled by or under common control with any such person or
member of such group, that may exercise or direct the exercise of 10% or more of
the voting power of the Fund, any amendment to the Fund's charter that would
convert the Fund from a closed-end investment company to an open-end investment
company or otherwise make the Fund's Common Shares a redeemable security and any
amendment to certain provisions of the Fund's charter, including the provisions
relating to the Fund's business as a closed-end management investment company
and the number, qualifications, classification, election and removal of
directors, requires the approval of the Common Stockholders entitled to cast at
least 80% of the votes entitled to be cast on such matter. If such a proposal is
approved by at least two-thirds of the Fund's Continuing Directors (in addition
to approval by the full Board of Directors), however, such proposal may be
approved by the Common Stockholders entitled to cast a majority of the votes
entitled to be cast on such matter. The "Continuing Directors" are defined in
the Fund's charter as the Fund's current Directors as well as those Directors
whose nomination for election by the Common Stockholders or whose election by
the Directors to fill vacancies is approved by a majority of Continuing
Directors then on the Board of Directors. This provision could make it more
difficult for certain extraordinary transactions to be approved if they are
opposed by the Continuing Directors, and discourage proxy contests for control
of the Fund's Board by persons wishing to cause such transactions to take place.

The Fund's charter and Bylaws provide that the Board of Directors will have
the exclusive power to adopt, alter or repeal any provision of the Fund's Bylaws
or to make new Bylaws.

QUORUM. The MGCL provides that the presence of Common Stockholders entitled
to cast a majority of all the votes entitled to be cast at a meeting of Common
Stockholders constitutes a quorum unless the law or the charter provides
otherwise. The Fund's charter contains this majority requirement for a quorum
but specifies that the Bylaws may provide otherwise, within a limited range of
one-third to two-thirds of the votes entitled to be cast on the matter.
Currently, the Fund's Bylaws provide that the presence of Common Stockholders
entitled to cast a majority of all the votes entitled to be cast at a meeting of
Common Stockholders constitutes a quorum. However, because the Bylaws may be
amended only by the Board of Directors, the Board of Directors has the power to
specify a quorum requirement other than a majority of the votes entitled to be
cast at the meeting.

ADVANCE NOTICE OF DIRECTOR NOMINATIONS AND NEW BUSINESS. The Fund's Bylaws
provide that, with respect to an annual meeting of Common Stockholders,
nominations of persons for election to the Board of Directors and the proposal
of business to be considered by Common Stockholders may be made only (i)
pursuant to the Fund's notice of the meeting, (ii) by the Board of Directors or
(iii) by a Common Stockholder who is entitled to vote at the meeting and who has
complied with the advance notice procedures of the Bylaws. With respect to
special meetings of Common Stockholders, only the business specified in the
Fund's notice of the meeting may be brought before the meeting. Nominations of
persons for election to the Board of Directors at a special meeting may be made
only (i) pursuant to the Fund's notice of the meeting, (ii) by the Board of
Directors, or (iii) provided that the Board of Directors has determined that
directors will be elected at the meeting, by a Common Stockholder who is
entitled to vote at the meeting and who has complied with the advance notice
provisions of the Bylaws.

-40-

REPURCHASE OF COMMON SHARES; TENDER OFFERS; CONVERSION TO OPEN-END FUND

The Fund is a closed-end management investment company and, as such, its
Common Stockholders will not have the right to cause the Fund to redeem their
shares. Instead, the Common Shares will trade in the open market at a price that
will be a function of several factors, including financial leverage, dividend
levels (which are in turn affected by expenses), net asset value, call
protection, dividend stability, portfolio credit quality, relative demand for
and supply of such shares in the market, general market and economic conditions
and other factors. Shares of a closed-end management investment company may
frequently trade at prices lower than net asset value. The Board of Directors
will regularly monitor the relationship between the market price and net asset
value of the Common Shares. If the Common Shares were to trade at a substantial
discount to net asset value for an extended period of time, the Board of
Directors may consider the repurchase of its Common Shares on the open market or
in private transactions, the making of a tender offer for such shares, or the
conversion of the Fund to an open-end management investment company. The Fund
cannot assure you that its Board of Directors will decide to take or propose any
of these actions, or that share repurchases or tender offers will actually
reduce market discount.

If the Fund converted to an open-end management investment company, it
would be required to redeem all Preferred Shares then outstanding (requiring in
turn that it liquidate a portion of its investment portfolio), and the Common
Shares would be de-listed from the [_____] Stock Exchange. In contrast to a
closed-end management investment company, stockholders of an open-end management
investment company may require the company to redeem their shares at any time
(except in certain circumstances as authorized by or under the Investment
Company Act) at their net asset value, less any redemption charge that is in
effect at the time of redemption.

Before deciding whether to take any action to convert the Fund to an
open-end management investment company, the Board of Directors would consider
all relevant factors, including the extent and duration of the discount, the
liquidity of the Fund's portfolio, the impact of any action that might be taken
on the Fund or its stockholders, and market considerations. Based on these
considerations, even if the Common Shares should trade at a discount, the Board
of Directors may determine that, in the interest of the Fund and its
stockholders, no action should be taken. See the SAI under "Repurchase of Common
Shares; Tender Offers; Conversion to Open-end Fund" for a further discussion of
possible action to reduce or eliminate such discount to net asset value.

-41-

TAX MATTERS

As with any investment, you should consider how your investment in shares
will be taxed. The tax information in this Prospectus is provided as general
information. You should consult your own tax adviser about the tax consequences
of an investment in Common Shares.

Unless your investment in the shares is made through a tax-exempt entity or
tax-deferred retirement account, such as an Individual Retirement Account
("IRA"), you need to be aware of the possible tax consequences when the Fund
makes distributions or you sell your Common Shares.

TAXES ON DISTRIBUTIONS

Dividends from net investment income, if any, are declared and paid
quarterly. While the Fund intends to make quarterly level distributions, it is
possible that the Fund may also pay a special distribution at the end of the
calendar year to comply with federal tax requirements. In general, your
distributions are subject to federal income tax when they are paid, whether you
take them in cash or reinvest them in the Fund. Dividends paid out of the Fund's
income and net short-term capital gains, if any, are taxable as ordinary income.
Distributions of net long-term capital gains, if any, in excess of net
short-term capital losses are taxable as long-term capital gains, regardless of
how long you have held your Common Shares.

Long-term capital gains of non-corporate taxpayers are generally taxed at a
maximum rate of 15% for taxable years beginning before January 1, 2011.
Qualified dividends for these taxable years paid by the Fund to non-corporate
shareholders may qualify for taxation at the lower tax rates applicable to
long-term capital gains, provided that certain conditions are met. The Fund does
not expect to earn a significant amount of such qualified dividends.

Distributions in excess of the Fund's current and accumulated earnings and
profits are treated as a tax-free return of capital to the extent of your basis
in your Common Shares, and as capital gain thereafter. A distribution will
reduce the Fund's net asset value per Common Share and may be taxable to you as
ordinary income or capital gain even though, from an investment standpoint, the
distribution may constitute a return of capital.

Some of the Fund's investments and positions may be subject to special tax
rules that may change the normal treatment of income, gains and losses
recognized by the Fund (for example, the calls written by the Fund on the NASDAQ
100, investments in futures transactions or non-U.S. corporations classified as
"passive foreign investment companies"). Those special tax rules can, among
other things, affect the treatment of capital gain or loss as long-term or
short-term and may result in ordinary income or loss rather than capital gain or
loss. The application of these special rules would therefore also affect the
character of distributions made by the Fund, and may increase the amount of
taxes payable by Common Stockholders.

Each January, you will be sent information on the tax status of any
distributions made during the previous calendar year. Because each Common
Stockholder's situation is unique, you should always consult your tax adviser
concerning the effect income taxes may have on your individual investment.

The securities in which the Fund invest may not provide complete tax
information to the Fund as to the tax character of the dividends distributed by
such company (e.g., income, capital gain or return of capital) until after the
calendar year end. Consequently, because of such delay, it may be necessary for
the Fund to request permission to extend the deadline for the issuance of a Form
1099-DIV until after January 31 or to issue a revised Form 1099-DIV after
January 31. Further, the tax treatment of distributions reported on Form
1099-DIV may differ from the characterization of distributions provided at the
time the distribution was made

TAXES ON SALES OF SHARES

When you sell your Common Shares, any gain or loss you realize will
generally be treated as a long-term capital gain or loss if you held your Common
Shares for more than one year, or as a short-term capital gain or loss if you
held your Common Shares for one year or less. The ability to deduct capital
losses may be limited. However, if

-42-

you sell your Common Shares on which a long-term capital gain distribution has
been received (or on which amounts have been designated as undistributed capital
gains) and you held the shares for six months or less, any loss you realize will
be treated as a long-term capital loss to the extent of the long-term capital
gain distribution.

The foregoing discussion summarizes some of the possible consequences under
current federal tax law of an investment in the Fund. It is not a substitute for
personal tax advice. You may also be subject to state and local taxation on Fund
distributions, and sales of Common Shares. Consult your personal tax adviser
about the potential tax consequences of an investment in the Common Shares under
all applicable tax laws.

-43-

UNDERWRITING

The Underwriters, acting through [_____], as lead manager and [_____] as
their representatives (the "Representatives"), have severally agreed, subject to
the terms and conditions of the underwriting agreement with the Fund and the
Investment Manager (the "Underwriting Agreement"), to purchase from the Fund the
number of Common Shares set forth below opposite their respective names.

Number of
Underwriters Common Shares
------------ -------------

Total.......
=============

-44-

The underwriting agreement provides that the obligations of the
Underwriters to purchase the Common Shares included in this offering are subject
to approval of legal matters by counsel and to other conditions. The
Underwriters are obligated to purchase all the shares of Common Shares (other
than those covered by the over-allotment option described below) if they
purchase any of the shares of Common Shares.

The Underwriters propose to offer some of the Common Shares directly to the
public at the public offering price set forth on the cover page of this
prospectus and some of the Common Shares to dealers at the public offering price
less a concession not to exceed $[_____] per share. The sales load the Fund will
pay of $[_____] per share is equal to [_____]% of the initial offering price.
The Underwriters may allow, and dealers may reallow, a concession not to exceed
$[_____] per share on sales to other dealers. If all of the Common Stock is not
sold at the initial offering price, the representative may change the public
offering price and other selling terms. Investors must pay for any Common Shares
purchased on or before[_____]. The representative has advised the Fund that the
Underwriters do not intend to confirm any sales to any accounts over which they
exercise discretionary authority.

The Fund has granted to the Underwriters an option, exercisable for 45 days
from the date of this prospectus, to purchase up to [_____] additional Common
Shares at the public offering price less the sales load. The Underwriters may
exercise the option solely for the purpose of covering over-allotments, if any,
in connection with this offering. To the extent the option is exercised, each
Underwriter will be obligated, subject to certain conditions, to purchase a
number of additional Common Shares approximately proportionate to such
Underwriter's initial purchase commitment.

[The Fund and the Investment Manager have agreed that, for a period of 180
days from the date of this prospectus, the Fund will not, without the prior
written consent of [_____], on behalf of the Underwriters, dispose of or hedge
any Common Shares or any securities convertible into or exchangeable for Common
Shares, provided that the Fund may issue and sell Common Shares pursuant to the
Fund's Dividend Investment Plan. [_____] in its sole discretion, may release any
of the securities subject to these lock-up agreements at any time without
notice.]

Prior to this offering, there has been no public market for the Common
Shares. Consequently, the initial public offering price for the Common Shares
was determined by negotiation among the Fund, the Investment Manager and the
representative. There can be no assurance, however, that the price at which the
Common Shares will sell in the public market after this offering will not be
lower than the initial public offering price or that an active trading market in
the Common Shares will develop and continue after this offering. The Common
Shares have been authorized for listing on the [_____] Exchange, subject to
official notice of issuance, under the ticker symbol "[_____]."

The following table shows the sales load that the Fund will pay to the
Underwriters in connection with this offering. These amounts are shown assuming
both no exercise and full exercise of the Underwriters' option to purchase
additional shares of Common Shares.

PAID BY FUND
---------------------------
NO EXERCISE FULL EXERCISE
----------- -------------

Per Share....... $[_____] $[_____]
Total........... $[_____] $[_____]

The total expenses of the Common Share offering paid by the Fund (which do
not include the sales load) are estimated to be $[_____], or $[_____] assuming
full exercise of the over-allotment option, which represents $[_____] per Common
Share issued. The Fund will pay its organizational expenses and Common Share
offering costs up to $[_____] per Common Share, and the Investment Manager has
agreed to pay all of the Fund's organizational expenses and Common Share
offering costs (other than sales load) that exceed $[_____] per Common Share.
These offering costs include payment by the Fund to the Underwriters of $[_____]
per Common Share as a partial reimbursement of expenses incurred in connection
with the offering.

The Investment Manager (and not the Fund) has agreed to pay to [_____],
from its own assets, a structuring fee for advice relating to the structure,
design and organization of the Fund as well as services related to the sale and

-45-

distribution of the Fund's Common Shares in the amount of $[_____]. The
structuring fee paid to [_____] will not exceed [_____]% of the total public
offering price of the Common Shares sold in this offering.

The sum of all compensation to the Underwriters in connection with this
public offering of the Common Shares, including the sales load, the structuring
fee and any additional compensation payments and the amounts paid by the Fund to
reimburse certain underwriters and certain other expenses, will not exceed
[_____]% of the total public offering price of the Common Shares sold in this
offering.

In connection with the requirements for listing the Common Stock on the
[_____] Exchange, the Underwriters have undertaken to sell lots of 100 or more
shares of Common Stock to a minimum of 400 beneficial owners in the United
States. The minimum investment requirement is 100 shares ($2,000) of Common
Shares.

Certain Underwriters may make a market in the Common Shares after trading
in the Common Shares has commenced on the [_____] Exchange. No Underwriter is,
however, obligated to conduct market-making activities and any such activities
may be discontinued at any time without notice, at the sole discretion of the
Underwriters. No assurance can be given as to the liquidity of, or the trading
market for, the Common Shares as a result of any market-making activities
undertaken by any Underwriter. This prospectus is to be used by any Underwriter
in connection with the offering and, during the period in which a prospectus
must be delivered, with offers and sales of the Common Shares in market-making
transactions in the over-the-counter market at negotiated prices related to
prevailing market prices at the time of the sale.

In connection with the offering, certain Underwriters may purchase and sell
the Common Shares in the open market. These transactions may include short
sales, syndicate covering transactions and stabilizing transactions. Short sales
involve syndicate sales of Common Shares in excess of the number of Common
Shares to be purchased by the Underwriters in the offering, which creates a
syndicate short position. "Covered" short sales are sales of Common Shares made
in an amount up to the number of Common Shares represented by the Underwriters'
over-allotment option. In determining the source of Common Shares to close out
the covered syndicate short position, the Underwriters will consider, among
other things, the price of Common Shares available for purchase in the open
market as compared to the price at which they may purchase Common Shares through
the over-allotment option. Transactions to close out the covered syndicate short
position involve either purchases of Common Shares in the open market after the
distribution has been completed or the exercise of the over-allotment option.
The Underwriters may also make "naked" short sales of Common Shares in excess of
the over-allotment option. The Underwriters must close out any naked short
position by purchasing Common Shares in the open market. A naked short position
is more likely to be created if the Underwriters are concerned that there may be
downward pressure on the price of Common Shares in the open market after pricing
that could adversely affect investors who purchase in the offering. Stabilizing
transactions consist of bids for or purchases of Common Shares in the open
market while the offering is in progress.

The Underwriters also may impose a penalty bid. Penalty bids permit the
Underwriters to reclaim a selling concession from a syndicate member when
[_____] repurchases Common Shares originally sold by that syndicate member in
order to cover syndicate short positions or make stabilizing purchases.

Any of these activities may have the effect of preventing or retarding a
decline in the market price Common Shares. They may also cause the price of
Common Shares to be higher than the price that would otherwise exist in the open
market in the absence of these transactions. The Underwriters may conduct these
transactions on the [_____] Exchange or in the over-the-counter market, or
otherwise. If the Underwriters commence any of these transactions, they may
discontinue them at any time.

The Fund anticipates that, from time to time, certain Underwriters may act
as brokers or dealers in connection with the execution of the Fund's portfolio
transactions after they have ceased to be Underwriters and, subject to certain
restrictions, may act as brokers while they are Underwriters. Certain
Underwriters have performed investment banking and advisory services for the
Investment Manager and their affiliates from time to time, for which they have
received customary fees and expenses. Certain Underwriters may, from time to
time, engage in transactions with or perform services for the Investment Manager
and their affiliates in the ordinary course of business.

-46-

A prospectus in electronic format may be made available on the websites
maintained by one or more of the Underwriters. The representative may agree to
allocate a number of Common Shares to the Underwriters for sale to their online
brokerage account holders. The representative will allocate Common Shares to
Underwriters that may make Internet distributions on the same basis as other
allocations. In addition, Common Shares may be sold by the Underwriters to
securities dealers who resell Common Shares to online brokerage account holders.

[The Fund has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act, or to contribute to
payments the Underwriters may be required to make because of any of those
liabilities.]

Prior to the public offering of Common Shares, the Investment Manager or an
affiliate will purchase Common Shares from the Fund in an amount satisfying the
net worth requirements of Section 14(a) of the 1940 Act.

The principal business address of [_____] is [_____].

In connection with the offering, the Underwriters or selected dealers may
distribute prospectuses electronically.

CUSTODIAN

[_____], will serve as custodian of the Fund's assets. The custodian
performs custodial, fund accounting and portfolio accounting services.

ADMINISTRATIVE SERVICES AGENT

Ameriprise Financial, Inc., 200 Ameriprise Financial Center, Minneapolis,
Minnesota 55474, provides or compensates others to provide administrative
services to the Fund. These services include administrative, accounting,
treasury, and other services. Fees paid by the Fund for these services are
included under "Other expenses" in the fees table.

-47-

TRANSFER AGENT, STOCKHOLDER SERVICE AGENT AND DIVIDEND PAYING AGENT

[_____], acts as the transfer agent, stockholder service agent and dividend
paying agent and performs certain recordkeeping functions for the Fund,
maintains the records of stockholder accounts and furnishes dividend paying and
related services.

BOARD SERVICES CORPORATION

The Fund, as well as the other funds in the RiverSource Family of Funds,
have an agreement with Board Services Corporation ("Board Services") located at
[_____]. This agreement sets forth the terms of Board Services' responsibility
to serve as an agent of the funds for purposes of administering the payment of
compensation to each independent Board member, to provide office space for use
by the funds and their boards, and to provide any other services to the boards
or the independent members, as may be reasonably requested.

LEGAL OPINIONS

Certain legal matters in connection with the Common Shares will be passed
upon for the Fund by Clifford Chance US LLP, New York, New York, and for the
Underwriters by [_____]. Clifford Chance US LLP and [_____] may rely as to
certain matters of Maryland law on the opinion of [_____].

-48-

TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

Investment Strategies and Risks........................................... 1
Management of the Fund.................................................... 22
Portfolio Managers........................................................ 32
Securities Transactions................................................... 34
Certain Provisions in the Articles of Incorporation....................... 36
Repurchase of Common Shares; Tender Offers; Conversion to Open-End Fund... 39
Tax Matters............................................................... 40
Tax Consequences of Certain Investments................................... 43
Report to Stockholders.................................................... 44
Custodian................................................................. 45
Board Services Corporation................................................ 46
Transfer Agent, Stockholder Service Agent and Dividend Paying Agent....... 47
Independent Registered Public Accounting Firm............................. 47
Counsel................................................................... 47
Other Matters............................................................. 48
Registration Statement.................................................... 50
Report of Independent Registered Public Accounting Firm................... 51
Appendix A Ratings of Corporate Bonds and Commercial Paper............... A-1

-49-

UNTIL [_____], 2009 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS THAT BUY, SELL OR TRADE THE COMMON SHARES, WHETHER OR NOT PARTICIPATING
IN THIS OFFERING, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION
TO THE DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS
AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.

[_____] SHARES

SELIGMAN PREMIUM TECHNOLOGY GROWTH FUND, INC.
COMMON SHARES

----------

PROSPECTUS

----------

[UNDERWRITERS]

, 2009

-50-

The information in this Statement of Additional Information is not complete and
may be changed. Seligman Premium Technology Growth Fund, Inc. (the "Fund") may
not sell securities until a registration statement filed with the Securities and
Exchange Commission is effective. This Statement of Additional Information is
not an offer to sell securities, and the Fund is not soliciting an offer to buy
securities in any state where the offer or sale is not permitted.

Subject to Completion, [_____], 2009

SELIGMAN PREMIUM TECHNOLOGY GROWTH FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION

Seligman Premium Technology Growth Fund, Inc. (the "Fund") is a newly
organized, non-diversified closed-end management investment company. The Fund
was formed as a Maryland corporation on [_____], 2009. The Fund's investment
manager is RiverSource Investments, LLC ("RiverSource Investments" or the
"Investment Manager").

This Statement of Additional Information dated [_____] ("SAI") relating to
shares of common stock of the Fund ("Common Shares") is not a prospectus, and
should be read in conjunction with the Fund's prospectus relating to Common
Shares dated [_____], 2009 ("Prospectus"). This SAI does not include all
information that a prospective investor should consider before purchasing Common
Shares, and investors should obtain and read the Prospectus prior to purchasing
such shares. You can obtain a free copy of the Prospectus by calling [_____].
You may also obtain a copy of the Prospectus on the web site (www.sec.gov) of
the Securities and Exchange Commission ("SEC"). Capitalized terms used but not
defined in this SAI have the meanings ascribed to them in the Prospectus.

No person has been authorized to give any information or to make any
representations not contained in the Prospectus or in this SAI in connection
with the offering made by the Prospectus, and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Fund. The Prospectus and this SAI do not constitute an offering by the
Fund in any jurisdiction in which such offering may not lawfully be made.

-i-

INVESTMENT STRATEGIES AND RISKS

The investment objectives and principal investment strategies of the Fund, as
well as the principal risks associated with the Fund's investment strategies,
are set forth in the Prospectus. The following information regarding the Fund's
investment strategies and risks supplements the information contained in the
Fund's Prospectus.

ACCESS TRADES AND THEIR RISKS. The Fund may participate in access trades. Access
trades are over-the-counter transactions that provide access to a designated
security, group of securities or market index without directly investing in the
reference security/index. For a commission, the counterparty agrees to provide a
return based on the return of the reference security/index. Access trades are
typically used in foreign markets where limits on direct foreign ownership can
affect prices and/or where there are significant complexities in directly
purchasing or selling shares in the reference security/index. Since access
trades are over-the-counter transactions, the Fund bears the risk that the
counterparty will be unable or unwilling to meet its obligations. In addition,
since over-the-counter markets are generally less liquid than exchanges, the
Fund may not be able to sell when it is deemed advantageous to do so.

AGENCY AND GOVERNMENT SECURITIES AND THEIR RISKS. The U.S. government and its
agencies and instrumentalities, and government-sponsored enterprises issue many
different types of securities, which the Fund may invest in. U.S. Treasury
bonds, notes, and bills and securities, including mortgage pass through
certificates of the Government National Mortgage Association (GNMA), are
guaranteed by the U.S. government. Other U.S. government securities are issued
or guaranteed by federal agencies or instrumentalities or government-sponsored
enterprises but are not guaranteed by the U.S. government. This may increase the
credit risk associated with these investments. Government-sponsored entities
issuing securities include privately owned, publicly chartered entities created
to reduce borrowing costs for certain sectors of the economy, such as farmers,
homeowners, and students. They include the Federal Farm Credit Bank System, Farm
Credit Financial Assistance Corporation, Federal Home Loan Bank, Federal Home
Loan Mortgage Corporation (FHLMC), Federal National Mortgage Association (FNMA),
Student Loan Marketing Association (SLMA), and Resolution Trust Corporation
(RTC). (On Sept. 7, 2008, the Federal Housing Finance Agency (FHFA), an agency
of the U.S. government, placed the FHLMC and FNMA into conservatorship, a
statutory process with the objective of returning the entities to normal
business operations. FHFA will act as the conservator to operate the enterprises
until they are stabilized.) Government-sponsored entities may issue discount
notes (with maturities ranging from overnight to 360 days) and bonds. Agency and
government securities are subject to the same concerns as other debt
obligations. (See also Debt Obligations) Although one or more of the other risks
described in this SAI may apply, the largest risks associated with agency and
government securities include Inflation Risk, Interest Rate Risk, Prepayment and
Extension Risk, and Reinvestment Risk.

BORROWING AND RELATED RISKS. The Fund may borrow money. If the Fund borrows
money, its net asset value per share may be subject to greater fluctuation until
the borrowing is paid off. If the Fund makes additional investments while
borrowings are outstanding, this may be considered a form of leverage. Under the
Investment Company Act of 1940, as amended (the "Investment Company Act"), the
Fund is required to maintain continuous asset coverage of 300% with respect to
such borrowings and to sell (within three days) sufficient portfolio holdings to
restore such coverage if it should decline to less than 300% due to market
fluctuations or otherwise, even if such liquidations of the Fund's holdings may
be disadvantageous from an investment standpoint. Leveraging by means of
borrowing may exaggerate the effect of any increase or decrease in the value of
portfolio securities or the Fund's net asset value (NAV), and money borrowed
will be subject to interest and other costs (which may include commitment fees
and/or the cost of maintaining minimum average balances) which may or may not
exceed the income received from the securities purchased with borrowed funds.

To the extent the Fund borrows money for investment purposes, which is commonly
referred to as "leveraging," the Fund's exposure to fluctuations in the prices
of its assets will be increased as compared to the Fund's exposure if the Fund
did not borrow money. The Fund's borrowing activities will exaggerate any
increase or decrease in the NAV of the Fund's Common Shares. In addition, the
interest which the Fund pays on borrowed money, together with any additional
costs of maintaining a borrowing facility, are additional costs borne by the
Fund and could reduce or eliminate any net investment profits. Unless profits on
assets acquired with borrowed funds exceed the costs of borrowing, the use of
borrowing will diminish the investment performance of the Fund compared with
what it would have been without borrowing. Although one or more of the other
risks described in this SAI may apply, the largest risks associated with
borrowing money include Inflation Risk.

-1-

CASH/MONEY MARKET INSTRUMENTS AND THEIR RISKS. The Fund may invest in cash/money
market instruments. Cash-equivalent investments include short-term U.S. and
Canadian government securities and negotiable certificates of deposit,
non-negotiable fixed-time deposits, bankers' acceptances, and letters of credit
of banks or savings and loan associations having capital, surplus, and undivided
profits (as of the date of its most recently published annual financial
statements) in excess of $100 million (or the equivalent in the instance of a
foreign branch of a U.S. bank) at the date of investment. The Fund also may
purchase short-term notes and obligations of U.S. and foreign banks and
corporations and may use repurchase agreements with broker-dealers registered
under the Securities Exchange Act of 1934 (the "1934 Act") and with commercial
banks. (See also Commercial Paper, Debt Obligations and Repurchase Agreements.)
These types of instruments generally offer low rates of return and subject the
Fund to certain costs and expenses.

Bankers' acceptances are marketable short-term credit instruments used to
finance the import, export, transfer or storage of goods. They are termed
"accepted" when a bank guarantees their payment at maturity.

Bank certificates of deposit are certificates issued against funds deposited in
a bank (including eligible foreign branches of U.S. banks), are for a definite
period of time, earn a specified rate of return and are normally negotiable.

The Fund may invest its daily cash balance in RiverSource Short-Term Cash Fund,
a money market Fund established for the exclusive use of the RiverSource Family
of Funds and other institutional clients of RiverSource Investments.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with cash/money market instruments include Credit Risk
and Inflation Risk.

COMMERCIAL PAPER AND THEIR RISKS. The Fund may invest in commercial paper.
Commercial paper is a short-term debt obligation with a maturity ranging from 2
to 270 days issued by banks, corporations, and other borrowers. It is sold to
investors with temporary idle cash as a way to increase returns on a short-term
basis. These instruments are generally unsecured, which increases the credit
risk associated with this type of investment. (See also Debt Obligations and
Illiquid and Restricted Securities.) Although one or more of the other risks
described in this SAI may apply, the largest risks associated with commercial
paper include Credit Risk and Liquidity Risk.

COMMON STOCKS AND THEIR RISKS. The Fund may invest in common stock of public
companies. Common stock represents units of ownership in a corporation. Owners
typically are entitled to vote on the selection of directors and other important
matters as well as to receive dividends on their holdings. In the event that a
corporation is liquidated, the claims of secured and unsecured creditors and
owners of bonds and preferred stock take precedence over the claims of those who
own common stock.

The price of common stock is generally determined by corporate earnings, type of
products or services offered, projected growth rates, experience of management,
liquidity, and general market conditions for the markets on which the stock
trades.

An adverse event, such as an unfavorable earnings report, may depress the value
of a particular common stock held by the Fund. Also, the prices of common stocks
are sensitive to general movements in the stock market and a drop in the stock
market may depress the price of common stocks to which the Fund has exposure.
Common stock prices fluctuate for several reasons, including changes to
investors' perceptions of the financial condition of an issuer or the general
condition of the relevant stock market, or when political or economic events
affecting an issuer occurs. In addition, common stock prices may be particularly
sensitive to rising interest rate risks, as the cost of capital rises and
borrowing costs increase. Although one or more of the other risks described in
this SAI may apply, the largest risks associated with common stock include
Issuer Risk, Market Risk, and Small and Mid-Sized Company Risk.

CORPORATE BONDS AND THEIR RISKS. The Fund may invest in corporate bonds.
Corporate bonds are debt obligations issued by private corporations, as distinct
from bonds issued by a government agency or a municipality. Corporate bonds
typically have four distinguishing features: (1) they are taxable; (2) they have
a par value of $1,000; (3) they have a term maturity, which means they come due
all at once; and (4) many are traded on major exchanges. Corporate bonds are
subject to the same concerns as other debt obligations. (See also Debt
Obligations and High-

-2-

Yield Debt Securities (Junk Bonds).) Corporate bonds may be either secured or
unsecured. Unsecured corporate bonds are generally referred to as "debentures."
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with corporate bonds include Credit Risk, Interest Rate
Risk, Issuer Risk, Prepayment and Extension Risk, and Reinvestment Risk.

COUNTERPARTY RISK. Counterparty risk is the risk that a counterparty to a
financial instrument entered into by the Fund or held by a special purpose or
structured vehicle becomes bankrupt or otherwise fails to perform its
obligations due to financial difficulties. The Fund may experience significant
delays in obtaining any recovery in a bankruptcy or other reorganization
proceeding. The Fund may obtain only limited recovery or may obtain no recovery
in such circumstances.

CREDIT RISK. Credit risk is the risk that the issuer of a security, or the
counterparty to a contract, will default or otherwise become unable or unwilling
to honor a financial obligation, such as payments due on a bond or a note. If
the Fund purchases unrated securities, or if the rating of a security is reduced
after purchase, the Fund will depend on the Investment Manager's analysis of
credit risk more heavily than usual.

DEBT OBLIGATIONS AND THEIR RISKS. The Fund may invest in debt obligations. Many
different types of debt obligations exist (for example, bills, bonds, or notes).
Issuers of debt obligations have a contractual obligation to pay interest at a
fixed, variable or floating rate on specified dates and to repay principal on a
specified maturity date. Certain debt obligations (usually intermediate- and
long-term bonds) have provisions that allow the issuer to redeem or "call" a
bond before its maturity. Issuers are most likely to call these securities
during periods of falling interest rates. When this happens, an investor may
have to replace these securities with lower yielding securities, which could
result in a lower return.

The market value of debt obligations is affected primarily by changes in
prevailing interest rates and the issuers perceived ability to repay the debt.
The market value of a debt obligation generally reacts inversely to interest
rate changes. When prevailing interest rates decline, the price usually rises,
and when prevailing interest rates rise, the price usually declines.

In general, the longer the maturity of a debt obligation, the higher its yield
and the greater the sensitivity to changes in interest rates. Conversely, the
shorter the maturity, the lower the yield but the greater the price stability.

As noted, the values of debt obligations also may be affected by changes in the
credit rating or financial condition of their issuers. Generally, the lower the
quality rating of a security, the higher the degree of risk as to the payment of
interest and return of principal. To compensate investors for taking on such
increased risk, those issuers deemed to be less creditworthy generally must
offer their investors higher interest rates than do issuers with better credit
ratings. (See also Agency and Government Securities, Corporate Bonds, and
High-Yield Debt Securities (Junk Bonds).)

Generally, debt obligations that are investment grade are those that have been
rated in one of the top four credit quality categories by two out of the three
independent rating agencies. In the event that a debt obligation has been rated
by only two agencies, the most conservative, or lower, rating must be in one of
the top four credit quality categories in order for the security to be
considered investment grade. If only one agency has rated the debt obligation,
that rating must be in one of the top four credit quality categories for the
security to be considered investment grade. See Appendix A for a discussion of
securities ratings.

All ratings limitations are applied at the time of purchase. Subsequent to
purchase, a debt security may cease to be rated or its rating may be reduced
below the minimum required for purchase by a Fund. Neither event will require
the sale of such a security, but it will be a factor in considering whether to
continue to hold the security. To the extent that ratings change as a result of
changes in a rating agency or its rating system, a Fund will attempt to use
comparable ratings as standards for selecting investments.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with debt obligations include: Credit Risk, Interest
Rate Risk, Issuer Risk, Prepayment and Extension Risk, and Reinvestment Risk.

-3-

DEPOSITARY RECEIPTS AND THEIR RISKS. The Fund may invest in depositary receipts.
Some foreign securities are traded in the form of American Depositary Receipts
(ADRs). ADRs are receipts typically issued by a U.S. bank or trust company
evidencing ownership of the underlying securities of foreign issuers. European
Depositary Receipts (EDRs) and Global Depositary Receipts (GDRs) are receipts
typically issued by foreign banks or trust companies, evidencing ownership of
underlying securities issued by either a foreign or U.S. issuer. Generally,
depositary receipts in registered form are designed for use in the U.S. and
depositary receipts in bearer form are designed for use in securities markets
outside the U.S. Depositary receipts may not necessarily be denominated in the
same currency as the underlying securities into which they may be converted.
Depositary receipts involve the risks of other investments in foreign
securities. In addition, ADR holders may not have all the legal rights of
shareholders and may experience difficulty in receiving shareholder
communications. (See also Common Stock, and Foreign and Emerging Markets
Securities.) Although one or more of the other risks described in this SAI may
apply, the largest risks associated with depositary receipts include Foreign and
Emerging Markets Risk, Issuer Risk, and Market Risk.

DELAYED DELIVERY SECURITIES AND THEIR RISKS. The Fund may purchase or sell
securities for delayed delivery, i.e., for issuance or delivery to or by the
Fund later than a normal settlement date for such securities at a stated price
and yield. The Fund generally would not pay for such securities or start earning
interest on them until they are received. When the Fund undertakes a delayed
delivery obligation, however, it immediately assumes the risks of ownership,
including the risks of price fluctuation. Failure of the issuer to deliver a
security purchased by the Fund on a delayed delivery basis may result in the
Fund's incurring a loss or missing an opportunity to make an alternative
investment. The Fund's delayed delivery purchase commitments could cause its net
asset value per share to be more volatile. The Fund may sell the right to
acquire the security prior to delivery if the Investment Manager deems it
advantageous to do so, which may result in a gain or loss to the Fund.

DERIVATIVES INSTRUMENTS AND THEIR RISKS. 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. The Fund may use derivative instruments to
maintain cash reserves while remaining fully invested, to offset anticipated
declines in values of investments, to facilitate trading, to reduce transaction
costs, or to pursue higher investment returns. Derivative instruments are
characterized by requiring little or no initial payment. Their value changes
daily based on a security, a currency, a group of securities or currencies, or
an index. A small change in the value of the underlying security, currency, or
index can cause a sizable percentage gain or loss in the price of the derivative
instrument.

Options and forward contracts are considered to be the basic "building blocks"
of derivatives. For example, forward-based derivatives include forward
contracts, swap contracts, and exchange-traded futures. Forward-based
derivatives are sometimes referred to generically as "futures contracts."
Option-based derivatives include privately negotiated, over-the-counter (OTC)
options (including caps, floors, collars, and options on futures) and
exchange-traded options on futures. Diverse types of derivatives may be created
by combining options or futures in different ways, and by applying these
structures to a wide range of underlying assets.

Options. An option is a contract. A person who buys a call option for a security
has the right to buy the security at a set price for the length of the contract.
A person who sells a call option is called a writer. The writer of a call option
agrees for the length of the contract to sell the security at the set price when
the buyer wants to exercise the option, no matter what the market price of the
security is at that time. A person who buys a put option has the right to sell a
security at a set price for the length of the contract. A person who writes a
put option agrees to buy the security at the set price if the purchaser wants to
exercise the option during the length of the contract, no matter what the market
price of the security is at that time. An option is covered if the writer owns
the security (in the case of a call) or sets aside the cash or securities of
equivalent value (in the case of a put) that would be required upon exercise.

The price paid by the buyer for an option is called a premium. In addition to
the premium, the buyer generally pays a broker a commission. The writer receives
a premium, less another commission, at the time the option is written. The
premium received by the writer is retained whether or not the option is
exercised. A writer of a call option may have to sell the security for a
below-market price if the market price rises above the exercise price. A writer
of a put option may have to pay an above-market price for the security if its
market price decreases below the exercise price.

When an option is purchased, the buyer pays a premium and a commission. It then
pays a second commission on the purchase or sale of the underlying security when
the option is exercised. For record keeping and tax purposes,

-4-

the price obtained on the sale of the underlying security is the combination of
the exercise price, the premium, and both commissions.

One of the risks an investor assumes when it buys an option is the loss of the
premium. To be beneficial to the investor, the price of the underlying security
must change within the time set by the option contract. Furthermore, the change
must be sufficient to cover the premium paid, the commissions paid both in the
acquisition of the option and in a closing transaction or in the exercise of the
option and sale (in the case of a call) or purchase (in the case of a put) of
the underlying security. Even then, the price change in the underlying security
does not ensure a profit since prices in the option market may not reflect such
a change.

Options on many securities are listed on options exchanges. If the Fund writes
listed options, it will follow the rules of the options exchange. Options are
valued at the close of the New York Stock Exchange. An option listed on a
national exchange, Chicago Board Options Exchange, or NASDAQ will be valued at
the mean of the last bid and ask prices.

Options on certain securities are not actively traded on any exchange, but may
be entered into directly with a dealer. These options may be more difficult to
close. If an investor is unable to effect a closing purchase transaction, it
will not be able to sell the underlying security until the call written by the
investor expires or is exercised.

Futures Contracts. The Fund may invest in futures contracts. A futures contract
is a sales contract between a buyer (holding the "long" position) and a seller
(holding the "short" position) for an asset with delivery deferred until a
future date. The buyer agrees to pay a fixed price at the agreed future date and
the seller agrees to deliver the asset. The seller hopes that the market price
on the delivery date is less than the agreed upon price, while the buyer hopes
for the contrary. Many futures contracts trade in a manner similar to the way a
stock trades on a stock exchange and the commodity exchanges.

Generally, a futures contract is terminated by entering into an offsetting
transaction. An offsetting transaction is effected by an investor taking an
opposite position. At the time a futures contract is made, a good faith deposit
called initial margin is set up. Daily thereafter, the futures contract is
valued and the payment of variation margin is required so that each day a buyer
would pay out cash in an amount equal to any decline in the contract's value or
receive cash equal to any increase. At the time a futures contract is closed
out, a nominal commission is paid, which is generally lower than the commission
on a comparable transaction in the cash market.

Futures contracts may be based on various securities, securities indexes (such
as the S&P 500 Index), foreign currencies and other financial instruments and
indexes.

A Fund may engage in futures and related options transactions to produce
incremental earnings, to hedge existing positions, and to increase flexibility.
The Fund intends to comply with Rule 4.5 of the Commodity Futures Trading
Commission (CFTC), under which a registered investment company such as the Fund
is exempt from the definition of a "commodity pool operator." The Fund,
therefore, is not subject to registration or regulation as a pool operator,
meaning that the Fund may invest in futures contracts without registering with
the CFTC.

Options on Futures Contracts. The Fund may invest in options on futures
contracts. Options on futures contracts give the holder a right to buy or sell
futures contracts in the future. Unlike a futures contract, which requires the
parties to the contract to buy and sell a security on a set date (some futures
are settled in cash), an option on a futures contract merely entitles its holder
to decide on or before a future date (within nine months of the date of issue)
whether to enter into a contract. If the holder decides not to enter into the
contract, all that is lost is the amount (premium) paid for the option. Further,
because the value of the option is fixed at the point of sale, there are no
daily payments of cash to reflect the change in the value of the underlying
contract. However, since an option gives the buyer the right to enter into a
contract at a set price for a fixed period of time, its value does change daily.

One of the risks in buying an option on a futures contract is the loss of the
premium paid for the option. The risk involved in writing options on futures
contracts an investor owns, or on securities held in its portfolio, is that
there could be an increase in the market value of these contracts or securities.
If that occurred, the option would be exercised and the asset sold at a lower
price than the cash market price. To some extent, the risk of not realizing a

-5-

gain could be reduced by entering into a closing transaction. An investor could
enter into a closing transaction by purchasing an option with the same terms as
the one previously sold. The cost to close the option and terminate the
investor's obligation, however, might still result in a loss. Further, the
investor might not be able to close the option because of insufficient activity
in the options market. Purchasing options also limits the use of monies that
might otherwise be available for long-term investments.

Options on Indexes. The Fund may invest in options on indexes. Options on
indexes are securities traded on national securities exchanges. An option on an
index is similar to an option on a futures contract except all settlements are
in cash. The Fund when exercising a put, for example, would receive the
difference between the exercise price and the current index level. Options may
also be traded with respect to other types of indexes, such as options on
indexes of commodities futures.

Currency Options. The Fund may invest in currency options. Options on currencies
are contracts that give the buyer the right, but not the obligation, to buy
(call options) or sell (put options) a specified amount of a currency at a
predetermined price (strike rate) on or before the option matures (expiry date).
Conversely, the seller has the obligation to buy or sell a currency option upon
exercise of the option by the purchaser. Currency options are traded either on a
national securities exchange or over-the-counter.

Tax and Accounting Treatment. If the Fund is using short futures contracts for
hedging purposes, the Fund may be required to defer recognizing losses incurred
on short futures contracts and on underlying securities. Any losses incurred on
securities that are part of a straddle may be deferred to the extent there is
unrealized appreciation on the offsetting position until the offsetting position
is sold. Federal income tax treatment of gains or losses from transactions in
options, options on futures contracts and indexes will depend on whether the
option is a section 1256 contract. If the option is a non-equity option, the
Fund would either make a 1256(d) election and treat the option as a mixed
straddle or mark to market the option at fiscal year end and treat the gain/loss
as 40% short-term and 60% long-term.

The Internal Revenue Service (IRS) has ruled publicly that an exchange-traded
call option is a security for purposes of the 50%-of-assets test and that its
issuer is the issuer of the underlying security, not the writer of the option,
for purposes of the diversification requirements.

Accounting for futures contracts will be according to generally accepted
accounting principles. Initial margin deposits will be recognized as assets due
from a broker (the Fund's agent in acquiring the futures position). During the
period the futures contract is open, changes in value of the contract will be
recognized as unrealized gains or losses by marking to market on a daily basis
to reflect the market value of the contract at the end of each day's trading.
Variation margin payments will be made or received depending upon whether gains
or losses are incurred. All contracts and options will be valued at the last
quoted sales price on their primary exchange.

Other Risks of Derivatives. The primary risk of derivatives is the same as the
risk of the underlying asset, namely that the value of the underlying asset may
go up or down. Adverse movements in the value of an underlying asset can expose
an investor to losses. Derivative instruments may include elements of leverage
and, accordingly, the fluctuation of the value of the derivative instrument in
relation to the underlying asset may be magnified. The successful use of
derivative instruments depends upon a variety of factors, particularly the
Investment Manager's ability to predict movements of the securities, currencies,
and commodity markets, which requires different skills than predicting changes
in the prices of individual securities. There can be no assurance that any
particular strategy will succeed.

Another risk is the risk that a loss may be sustained as a result of the failure
of a counterparty to comply with the terms of a derivative instrument. The
counterparty risk for exchange-traded derivative instruments is generally less
than for privately-negotiated or OTC derivative instruments, since generally a
clearing agency, which is the issuer or counterparty to each exchange-traded
instrument, provides a guarantee of performance. For privately-negotiated
instruments, there is no similar clearing agency guarantee. In all transactions,
an investor will bear the risk that the counterparty will default, and this
could result in a loss of the expected benefit of the derivative transaction and
possibly other losses.

-6-

When a derivative transaction is used to completely hedge another position,
changes in the market value of the combined position (the derivative instrument
plus the position being hedged) result from an imperfect correlation between the
price movements of the two instruments. With a perfect hedge, the value of the
combined position remains unchanged for any change in the price of the
underlying asset. With an imperfect hedge, the values of the derivative
instrument and its hedge are not perfectly correlated. For example, if the value
of a derivative instrument used in a short hedge (such as writing a call option,
buying a put option, or selling a futures contract) increased by less than the
decline in value of the hedged investment, the hedge would not be perfectly
correlated. Such a lack of correlation might occur due to factors unrelated to
the value of the investments being hedged, such as speculative or other
pressures on the markets in which these instruments are traded.

Derivatives also are subject to the risk that they cannot be sold, closed out,
or replaced quickly at or very close to their fundamental value. Generally,
exchange contracts are very liquid because the exchange clearinghouse is the
counterparty of every contract. OTC transactions are less liquid than
exchange-traded derivatives since they often can only be closed out with the
other party to the transaction.

Another risk is caused by the legal unenforceability of a party's obligations
under the derivative. A counterparty that has lost money in a derivative
transaction may try to avoid payment by exploiting various legal uncertainties
about certain derivative products. (See also Foreign Currency Transactions.)

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 its 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 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 liquidity risk.

Certain derivatives have the potential for unlimited losses regardless of the
size of the initial investment.

DIVERSIFICATION RISK. The Fund is a managed as a non-diversified fund. A
non-diversified fund may invest more of its assets in fewer companies than if it
were a diversified fund. Because each investment has a greater effect on the
Fund's performance, the Fund may be more exposed to the risks of loss and
volatility than a fund that invests more broadly.

EXCHANGE-TRADED FUNDS AND THEIR RISKS. The Fund may invest in exchange-traded
funds (ETFs). ETFs are traded on an exchange like individual stocks, but they
generally represent baskets of securities that seek to track the

-7-

performance of certain indices. The indices include not only broad-market
indices but more specific indices as well, including those relating to
particular sectors, countries and regions.

An ETF's share price may not track its specified market index and may trade
below its net asset value (i.e., at a discount). 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. In
addition, shareholders bear both their proportionate share of the Fund's
expenses and similar expenses incurred through ownership of the ETF. See also
"Investments in Other Investment Companies and Related Risks."

FOREIGN CURRENCY TRANSACTIONS AND THEIR RISKS. Investments in foreign countries
usually involve currencies of foreign countries. In addition, the Fund may hold
cash and cash equivalent investments in foreign currencies. As a result, the
value of the Fund's assets as measured in U.S. dollars may be affected favorably
or unfavorably by changes in currency exchange rates and exchange control
regulations. Also, the Fund may incur costs in connection with conversions
between various currencies. Currency exchange rates may fluctuate significantly
over short periods of time causing the Fund's NAV to fluctuate. Currency
exchange rates are generally determined by the forces of supply and demand in
the foreign exchange markets, actual or anticipated changes in interest rates,
and other complex factors. Currency exchange rates also can be affected by the
intervention of U.S. or foreign governments or central banks, or the failure to
intervene, or by currency controls or political developments.

Spot Rates and Derivative Instruments. The Fund may conduct its foreign currency
exchange transactions either at the spot (cash) rate prevailing in the foreign
currency exchange market or by entering into forward currency exchange contracts
(forward contracts). (See also Derivative Instruments.) These contracts are
traded in the interbank market conducted directly between currency traders
(usually large commercial banks) and their customers. Because foreign currency
transactions occurring in the interbank market might involve substantially
larger amounts than those involved in the use of such derivative instruments,
the Fund could be disadvantaged by having to deal in the odd lot market for the
underlying foreign currencies at prices that are less favorable than for round
lots.

The Fund may enter into forward contracts for a variety of reasons, but
primarily it will enter into such contracts for risk management (hedging) or for
investment purposes.

The Fund may enter into forward contracts to settle a security transaction or
handle dividend and interest collection. When the Fund enters into a contract
for the purchase or sale of a security denominated in a foreign currency or has
been notified of a dividend or interest payment, it may desire to lock in the
price of the security or the amount of the payment, usually in U.S. dollars,
although it could desire to lock in the price of the security in another
currency. By entering into a forward contract, the Fund would be able to protect
itself against a possible loss resulting from an adverse change in the
relationship between different currencies from the date the security is
purchased or sold to the date on which payment is made or received or when the
dividend or interest is actually received.

The Fund may enter into forward contracts when management of the Fund believes
the currency of a particular foreign country may decline in value relative to
another currency. When selling currencies forward in this fashion, the Fund may
seek to hedge the value of foreign securities it holds against an adverse move
in exchange rates. The precise matching of forward contract amounts and the
value of securities involved generally will not be possible since the future
value of securities in foreign currencies more than likely will change between
the date the forward contract is entered into and the date it matures. The
projection of short-term currency market movements is extremely difficult and
successful execution of a short-term hedging strategy is highly uncertain.

This method of protecting the value of the Fund's securities against a decline
in the value of a currency does not eliminate fluctuations in the underlying
prices of the securities. It simply establishes a rate of exchange that can be
achieved at some point in time. Although forward contracts tend to minimize the
risk of loss due to a decline in value of hedged currency, they tend to limit
any potential gain that might result should the value of such currency increase.

-8-

The Fund may also enter into forward contracts when the Investment Manager
believes the currency of a particular country will increase in value relative to
another currency. The Fund may buy currencies forward to gain exposure to a
currency without incurring the additional costs of purchasing securities
denominated in that currency.

A Fund may designate cash or securities in an amount equal to the value of the
Fund's total assets committed to consummating forward contracts entered into
under the circumstance set forth above. If the value of the securities declines,
additional cash or securities will be designated on a daily basis so that the
value of the cash or securities will equal the amount of the Fund's commitments
on such contracts.

At maturity of a forward contract, the Fund may either deliver (if a contract to
sell) or take delivery of (if a contract to buy) the foreign currency or
terminate its contractual obligation by entering into an offsetting contract
with the same currency trader, the same maturity date, and covering the same
amount of foreign currency.

If the Fund engages in an offsetting transaction, it would incur a gain or loss
to the extent there has been movement in forward contract prices. If the Fund
engages in an offsetting transaction, it may subsequently enter into a new
forward contract to buy or sell the foreign currency.

Although the Fund values its assets each business day in terms of U.S. dollars,
it may not intend to convert its foreign currencies into U.S. dollars on a daily
basis. It would do so from time to time, and stockholders should be aware of
currency conversion costs. Although foreign exchange dealers do not charge a fee
for conversion, they do realize a profit based on the difference (spread)
between the prices at which they are buying and selling various currencies.
Thus, a dealer may offer to sell a foreign currency to the Fund at one rate,
while offering a lesser rate of exchange should the Fund desire to resell that
currency to the dealer.

Options on Foreign Currencies. The Fund may buy put and call options and write
covered call and cash-secured put options on foreign currencies for hedging
purposes and to gain exposure to foreign currencies. For example, a decline in
the dollar value of a foreign currency in which securities are denominated will
reduce the dollar value of such securities, even if their value in the foreign
currency remains constant. In order to protect against the diminutions in the
value of securities, the Fund may buy put options on the foreign currency. If
the value of the currency does decline, the Fund would have the right to sell
the currency for a fixed amount in dollars and would offset, in whole or in
part, the adverse effect on its portfolio that otherwise would have resulted.

Conversely, where a change in the dollar value of a currency would increase the
cost of securities the Fund plans to buy, or where the Fund would benefit from
increased exposure to the currency, the Fund may buy call options on the foreign
currency. The purchase of the options could offset, at least partially, the
changes in exchange rates.

As in the case of other types of options, however, the benefit to the Fund
derived from purchases of foreign currency options would be reduced by the
amount of the premium and related transaction costs. In addition, where currency
exchange rates do not move in the direction or to the extent anticipated, the
Fund could sustain losses on transactions in foreign currency options that would
require it to forego a portion or all of the benefits of advantageous changes in
rates.

The Fund may write options on foreign currencies for the same types of purposes.
For example, when the Fund anticipates a decline in the dollar value of
foreign-denominated securities due to adverse fluctuations in exchange rates it
could, instead of purchasing a put option, write a call option on the relevant
currency. If the expected decline occurs, the option would most likely not be
exercised and the diminution in value of securities would be fully or partially
offset by the amount of the premium received.

Similarly, instead of purchasing a call option when a foreign currency is
expected to appreciate, the Fund could write a put option on the relevant
currency. If rates move in the manner projected, the put option would expire
unexercised and allow the Fund to hedge increased cost up to the amount of the
premium.

As in the case of other types of options, however, the writing of a foreign
currency option will constitute only a partial hedge up to the amount of the
premium, and only if rates move in the expected direction. If this does not
occur, the option may be exercised and the Fund would be required to buy or sell
the underlying currency at a loss

-9-

that may not be offset by the amount of the premium. Through the writing of
options on foreign currencies, the Fund also may be required to forego all or a
portion of the benefits that might otherwise have been obtained from favorable
movements on exchange rates.

All options written on foreign currencies will be covered. An option written on
foreign currencies is covered if the Fund holds currency sufficient to cover the
option or has an absolute and immediate right to acquire that currency without
additional cash consideration upon conversion of assets denominated in that
currency or exchange of other currency held in its portfolio. An option writer
could lose amounts substantially in excess of its initial investments, due to
the margin and collateral requirements associated with such positions.

Options on foreign currencies are traded through financial institutions acting
as market-makers, although foreign currency options also are traded on certain
national securities exchanges, such as the Philadelphia Stock Exchange and the
Chicago Board Options Exchange, subject to SEC regulation. In an
over-the-counter trading environment, many of the protections afforded to
exchange participants will not be available. For example, there are no daily
price fluctuation limits, and adverse market movements could therefore continue
to an unlimited extent over a period of time. Although the purchaser of an
option cannot lose more than the amount of the premium plus related transaction
costs, this entire amount could be lost.

Foreign currency option positions entered into on a national securities exchange
are cleared and guaranteed by the Options Clearing Corporation (OCC), thereby
reducing the risk of counterparty default. Further, a liquid secondary market in
options traded on a national securities exchange may be more readily available
than in the over-the-counter market, potentially permitting the Fund to
liquidate open positions at a profit prior to exercise or expiration, or to
limit losses in the event of adverse market movements.

The purchase and sale of exchange-traded foreign currency options, however, is
subject to the risks of availability of a liquid secondary market described
above, as well as the risks regarding adverse market movements, margining of
options written, the nature of the foreign currency market, possible
intervention by governmental authorities and the effects of other political and
economic events. In addition, exchange-traded options on foreign currencies
involve certain risks not presented by the over-the-counter market. For example,
exercise and settlement of such options must be made exclusively through the
OCC, which has established banking relationships in certain foreign countries
for that purpose. As a result, the OCC may, if it determines that foreign
governmental restrictions or taxes would prevent the orderly settlement of
foreign currency option exercises, or would result in undue burdens on OCC or
its clearing member, impose special procedures on exercise and settlement, such
as technical changes in the mechanics of delivery of currency, the fixing of
dollar settlement prices or prohibitions on exercise.

Foreign Currency Futures and Related Options. The Fund may enter into currency
futures contracts to buy or sell currencies. It also may buy put and call
options and write covered call and cash-secured put options on currency futures.
Currency futures contracts are similar to currency forward contracts, except
that they are traded on exchanges (and have margin requirements) and are
standardized as to contract size and delivery date. Most currency futures call
for payment of delivery in U.S. dollars. The Fund may use currency futures for
the same purposes as currency forward contracts, subject to CFTC limitations.

Currency futures and options on futures values can be expected to correlate with
exchange rates, but will not reflect other factors that may affect the value of
the Fund's investments. A currency hedge, for example, should protect a
Yen-denominated bond against a decline in the Yen, but will not protect the Fund
against price decline if the issuer's creditworthiness deteriorates. Because the
value of the Fund's investments denominated in foreign currency will change in
response to many factors other than exchange rates, it may not be possible to
match the amount of a forward contract to the value of the Fund's investments
denominated in that currency over time.

The Fund will hold securities or other options or futures positions whose values
are expected to offset its foreign currency obligations. The Fund would not
enter into a foreign currency option or futures position that exposes the Fund
to an obligation to another party unless it owns either (i) an offsetting
position in securities or (ii) cash, receivables and securities with a value
sufficient to cover its potential obligations. (See also Derivative Instruments
and Foreign and Emerging Markets Securities.) Although one or more of the other
risks described in this SAI may apply, the largest risks associated with foreign
currency transactions include: Derivatives Risk, Interest Rate Risk, and
Liquidity Risk.

-10-

FOREIGN GOVERNMENT OBLIGATIONS AND THEIR RISKS. The Fund may invest in debt
securities issued by foreign governments, which are sovereign debt obligations.
By investing in debt obligations of governmental entities, the Fund will be
exposed to the direct or indirect consequences of political, social and economic
changes in various countries. Political changes in a particular country may
affect the willingness of a particular government to make or provide for timely
payments of its debt obligations. The country's economic status, as reflected,
among other things, in its inflation rate, the amount of its external debt and
its gross domestic product, will also affect the government's ability to honor
its obligations.

In addition, the Fund's investment in debt obligations of supranational entities
is subject to the additional risk that one or more member governments may fail
to make required capital contributions to a particular supranational entity and,
as a result, such supranational entity may be unable to meet its obligations
with respect to its debt obligations held by the Fund.

With respect to sovereign debt of emerging market issuers, investors should be
aware that certain emerging market countries are among the largest debtors to
commercial banks and foreign governments. At times, certain emerging market
countries have declared moratoria on the payment of principal and interest on
external debt. Certain emerging market countries have experienced difficulty in
servicing their sovereign debt on a timely basis that led to defaults and the
restructuring of certain indebtedness.

FOREIGN AND EMERGING MARKETS SECURITIES AND THEIR RISKS. 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 risks associated with the political, economic, social
and other conditions of a foreign country. These conditions include lack of
publicly available information and less government oversight and regulation of
business and industry practices of stock exchanges, brokers and listed companies
than in the U.S. (including lack of uniform accounting, auditing, and financial
reporting standards comparable to those applicable to domestic companies). In
addition, with respect to certain foreign countries, there is the possibility of
nationalization, expropriation, the imposition of additional withholding or
confiscatory taxes, political, social, or economic instability, diplomatic
developments that could affect investments in those countries, or other
unforeseen actions by regulatory bodies (such as changes to settlement or
custody procedures). It may be more difficult for an investor's agents to keep
currently informed about corporate actions such as stock dividends or other
matters that may affect the prices of portfolio securities. 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. Payment for securities without delivery may be required in certain
foreign markets and, when participating in new issues, some foreign countries
require payment to be made in advance of issuance (at the time of issuance, the
market value of the security may be more or less than the purchase price). Fixed
commissions on some foreign stock exchanges are generally higher than negotiated
commissions on U.S. exchanges. Further, the Fund may encounter difficulties or
be unable to pursue legal remedies and obtain judgments in foreign courts. The
introduction of a single currency, the euro, on Jan. 1, 1999 for participating
European nations in the Economic and Monetary Union (EU) presents unique risks.
The most important is the exposure to the economic, political and social
development of the member countries in the EU.

Currency risk results from the constantly changing exchange rates 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. The inability of the Fund to make intended security
purchases due to such problems could cause the Fund to miss attractive
investment opportunities. 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.

-11-

Emerging markets risk includes the risks associated with the dramatic pace of
change (economic, social and political) in these countries as well as the other
considerations listed above. These markets, which may have relatively unstable
governments, economies based on only a few industries and securities markets
that trade a small number of securities, 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.

HIGH-YIELD DEBT SECURITIES (JUNK BONDS) AND THEIR RISKS. The Fund may invest in
high yield (high-risk) debt securities, sometimes referred to as junk bonds.
They are non-investment grade (lower quality) securities that have speculative
characteristics. Lower quality securities, while generally offering higher
yields than investment grade securities with similar maturities, involve greater
risks, including the possibility of default or bankruptcy. They are regarded as
predominantly speculative with respect to the issuer's capacity to pay interest
and repay principal. The special risk considerations in connection with
investments in these securities are discussed below. (See also Debt
Obligations.)

All fixed rate interest-bearing securities typically experience appreciation
when interest rates decline and depreciation when interest rates rise. The
market values of lower-quality and comparable unrated securities tend to reflect
individual corporate developments to a greater extent than do higher rated
securities, which react primarily to fluctuations in the general level of
interest rates. Lower-quality and comparable unrated securities also tend to be
more sensitive to economic conditions than are higher-rated securities. As a
result, they generally involve more credit risks than securities in the
higher-rated categories. During an economic downturn or a sustained period of
rising interest rates, highly leveraged issuers of lower-quality securities may
experience financial stress and may not have sufficient revenues to meet their
payment obligations. The issuer's ability to service its debt obligations also
may be adversely affected by specific corporate developments, the issuer's
inability to meet specific projected business forecasts, or the unavailability
of additional financing. The risk of loss due to default by an issuer of these
securities is significantly greater than a default by issuers of higher-rated
securities because such securities are generally unsecured and are often
subordinated to other creditors. Further, if the issuer of a lower quality
security defaulted, an investor might incur additional expenses to seek
recovery.

Credit ratings issued by credit rating agencies are designed to evaluate the
safety of principal and interest payments of rated securities. They do not,
however, evaluate the market value risk of lower-quality securities and,
therefore, may not fully reflect the true risks of an investment. In addition,
credit rating agencies may or may not make timely changes in a rating to reflect
changes in the economy or in the condition of the issuer that affect the market
value of the securities. Consequently, credit ratings are used only as a
preliminary indicator of investment quality.

An investor may have difficulty disposing of certain lower-quality and
comparable unrated securities because there may be a thin trading market for
such securities. Because not all dealers maintain markets in all lower quality
and comparable unrated securities, there is no established retail secondary
market for many of these securities. To the extent a secondary trading market
does exist, it is generally not as liquid as the secondary market for
higher-rated securities. The lack of a liquid secondary market may have an
adverse impact on the market price of the security. The lack of a liquid
secondary market for certain securities also may make it more difficult for an
investor to obtain accurate market quotations. Market quotations are generally
available on many lower-quality and comparable unrated issues only from a
limited number of dealers and may not necessarily represent firm bids of such
dealers or prices for actual sales.

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with high-yield debt securities include Credit Risk,
Interest Rate Risk, and Prepayment and Extension Risk.

ILLIQUID AND RESTRICTED SECURITIES AND THEIR RISKS. Illiquid securities are
securities that are not readily marketable. These securities may include, but
are not limited to, certain securities that are subject to legal or contractual
restrictions on resale, certain repurchase agreements, and derivative
instruments. To the extent the Fund invests in illiquid or restricted
securities, it may encounter difficulty in determining a market value for the
securities. Disposing of illiquid or restricted securities may involve
time-consuming negotiations and legal expense, and it may be difficult or
impossible for the Fund to sell the investment promptly and at an acceptable
price.

In determining the liquidity of all securities and derivatives, such as Rule
144A securities, which are unregistered securities offered to qualified
institutional buyers, and interest-only and principal-only fixed mortgage-backed

-12-

securities (IOs and POs) issued by the U.S. government or its agencies and
instrumentalities, the Investment Manager, under guidelines established by the
Fund's Board of Directors (the "Board"), will consider any relevant factors
including the frequency of trades, the number of dealers willing to purchase or
sell the security and the nature of marketplace trades. Although one or more of
the other risks described in this SAI may apply, the largest risks associated
with illiquid and restricted securities include Liquidity Risk.

INFLATION RISK. Inflation risk is the risk that the value of the Fund's holdings
or its distribution will decrease as inflation shrinks the purchasing power of
the U.S dollar. Inflation causes money to decrease in value at some rate, and
does so whether the money is invested or not.

INITIAL PUBLIC OFFERINGS (IPOS) AND THEIR RISKS. The Fund may invest in IPOs.
IPOs are subject to many of the same risks as investing in companies with
smaller market capitalizations. Companies issuing IPOs generally have limited
operating histories, and their prospects for future profitability are uncertain.
These companies often are engaged in new and evolving businesses and are
particularly vulnerable to competition and to changes in technology, markets and
economic conditions. They may be dependent on certain key managers and third
parties, need more personnel and other resources to manage growth and require
significant additional capital. They may also be dependent on limited product
lines and uncertain property rights and need regulatory approvals. Funds that
invest in IPOs can be affected by sales of additional shares and by
concentration of control in existing management and principal shareholders.
Stock prices of IPOs can also be highly unstable, due to the absence of a prior
public market, the small number of shares available for trading and limited
investor information. Most IPOs involve a high degree of risk not normally
associated with offerings of more seasoned companies.

To the extent the Fund determines to invest in IPOs, it may not be able to
invest to the extent desired, because, for example, only a small portion (if
any) of the securities being offered in an IPO may be made available. The
investment performance of the Fund during periods when it is unable to invest
significantly or at all in IPOs may be lower than during periods when the Fund
is able to do so. If the Fund sells its investments in IPOs within 12 months of
purchase, this may result in increased short-term capital gains, which will be
taxable to shareholders as ordinary income. Although one or more risks described
in this SAI may apply, the largest risks associated with IPOs include Small and
Mid-Sized Company Risk.

INTEREST RATE RISK. The securities in the portfolio are subject to the risk of
losses attributable to changes in interest rates. Interest rate risk is
generally associated with bond prices: when interest rates rise, bond prices
fall. In general, the longer the maturity or duration of a bond, the greater its
sensitivity to changes in interest rates.

INVESTMENTS IN OTHER INVESTMENT COMPANIES AND RELATED RISKS. The Fund may invest
in securities of other investment companies, such as, among others,
exchange-traded funds, subject to limitations imposed by the Investment Company
Act of 1940, as amended (the "Investment Company Act") and exemptive orders
issued by the SEC. The shares of other investment companies are subject to the
management fees and other expenses of those companies, and the purchase of
shares of some investment companies requires the payment of sales loads and (in
the case of closed-end investment companies) sometimes substantial premiums
above the value of such companies' portfolio securities or net asset values. The
Fund would continue, at the same time, to pay its own management fees and
expenses with respect to all its investments, including shares of other
investment companies. Although one or more of the other risks described in this
SAI may apply, the largest risks associated with the securities of other
investment companies include Market Risk.

ISSUER RISK. An issuer, or the value of its stocks or bonds, may perform poorly.
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.

LENDING OF PORTFOLIO SECURITIES AND RELATED RISKS. To generate additional
income, the Fund may lend up to one-third of the value of its Managed Assets to
broker-dealers, banks or other institutional borrowers of securities. JPMorgan
Chase Bank, N.A. serves as lending agent (the "Lending Agent") to the funds in
the RiverSource Family of Funds, which includes the Fund, pursuant to a
securities lending agreement (the "Securities Lending Agreement") approved by
the Fund's Board of Directors (the "Board").

-13-

Under the Securities Lending Agreement, the Lending Agent loans securities to
approved borrowers pursuant to borrower agreements in exchange for collateral
equal to at least 100% of the market value of the loaned securities. Collateral
may consist of cash, securities issued by the U.S. government or its agencies or
instrumentalities (collectively, "U.S. government securities") or such other
collateral as may be approved by the Board. For loans secured by cash, the Fund
retains the interest earned on cash collateral investments, but is required to
pay the borrower a rebate for the use of the cash collateral. For loans secured
by U.S. government securities, the borrower pays a borrower fee to the Lending
Agent on behalf of the Fund. If the market value of the loaned securities goes
up, the Lending Agent will request additional collateral from the borrower. If
the market value of the loaned securities goes down, the borrower may request
that some collateral be returned. During the existence of the loan, the lender
will receive from the borrower amounts equivalent to any dividends, interest or
other distributions on the loaned securities, as well as interest on such
amounts.

Loans are subject to termination by the Fund or a borrower at any time. The Fund
may choose to terminate a loan in order to vote in a proxy solicitation if the
Fund has knowledge of a material event to be voted on that would affect the
Fund's investment in the loaned security.

Securities lending involves Counterparty Risk (as described above), including
the risk that a borrower may not provide additional collateral when required or
return the loaned securities in a timely manner. Counterparty risk also includes
a potential loss of rights in the collateral if the borrower or the Lending
Agent defaults or fails financially. This risk is increased if the Fund's loans
are concentrated with a single or limited number of borrowers. There are no
limits on the number of borrowers the Fund may use and the Fund may lend
securities to only one or a small group of borrowers. Funds participating in
securities lending also bear the risk of loss in connection with investments of
cash collateral received from the borrowers. Cash collateral is invested in
accordance with investment guidelines contained in the Securities Lending
Agreement and approved by the Board. To the extent that the value or return of
the Fund's investments of the cash collateral declines below the amount owed to
a borrower, the Fund may incur losses that exceed the amount it earned on
lending the security. The Lending Agent will indemnify the Fund from losses
resulting from a borrower's failure to return a loaned security when due, but
such indemnification does not extend to losses associated with declines in the
value of cash collateral investments.

LEVERAGE RISK. Leverage occurs when the Fund increases its assets available for
investment using borrowings, short sales, derivatives, or similar instruments or
techniques. Due to the fact that short sales involve borrowing securities and
then selling them, the Fund's short sales effectively leverage the Fund's
assets. The use of leverage may make any change in the Fund's net asset value
even greater and thus result in increased volatility of returns. The Fund's
assets that are used as collateral to secure the short sales may decrease in
value while the short positions are outstanding, which may force the Fund to use
its other assets to increase the collateral. Leverage can also create an
interest expense that may lower the Fund's overall returns. Lastly, there is no
guarantee that a leveraging strategy will be successful.

LIQUIDITY RISK. 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 securities, may cause the
Fund to underperform other funds if that style falls out of favor with the
market.

PORTFOLIO TRADING AND TURNOVER RISKS. Portfolio trading may be undertaken to
accomplish the investment objectives of the Fund in relation to actual and
anticipated movements in interest rates, securities markets and for other
reasons. In addition, a security may be sold and another of comparable quality
purchased at approximately the same time to take advantage of what the
Investment Manager believes to be a temporary price disparity between the two
securities. Temporary price disparities between two comparable securities may
result from supply and demand imbalances where, for example, a temporary
oversupply of certain securities may cause a temporarily low price for such
security, as compared with other securities of like quality and characteristics.
The Fund may also engage in

-14-

short-term trading consistent with its investment objectives. Securities may be
sold in anticipation of a market decline or purchased in anticipation of a
market rise and later sold, or to recognize a gain.

A change in the securities held by the Fund is known as "portfolio turnover."
The Fund is managed without regard generally to restrictions on portfolio
turnover. The use of certain derivative instruments with relatively short
maturities may tend to exaggerate the portfolio turnover rate for the Fund. High
portfolio turnover (e.g., greater than 100%) involves correspondingly greater
expenses to the Fund, including brokerage commissions or dealer mark-ups and
other transaction costs on the sale of securities and reinvestments in other
securities. Trading in debt obligations does not generally involve the payment
of brokerage commissions, but does involve indirect transaction costs. The use
of futures contracts may involve the payment of commissions to futures
commission merchants. The higher the rate of portfolio turnover of the Fund, the
higher the transaction costs borne by the Fund generally will be. Transactions
in the Fund's portfolio securities may result in realization of taxable capital
gains (including short-term capital gains which are generally taxed to
stockholders at ordinary income tax rates). The trading costs and tax effects
associated with portfolio turnover may adversely affect the Fund's performance.

PREPAYMENT AND EXTENSION RISK. The risk that a bond or other security might be
called, or otherwise converted, prepaid, or redeemed, before maturity. This risk
is primarily associated with asset-backed securities, including mortgage backed
securities. If a security is converted, prepaid, or redeemed, before maturity,
particularly during a time of declining interest rates, the portfolio managers
may not be able to reinvest in securities providing as high a level of income,
resulting in a reduced yield to the Fund. Conversely, as interest rates rise,
the likelihood of prepayment decreases. The portfolio managers may be unable to
capitalize on securities with higher interest rates because the Fund's
investments are locked in at a lower rate for a longer period of time.

REINVESTMENT RISK. The risk that an investor will not be able to reinvest income
or principal at the same rate it currently is earning.

REPURCHASE AGREEMENTS AND THEIR RISKS. Repurchase agreements may be entered into
with banks or securities dealers or their affiliates. In a repurchase agreement,
the purchaser buys a security at one price, and at the time of sale, the seller
agrees to repurchase the obligation at a mutually agreed upon time and price
(usually within seven days). The repurchase agreement determines the yield
during the purchaser's holding period, while the seller's obligation to
repurchase is secured by the value of the underlying security. Repurchase
agreements could involve certain risks in the event of a default or insolvency
of the other party to the agreement, including possible delays or restrictions
upon the purchaser's ability to dispose of the underlying securities.

Repurchase agreements carry certain risks not associated with direct investments
in securities, including a possible decline in the market value of the
underlying obligations. If their value becomes less than the repurchase price,
plus any agreed-upon additional amount, the counterparty must provide additional
collateral so that at all times the collateral is at least equal to the
repurchase price plus any agreed-upon additional amount. The difference between
the total amount to be received upon repurchase of the obligations and the price
that was paid by the Fund upon acquisition is accrued as interest and included
in its net investment income. Repurchase agreements involving obligations other
than U.S. Government securities (such as commercial paper and corporate bonds)
may be subject to special risks and may not have the benefit of certain
protections in the event of the counterparty's insolvency. If the seller or
guarantor becomes insolvent, the Fund may suffer delays, costs and possible
losses in connection with the disposition of collateral. Although one or more of
the other risks described in this SAI may apply, the largest risks associated
with repurchase agreements include Credit Risk.

REVERSE REPURCHASE AGREEMENTS AND THEIR RISKS. In a reverse repurchase
agreement, an investor sells a security and enters into an agreement to
repurchase the security at a specified future date and price. The investor
generally retains the right to interest and principal payments on the security.
Since the investor receives cash upon entering into a reverse repurchase
agreement, it may be considered a borrowing.

Reverse repurchase agreements involve the risk that the buyer of the securities
sold by the Fund might be unable to deliver them when the Fund seeks to
repurchase the securities. In the event that the buyer of securities under a
reverse repurchase agreement files for bankruptcy or becomes insolvent, the
buyer, trustee or receiver may receive an extension of time to determine whether
to enforce the Fund's obligation to repurchase the securities, and the Fund's
use of the proceeds of the reverse repurchase agreement may effectively be
restricted pending such decision.

-15-

Although one or more of the other risks described in this SAI may apply, the
largest risks associated with reverse repurchase agreements include Credit Risk
and Interest Rate Risk. See also Derivative Instruments and their Risks.

SECTOR RISK. Investments that are concentrated in a particular issuer,
geographic region or sector will be more susceptible to changes in price. The
more a fund diversifies, the more it spreads risk and potentially reduces the
risks of loss and volatility.

SMALL AND MID-SIZED COMPANY RISK. Investments in small and medium companies
often involve greater risks than investments in larger, more established
companies because small and medium companies may lack the management experience,
financial resources, product diversification, experience and competitive
strengths of larger companies. Additionally, in many instances, the securities
of small and medium 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, the returns from a specific type of security (for example, mid-cap
stocks) may trail returns from other asset classes or the overall market. Each
type of security will go through cycles of doing better or worse than stocks or
bonds in general. These periods may last for several years.

STRUCTURED INVESTMENTS AND THEIR RISKS. The Fund may invest in structured
investments. A structured investment is a security whose return is tied to an
underlying index or to some other security or pool of assets. Structured
investments generally are individually negotiated agreements and may be traded
over-the-counter. Structured investments are created and operated to restructure
the investment characteristics of the underlying security. This restructuring
involves the deposit with or purchase by an entity, such as a corporation or
trust, of specified instruments, such as commercial bank loans, and the issuance
by that entity of one or more classes of debt obligations ("structured
securities") backed by, or representing interests in, the underlying
instruments. The cash flow on the underlying instruments may be apportioned
among the newly issued structured securities to create securities with different
investment characteristics, such as varying maturities, payment priorities and
interest rate provisions. The extent of the payments made with respect to
structured securities is dependent on the extent of the cash flow on the
underlying instruments. Because structured securities typically involve no
credit enhancement, their credit risk generally will be equivalent to that of
the underlying instruments. Structured securities are often offered in different
classes. As a result, a given class of a structured security may be either
subordinated or unsubordinated to the right of payment of another class.
Subordinated structured securities typically have higher yields and present
greater risks than unsubordinated structured securities. Structured securities
are typically sold in private placement transactions, and at any given time
there may be no active trading market for a particular structured security.
Although one or more of the other risks described in this SAI may apply, the
largest risks associated with structured investments include Credit Risk and
Liquidity Risk.

SWAP AGREEMENTS AND THEIR RISKS. The Fund may engage in swap agreements. Swap
agreements are typically individually negotiated agreements that obligate two
parties to exchange payments based on a reference to a specified asset,
reference rate or index. Swap agreements will tend to shift a party's investment
exposure from one type of investment to another. A swap agreement can increase
or decrease the volatility of the Fund's investments and its NAV.

Swap agreements are traded in the over-the-counter market and may be considered
to be illiquid. Swap agreements entail the risk that a party will default on its
payment obligations. The Fund will enter into a swap agreement only if the
claims-paying ability of the other party or its guarantor is considered to be
investment grade by the Investment Manager. Generally, the unsecured senior debt
or the claims-paying ability of the other party or its guarantor must be rated
in one of the three highest rating categories of at least one Nationally
Recognized Statistical Rating Organization (NRSRO) at the time of entering into
the transaction. If there is a default by the other party to such a transaction,
the Fund will have to rely on its contractual remedies (which may be limited by
bankruptcy, insolvency or similar laws) pursuant to the agreements related to
the transaction. In certain circumstances, the Fund may seek to minimize
counterparty risk by requiring the counterparty to post collateral.

Swap agreements are usually entered into without an upfront payment because the
value of each party's position is the same. The market values of the underlying
commitments will change over time resulting in one of the commitments being
worth more than the other and the net market value creating a risk exposure for
one counterparty or the other.

-16-

Interest Rate Swaps. Interest rate swap agreements are often used to obtain or
preserve a desired return or spread at a lower cost than through a direct
investment in an instrument that yields the desired return or spread. They are
financial instruments that involve the exchange of one type of interest rate for
another type of interest rate cash flow on specified dates in the future. In a
standard interest rate swap transaction, two parties agree to exchange their
respective commitments to pay fixed or floating rates on a predetermined
specified (notional) amount. The swap agreement notional amount is the
predetermined basis for calculating the obligations that the swap counterparties
have agreed to exchange. Under most swap agreements, the obligations of the
parties are exchanged on a net basis. The two payment streams are netted out,
with each party receiving or paying, as the case may be, only the net amount of
the two payments. Interest rate swaps can be based on various measures of
interest rates, including LIBOR, swap rates, treasury rates and other foreign
interest rates.

Cross Currency Swaps. Cross currency swaps are similar to interest rate swaps,
except that they involve multiple currencies. The Fund may enter into a currency
swap when it has exposure to one currency and desires exposure to a different
currency. Typically the interest rates that determine the currency swap payments
are fixed, although occasionally one or both parties may pay a floating rate of
interest. Unlike an interest rate swap, however, the principal amounts are
exchanged at the beginning of the contract and returned at the end of the
contract. In addition to paying and receiving amounts at the beginning and
termination of the agreements, both sides will also have to pay in full
periodically based upon the currency they have borrowed. Change in foreign
exchange rates and changes in interest rates, as described above, may negatively
affect currency swaps.

Total Return Swaps. Total return swaps are contracts in which one party agrees
to make periodic payments based on the change in market value of the underlying
assets, which may include a specified security, basket of securities or security
indexes during the specified period, in return for periodic payments based on a
fixed or variable interest rate of the total return from other underlying
assets. Total return swap agreements may be used to obtain exposure to a
security or market without owning or taking physical custody of such security or
market. For example, CMBS total return swaps are bilateral financial contracts
designed to replicate synthetically the total returns of commercial
mortgage-backed securities. In a typical total return equity swap, payments made
by the Fund or the counterparty are based on the total return of a particular
reference asset or assets (such as an equity security, a combination of such
securities, or an index). That is, one party agrees to pay another party the
return on a stock, basket of stocks, or stock index in return for a specified
interest rate. By entering into an equity index swap, for example, the index
receiver can gain exposure to stocks making up the index of securities without
actually purchasing those stocks. Total return swaps involve not only the risk
associated with the investment in the underlying securities, but also the risk
of the counterparty not fulfilling its obligations under the agreement.

Swaption Transaction. A swaption is an option on a swap agreement and a contract
that gives a counterparty the right (but not the obligation) to enter into a new
swap agreement or to shorten, extend, cancel or otherwise modify an existing
swap agreement, at some designated future time on specified terms, in return for
payment of the purchase price (the "premium") of the option. The Fund may write
(sell) and purchase put and call swaptions to the same extent it may make use of
standard options on securities or other instruments. The writer of the contract
receives the premium and bears the risk of unfavorable changes in the market
value on the underlying swap agreement.

Swaptions can be bundled and sold as a package. These are commonly called
interest rate caps, floors and collars. In interest rate cap transactions, in
return for a premium, one party agrees to make payments to the other to the
extent that interest rates exceed a specified rate, or cap. Interest rate floor
transactions require one party, in exchange for a premium to agree to make
payments to the other to the extent that interest rates fall below a specified
level, or floor. In interest rate collar transactions, one party sells a cap and
purchases a floor, or vice versa, in an attempt to protect itself against
interest rate movements exceeding given minimum or maximum levels or collar
amounts.

Credit Default Swaps. Credit default swaps are contracts in which third party
credit risk is transferred from one party to another party by one party, the
protection buyer, making payments to the other party, the protection seller, in
return for the ability of the protection buyer to deliver a reference
obligation, or portfolio of reference obligations, to the protection seller upon
the occurrence of certain credit events relating to the issuer of the reference
obligation and receive the notional amount of the reference obligation from the
protection seller. The Fund may use credit default swaps for various purposes
including to increase or decrease its credit exposure to various issuers. For

-17-

example, as a seller in a transaction, the Fund could use credit default swaps
as a way of increasing investment exposure to a particular issuer's bonds in
lieu of purchasing such bonds directly. Similarly, as a buyer in a transaction,
the Fund may use credit default swaps to hedge its exposure on bonds that it
owns or in lieu of selling such bonds. A credit default swap agreement may have
as reference obligations one or more securities that are not currently held by
the Fund. The Fund may be either the buyer or seller in the transaction. Credit
default swaps may also be structured based on the debt of a basket of issuers,
rather than a single issuer, and may be customized with respect to the default
event that triggers purchase or other factors. As a seller, the Fund generally
receives an up front payment or a fixed rate of income throughout the term of
the swap, which typically is between six months and three years, provided that
there is no credit event. If a credit event occurs, generally the seller must
pay the buyer the full face amount of deliverable obligations of the reference
obligations that may have little or no value. If the Fund is a buyer and no
credit event occurs, the Fund recovers nothing if the swap is held through its
termination date. However, if a credit event occurs, the buyer may elect to
receive the full notional value of the swap in exchange for an equal face amount
of deliverable obligations of the reference obligation that may have little or
no value.

Credit default swap agreements can involve greater risks than if the Fund had
invested in the reference obligation directly since, in addition to general
market risks, credit default swaps are subject to counterparty credit risk,
leverage risk, hedging risk, correlation risk and liquidity risk. The Fund will
enter into credit default swap agreements only with counterparties that meet
certain standards of creditworthiness. A buyer generally also will lose its
investment and recover nothing should no credit event occur and the swap is held
to its termination date. If a credit event were to occur, the value of any
deliverable obligation received by the seller, coupled with the upfront or
periodic payments previously received, may be less than the full notional value
it pays to the buyer, resulting in a loss of value to the seller. The Fund's
obligations under a credit default swap agreement will be accrued daily (offset
against any amounts owing to the Fund). In connection with credit default swaps
in which the Fund is the buyer, the Fund will segregate or "earmark" cash or
other liquid assets, or enter into certain offsetting positions, with a value at
least equal to the Fund's exposure (any accrued but unpaid net amounts owed by
the Fund to any counterparty), on a marked-to-market basis. In connection with
credit default swaps in which the Fund is the seller, the Fund will segregate or
"earmark" cash or other liquid assets, or enter into offsetting positions, with
a value at least equal to the full notional amount of the swap (minus any
amounts owed to the Fund). Such segregation or "earmarking" will ensure that the
Fund has assets available to satisfy its obligations with respect to the
transaction. Such segregation or "earmarking" will not limit the Fund's exposure
to loss.

The use of swap agreements by the Fund entails certain risks, which may be
different from, or possibly greater than, the risks associated with investing
directly in the securities and other investments that are the referenced asset
for the swap agreement. Swaps are highly specialized instruments that require
investment techniques, risk analyses and tax planning different from those
associated with stocks, bonds and other traditional investments. The use of a
swap requires an understanding not only of the referenced asset, reference rate
or index, but also of the swap itself, without the benefit of observing the
performance of the swap under all the possible market conditions. Because some
swap agreements have a leverage component, adverse changes in the value or level
of the underlying asset, reference rate, or index can result in a loss
substantially greater than the amount invested in the swap itself. Certain swaps
have the potential for unlimited loss, regardless of the size of the initial
investment. Although one or more of the other risks described in this SAI may
apply, the largest risks associated with swaps include Credit Risk, Liquidity
Risk and Market Risk.

WARRANTS TO PURCHASE SECURITIES AND THEIR RISKS. The Fund may invest in
warrants. Warrants are securities giving the holder the right, but not the
obligation, to buy the stock of an issuer at a given price (generally higher
than the value of the stock at the time of issuance) during a specified period
or perpetually. Warrants may be acquired separately or in connection with the
acquisition of securities. Warrants do not carry with them the right to
dividends or voting rights and they do not represent any rights in the assets of
the issuer. Warrants may be considered to have more speculative characteristics
than certain other types of investments. In addition, the value of a warrant
does not necessarily change with the value of the underlying securities, and a
warrant ceases to have value if it is not exercised prior to its expiration
date. Although one or more of the other risks described in this SAI may apply,
the largest risks associated with warrants include Market Risk.

WHEN-ISSUED SECURITIES AND FORWARD COMMITMENTS AND THEIR RISKS. When-issued
securities and forward commitments involve a commitment to purchase or sell
specific securities at a predetermined price or yield in which

-18-

payment and delivery take place after the customary settlement period for that
type of security. Normally, the settlement date occurs within 45 days of the
purchase although in some cases settlement may take longer. The investor does
not pay for the securities or receive dividends or interest on them until the
contractual settlement date. Such instruments involve the risk of loss if the
value of the security to be purchased declines prior to the settlement date and
the risk that the security will not be issued as anticipated. If the security is
not issued as anticipated, the Fund may lose the opportunity to obtain a price
and yield considered to be advantageous.

Securities purchased on a when-issued or forward commitment basis are subject to
changes in market value based upon investors' perceptions of the
creditworthiness of the issuer and upon changes, real or anticipated, in the
level of interest rates. If the Fund remains substantially fully invested at the
same time that it has purchased securities on a when-issued or forward
commitment basis, the market value of the Fund's assets may fluctuate more than
would otherwise be the case. Purchasing a security on a when-issued or forward
commitment basis can involve a risk that the yields available in the market when
the delivery takes place may be higher than those obtained on the security so
purchased. Sales of securities held by the Fund in order to meet obligations
resulting from when-issued or forward commitment securities carries with it a
greater potential for the realization of capital gain or loss. Although one or
more of the other risks described in this SAI may apply, the largest risks
associated with when-issued securities and forward commitments include Credit
Risk.

OTHER INVESTMENT MANAGEMENT TECHNIQUES. The Fund may, subject to the approval of
the Fund's Board, use various other investment management techniques that also
involve certain risks and special considerations, including engaging in hedging
and risk management transactions, such as interest rate transactions, options,
futures, swaps and other derivatives transactions, as described above. Strategic
transactions will be entered into to seek to manage the risks of the Fund's
portfolio of securities, but may have the effect of limiting the gains from
favorable market movements. Strategic transactions involve risks, including: (1)
that the loss on the strategic transaction position may be larger than the gain
in the portfolio position being hedged and (2) that the derivative instruments
used in strategic transactions may not be liquid and may require the Fund to pay
additional amounts of money. Successful use of strategic transactions depends on
the Investment Manager's ability to predict correctly market movements, which,
of course, cannot be assured. Losses on strategic transactions may reduce the
Fund's net asset value and its ability to pay dividends if they are not offset
by gains on the portfolio positions being hedged.

FUNDAMENTAL RESTRICTIONS

The Fund is subject to fundamental policies that place restrictions on
certain types of investments. The Fund's fundamental policies cannot be changed
except by vote of a majority of its outstanding voting securities. Under these
policies, the Fund may not:

- Purchase or sell commodities or commodity contracts, except to the
extent permissible under applicable law and interpretations, as they
may be amended from time to time, and except this shall not prevent
the Fund from buying or selling options, futures contracts and foreign
currency or from entering into forward currency contracts or from
investing in securities or other instruments backed by, or whose value
is derived from, physical commodities;

- Purchase securities on margin except as permitted by Investment
Company Act or any rule thereunder, any SEC or SEC staff
interpretations thereof or any exemptions therefrom which may be
granted by the SEC;

- Issue senior securities or borrow money, except as permitted by the
Investment Company Act or any rule thereunder, any SEC or SEC staff
interpretations thereof or any exemptions therefrom which may be
granted by the SEC;

- Make loans, except as permitted by the Investment Company Act or any
rule thereunder, any SEC or SEC staff interpretations thereof or any
exemptions therefrom which may be granted by the SEC;

-19-

- Underwrite the securities of other issuers, except insofar as the Fund
may be deemed an underwriter under the Securities Act of 1933 (the
"Securities Act") in disposing of a portfolio security or in
connection with investments in other investment companies;

- 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; and

- Invest 25% or more of its Managed Assets (as defined below), at market
value, in the securities of issuers in any particular industry, except
that the Fund will invest at least 25% of the value of its Managed
Assets in securities of issuers principally engaged in the technology
industry (in which the Fund intends to concentrate) and may invest
without limit in securities issued or guaranteed by the U.S.
Government, its agencies or instrumentalities, or government-sponsored
enterprises.

"Managed Assets" means the total assets of the Fund, minus the sum of its
accrued liabilities (other than Fund liabilities incurred for the express
purpose of creating financial leverage). Total assets for this purpose shall
include assets attributable to the Fund's use of financial leverage (whether or
not those assets are reflected in the Fund's financial statements for purposes
of generally accepted accounting principles).

The Fund's fundamental policies set forth above prohibit transactions
"except as permitted by the Investment Company Act or any rule thereunder, any
SEC or SEC staff interpretations thereof or any exemptions therefrom which may
be granted by the SEC." The following discussion explains the flexibility that
the Fund gains from these exceptions.

Purchase of securities on margin - A purchase on margin involves a loan
from the broker-dealer arranging the transaction. The "margin" is the cash or
securities that the borrower places with the broker-dealer as collateral against
the loan. However, the purchase of securities on margin is prohibited by the
Investment Company Act. Thus, under current law, this exception does not provide
any additional flexibility to the Fund.

Issuing senior securities - A "senior security" is an obligation with
respect to the earnings or assets of a company that takes precedence over the
claims of that company's common stock with respect to the same earnings or
assets. The Investment Company Act limits the ability of a closed-end fund to
issue senior securities, but SEC staff interpretations allow a fund to engage in
certain types of transactions that otherwise might raise senior security
concerns (such as short sales, buying and selling financial futures contracts
and selling put and call options), provided that the fund maintains segregated
deposits or portfolio securities, or otherwise covers the transaction with
offsetting portfolio securities, in amounts sufficient to offset any liability
associated with the transaction. The exception in the fundamental policy allows
the Fund to operate in reliance upon these staff interpretations.

Borrowing money - The Investment Company Act permits the Fund to borrow up
to 331/3% of its Managed Assets, plus an additional 5% of its Managed Assets for
temporary purposes.

Making loans - The Investment Company Act generally prohibits the Fund from
making loans to affiliated persons but does not otherwise restrict the Fund's
ability to make loans.

Under the Investment Company Act, the Fund's fundamental policies may not
be changed without the approval of the holders of a "majority of the
outstanding" Common Shares and, if issued, preferred stock of the Fund (the
"Preferred Shares") voting together as a single class, and of the holders of a
"majority of the outstanding" Preferred Shares voting as a separate class. When
used with respect to particular shares of the Fund, a "majority of the
outstanding" shares means the lesser of: (i) 67% or more of the shares present
at a stockholder meeting, if the holders of more than 50% of the outstanding
shares are present at the meeting or represented by proxy, or (ii) more than 50%
of the outstanding shares of the Fund.

Under the Investment Company Act, the Fund also may not change its
principal investment strategy of investing at least 80% of its Managed Assets in
a portfolio of equity securities of technology and technology-related

-20-

companies without first providing notice to stockholders at least 60 days prior
to such change. If the Board were to approve a change to the Fund's 80% policy,
such a notice will be provided in plain English in a separate written document
and will contain the following prominent statement, in bold-face type:
"Important Notice Regarding Change in Investment Policy." This prominent
statement will also appear on the envelope in which the notice is delivered or,
if the notice is delivered separately from other communications to stockholders,
such statement will appear either on the notice or on the envelope in which the
notice is delivered. This policy is not fundamental.

The Fund's investment objectives are nonfundamental, and may be changed by
the Fund's Board without approval of the Fund's holders of Common Shares
("Common Stockholders"). However, the Fund will provide stockholders at least 60
days notice of any change to its investment objectives.

For temporary defensive purposes in response to adverse market, economic,
political or other conditions, the Fund may invest up to 100% of its assets in
cash or cash equivalents, including, but not limited to, prime commercial paper,
bank certificates of deposit, bankers' acceptances, fixed-time deposits or
repurchase agreements for such securities, and securities of the U.S. Government
and its agencies and instrumentalities, and government-sponsored enterprises, as
well as cash and cash equivalents denominated in foreign currencies. Fixed time
deposits, unlike negotiable certificates of deposit, generally do not have a
market and may be subject to penalties for early withdrawal of funds.

PORTFOLIO TURNOVER

The Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for the year by the monthly average
of the value of the portfolio securities owned during the year. Securities whose
maturity or expiration date at the time of acquisition are one year or less are
excluded from the calculation. The Fund's portfolio turnover rate will not be a
limiting factor when the Fund deems it desirable to sell or purchase securities.

-21-

MANAGEMENT OF THE FUND

DIRECTORS AND OFFICERS

The business of the Fund is managed under the direction of the Fund's
Board. Subject to the provisions of the Fund's Articles of Incorporation, as
amended (the "Articles"), its bylaws and Maryland law, the Directors have all
powers necessary and convenient to carry out their responsibilities, including
the election and removal of the Fund's officers.

Stockholders of the Fund elect a Board that oversees the Fund's operations.
The Board appoints officers who are responsible for day-to-day business
decisions based on policies set by the Board. In addition to serving on the
Fund's Board, each Board member (other than those named in the table "Interested
Directors and/or Officers" in the table immediately below), serves on the boards
of directors/trustees of the other funds in the RiverSource Family of Funds,
which consists of [_____] funds, including [_____] RiverSource funds,
RiverSource Partners funds, Threadneedle funds and [_____] Seligman funds. The
Board is divided into [_____] classes, each of which consists of [_____]
Directors. Members of each class typically hold office for a term of [_____]
years and until their successors are elected and qualify or until he or she
reaches the mandatory retirement age established by the Board. The term of one
class expires in each year.

The table below lists the names of the Directors of the Fund, their address
and age, the position(s) they hold with the Fund, their term of office and
length of time served, a description of their principal occupations during the
past five years, any other directorships held by the Director and their Fund
committee memberships. Each of the Directors named in the table immediately
below is an "interested person" of the Fund, as that term is defined under the
Investment Company Act, by reason of being an officer and/or employee of
RiverSource Investments and/or Ameriprise Financial, Inc. ("Ameriprise
Financial"), the parent company of RiverSource Investments.

INTERESTED DIRECTORS AND/OR OFFICERS

POSITION WITH
FUND PRINCIPAL OCCUPATION
AND LENGTH OF DURING LAST OTHER COMMITTEE
NAME, ADDRESS, AGE TIME SERVED FIVE YEARS DIRECTORSHIPS MEMBERSHIPS
------------------ --------------- ------------------------------ ------------- -----------

Patrick T. Bannigan Board member President, RiverSource Family
172 Ameriprise Financial since [_____]; of Funds since 2006; Director
Center President since and Senior Vice President -
Minneapolis, MN 55474 [_____] Asset Management, Products and
Age 43 Marketing, RiverSource
Investments, LLC; Director and
Vice President - Asset
Management, Products and
Marketing, RiverSource
Distributors, Inc. since 2006
and of RiverSource Fund
Distributors, Inc. since 2008;
Managing Director and Global
Head of Product, Morgan
Stanley Investment Management,
2004-2006; President,
Touchstone Investments,
2002-2004

Scott R. Plummer Board member Vice President, General
5228 Ameriprise since Counsel and Secretary of the
Financial Center [_____]; Vice RiverSource Family of Funds
Minneapolis, MN 55474 President, since 2006; Vice President and
Age 50 General Counsel Chief Counsel - Asset
and Secretary Management, Ameriprise
since [_____] Financial, Inc. since 2005;
Chief Counsel, RiverSource
Distributors, Inc. and Chief
Legal Officer and Assistant

-22-

Secretary, RiverSource
Investments, LLC since 2006;
Chief Counsel, RiverSource
Fund Distributors, Inc. since
2008; Vice President, General
Counsel and Secretary,
Ameriprise Certificate Company
since 2005; Vice President -
Asset Management Compliance,
Ameriprise Financial, Inc.,
2004-2005; Senior Vice
President and Chief Compliance
Officer, US Bancorp Asset
Management, 2002-2004

Charles W. Kadlec Board member Vice President, Product
100 Park Avenue since [_____] Development, RiverSource
New York, NY 10017 Investments, LLC since 2008;
Age 63 portfolio manager of asset
allocation mutual funds since
2000; Director and Managing
Director, J. & W. Seligman &
Co. Incorporated, 2004-2008;
Director and President,
Seligman Advisors, Inc. and
Seligman Services, Inc. 2004-
2008

-23-

INDEPENDENT DIRECTORS (A)

INTERESTED DIRECTORS (A)

[_____] Board member
53600 Ameriprise and Vice
Financial Center President since
Minneapolis, MN 55474 [_____]
Age [_____]

----------
(a) "Independent Directors" are those Directors who are not "Interested
Persons" (as defined in Section 2(a)(19) of the Investment Company Act),
and "Interested Directors" are those Directors who are "Interested Persons"
of the Fund by reason of being an officer, director, security holder and/or
employee of RiverSource Investments and/or Ameriprise Financial.

The Board has appointed 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 [_____], who is a [title], the other
officers are:

FUND OFFICERS

POSITION WITH
THE FUND AND LENGTH OF
NAME, ADDRESS, AGE TIME SERVED PRINCIPAL OCCUPATION DURING LAST FIVE YEARS
------------------ ------------------------------ --------------------------------------------------------

Patrick T. Bannigan President since [_____] Director and Senior Vice President - Asset Management,
172 Ameriprise Financial Center Products and Marketing, RiverSource Investments, LLC and
Minneapolis, MN 55474 Director and Vice President - Asset Management, Products
Age 43 and Marketing, RiverSource Distributors, Inc. since 2006
and of RiverSource Fund Distributors, Inc. since 2008;
Managing Director and Global Head of Product, Morgan
Stanley Investment Management, 2004-2006; President,
Touchstone Investments, 2002-2004

Michelle M. Keeley Vice President since [_____] Executive Vice President - Equity and Fixed Income,
172 Ameriprise Financial Center Ameriprise Financial, Inc. and RiverSource Investments,
Minneapolis, MN 55474 LLC since 2006, Vice President - Investments, Ameriprise
Age 45 Certificate Company since 2003; Senior Vice President -
Fixed Income, Ameriprise Financial, Inc., 2002-2006 and
RiverSource Investments, LLC, 2004-2006

Amy K. Johnson Vice President since [_____] Chief Administrative Officer, RiverSource Investments,
172 Ameriprise Financial Center LLC since 2009; Vice President - Asset Management and
Minneapolis, MN 55474 Trust Company Services, RiverSource Investments, LLC,
Age 43 2006-2009; Vice President - Operations and Compliance,
RiverSource Investments, LLC, 2004-2006; Director of
Product Development - Mutual Funds, Ameriprise
Financial, Inc., 2001-2004

-24-

Scott R. Plummer Vice President, General Vice President and Chief Counsel - Asset Management,
172 Ameriprise Financial Center Counsel and Secretary since Ameriprise Financial, Inc. since 2005; Chief Counsel,
Minneapolis, MN 55474 [_____] RiverSource Distributors, Inc. and Chief Legal Officer
Age 50 and Assistant Secretary, RiverSource Investments, LLC
since 2006, Chief Counsel, RiverSource Fund
Distributors, Inc. since 2008; Vice President, General
Counsel and Secretary, Ameriprise Certificate Company
since 2005; Vice President - Asset Management
Compliance, Ameriprise Financial, Inc., 2004-2005;
Senior Vice President and Chief Compliance Officer,
US Bancorp Asset Management, 2002-2004

Jeffrey P. Fox Treasurer since [_____] Vice President - Investment Accounting, Ameriprise
105 Ameriprise Financial Center Financial, Inc. since 2002; Chief Financial Officer,
Minneapolis, MN 55474 RiverSource Distributors, Inc. since 2006 and
Age 54 RiverSource Fund Distributors, Inc. since 2008

Eleanor T.M. Hoagland Chief Compliance Officer since Chief Compliance Officer, RiverSource Investments, LLC,
100 Park Avenue, [_____] Kenwood Capital Management LLC, Ameriprise Certificate
New York, NY 10017 Company, RiverSource Service Corporation and Seligman
Age 58 Data Corp. since 2009; Chief Compliance Officer for each
of the Seligman funds since 2004 and all funds in the
RiverSource Family of Funds since 2009; Anti Money
Laundering Prevention Officer and Identity Theft
Prevention Officer for each of the Seligman funds since
2008; Managing Director, J. & W. Seligman & Co.
Incorporated and Vice President of each of the Seligman
funds 2004-2008

All officers are elected annually by the Fund's Board and serve until their
successors are elected and qualify or their earlier resignation.

COMMITTEES OF THE FUND'S BOARD

The Investment Management Services Agreement dated [_____], 2009 (the
"Management Agreement") between RiverSource Investments and the Fund was
initially approved by the Fund's Board in respect of the Fund at a meeting held
on [_____], 2009 and by the sole Common Stockholder on [_____], 2009. The Fund's
Board initially approved other contracts with the Investment Manager and its
affiliates, and other service providers. Once the contracts are approved, the
Board monitors the level and quality of services including commitments of
service providers to achieve expected levels of investment performance and
stockholder services. In addition, the Board oversees that processes are in
place to assure compliance with applicable rules, regulations and investment
policies and addresses possible conflicts of interest. Annually, the Board
evaluates the services received under the contracts by receiving reports
covering investment performance, stockholder services, marketing and the
Investment Manager's profitability in order to determine whether to continue
existing contracts or negotiate new contracts.

The Board has organized the following standing committees to facilitate its
work: Board Governance Committee, Compliance Committee, Contracts Committee,
Distribution Committee, Executive Committee, Investment Review Committee and
Audit Committee. These Committees are comprised solely of Directors who are not
"interested persons" of the Corporation as that term is defined in the
Investment Company Act (i.e., they are independent directors). The table above
describing each Director also includes their respective committee memberships.
The duties of these committees are described below.

Mr. [_____], as Chair of the Board, acts as a point of contact between the
independent Directors and the Investment Manager between Board meetings in
respect of general matters.

Board Governance Committee. Recommends to the Board the size, structure and
composition of the Board and its committees; the compensation to be paid to
members of the Board; and a process for evaluating the Board's performance. The
committee also makes recommendations to the Board regarding responsibilities and
duties of the Board, oversees proxy voting and supports the work of the Chair of
the Board in relation to furthering the interests of the Fund and other funds in
the RiverSource Family of Funds and their shareholders on external matters. The

-25-

committee, which operates pursuant to a written charter, also reviews candidates
for Board membership, including candidates recommended by stockholders.

To be considered as a candidate for director, recommendations must include
a curriculum vitae and be mailed to the Chair of the Board, RiverSource Family
of Funds, 901 Marquette Avenue South, Suite 2810, Minneapolis, MN 55402-3268. To
be timely for consideration by the committee, the submission, including all
required information, must be submitted in writing not less than 120 days before
the date of the proxy statement for the previous year's annual meeting of
stockholders. The committee will consider only one candidate submitted by such a
stockholder or group for nomination for election at an annual meeting of
stockholders. The committee will not consider self-nominated candidates or
candidates nominated by members of a candidate's family, including such
candidate's spouse, children, parents, uncles, aunts, grandparents, nieces and
nephews. Stockholders who wish to submit a candidate for nomination directly to
the Fund's stockholders must follow the procedures described in the Fund's
bylaws, [as posted to the website www.seligman.com].

The committee will consider and evaluate candidates submitted by the
nominating stockholder or group on the basis of the same criteria as those used
to consider and evaluate candidates submitted from other sources. The committee
may take into account a wide variety of factors in considering Director
candidates, including (but not limited to): (i) the candidate's knowledge in
matters relating to the investment company industry; (ii) any experience
possessed by the candidate as a director or senior officer of other public or
private companies; (iii) the candidate's educational background; (iv) the
candidate's reputation for high ethical standards and personal and professional
integrity; (v) any specific financial, technical or other expertise possessed by
the candidate, and the extent to which such expertise would complement the
Board's existing mix of skills and qualifications; (vi) the candidate's
perceived ability to contribute to the ongoing functions of the Board, including
the candidate's ability and commitment to attend meetings regularly, work
collaboratively with other members of the Board and carry out his or her duties
in the best interests of the Fund; (vii) the candidate's ability to qualify as
an independent director; and (viii) such other criteria as the committee
determines to be relevant in light of the existing composition of the Board and
any anticipated vacancies or other factors.

Compliance Committee. This committee supports the Fund's maintenance of a
strong compliance program by providing a forum for independent Board members to
consider compliance matters impacting the Fund or its key service providers;
developing and implementing, in coordination with the Fund's Chief Compliance
Officer (CCO), a process for the review and consideration of compliance reports
that are provided to the Board; and providing a designated forum for the Fund's
CCO to meet with independent Board members on a regular basis to discuss
compliance matters.

Contracts Committee. This committee reviews and oversees the contractual
relationships with service providers and receives and analyzes reports covering
the level and quality of services provided under contracts with the Fund. It
also advises the Board regarding actions taken on these contracts during the
annual review process.

Distribution Committee. This committee reviews and supports product
development and related activities to the Fund, and reports to the Board as
appropriate.

Executive Committee. This committee acts for the Board between meetings of
the Board.

Investment Review Committee. This committee reviews and oversees the
management of the Fund's assets and considers investment management policies and
strategies, investment performance, risk management techniques and securities
trading practices and reports areas of concern to the Board.

Audit Committee. This committee oversees the accounting and financial
reporting processes of the Fund and internal controls over financial reporting
and oversees the quality and integrity of the Fund's financial statements and
independent audits, as well as the Fund's compliance with legal and regulatory
requirements relating to the Fund's accounting and financial reporting, internal
controls over financial reporting and independent audits. The committee also
makes recommendations regarding the selection of the Fund's independent
registered public accounting firm and reviews and evaluates the qualifications,
independence and performance of such firm. This committee operates pursuant to a
written charter, [a copy of which is available at the website,
www.seligman.com].

-26-

The members of this committee are "independent" as required by applicable
listing standards of the [_____] Stock Exchange.

Since this is the first year of the Fund's operations, none of the
committees held meetings during the last fiscal year.

PROCEDURES FOR COMMUNICATIONS TO THE BOARD

The Fund's Board has adopted a process for stockholders to send
communications to the Board. To communicate with the Board or an individual
Director, a stockholder must send written communications to [_____], [_____],
addressed to the Board of Directors of Seligman Premium Technology Growth Fund,
Inc. or the individual Director. All stockholder communications received in
accordance with this process will be forwarded to the Board or the individual
Director.

BENEFICIAL OWNERSHIP OF SHARES

For each Director, the following table discloses the dollar range of equity
securities beneficially owned by the Director in the Fund and, on an aggregate
basis, in any registered investment companies overseen by the Director within
the RiverSource Family of Funds (which includes the Fund) as of [_____], 2009:

AGGREGATE DOLLAR RANGE OF SHARES OWNED BY
DOLLAR RANGE OF FUND SHARES DIRECTOR/TRUSTEE IN THE RIVERSOURCE FAMILY
NAME OWNED BY DIRECTOR OF FUNDS(*)
---- --------------------------- ------------------------------------------

INDEPENDENT DIRECTORS

INTERESTED DIRECTORS

----------
* Total includes deferred compensation invested in share equivalents.

As of [_____], 2009, the Fund's officers and Directors as a group owned
none of the Fund's Common Shares.

As of [_____], 2009, the following persons owned of record the number of
Common Shares noted below, representing the indicated percentage of the Fund's
outstanding equity securities as of such date. To the knowledge of the Fund, no
other person owned of record or beneficially 5% or more of the Fund's
outstanding equity securities on such date.

PERCENTAGE OF THE FUND'S OUTSTANDING SHARES AS OF
SHAREHOLDER NUMBER OF COMMON SHARES [_____], 2009
----------- ----------------------- -------------------------------------------------

COMPENSATION

No compensation is paid by the Fund or any fund in the RiverSource Family
of Funds to Directors or officers of the Fund or any fund in the RiverSource
Family of Funds who are employees of the Investment Manager or its affiliates.
Compensation of the other Directors who are not "interested persons" of the
Fund, as that term is defined in the Investment Company Act, is estimated as
follows for the fiscal year ending [_____], 2009:

-27-

TOTAL COMPENSATION
PENSION OR FROM FUND AND
AGGREGATE RETIREMENT BENEFITS RIVERSOURCE FAMILY
COMPENSATION ACCRUED AS PART OF OF FUNDS PAID TO
NAME FROM THE FUND(1) FUND EXPENSES DIRECTORS (2)
---- ---------------- ------------------- ------------------

$________ $________

----------
(1) Since the Fund has not completed its first full fiscal year, compensation
is estimated based upon future payments to be made by the Fund during the
current fiscal year and upon estimated relative Managed Assets of $[_____].

(2) At [_____], 2009, the Directors had oversight responsibilities for [_____]
investment companies, including the Fund.

(3) Ms. [_____], Mr. [_____], Mr. [_____] and Ms. [_____] elected to defer a
portion of the total compensation payable during the period in the amount
of $[_____], $[_____], $[_____] and $[_____], respectively.

The independent Board members determine the amount of compensation that
they receive, including the amount paid to the Chair of the Board. In
determining compensation for the independent Board members, the independent
Board members take into account a variety of factors including, among other
things, their collective significant work experience (e.g., in business and
finance, government or academia). The independent Board members also recognize
that these individuals' advice and counsel are in demand by other organizations,
that these individuals may reject other opportunities because the time demands
of their duties as independent Board members, and that they undertake
significant legal responsibilities. The independent Board members also consider
the compensation paid to independent board members of other fund complexes of
comparable size. In determining the compensation paid to the Chair, the
independent Board members take into account, among other things, the Chair's
significant additional responsibilities (e.g., setting the agenda for Board
meetings, communicating or meeting regularly with the Fund's CCO, counsel to the
independent Board members, and the Fund's service providers) which result in a
significantly greater time commitment required of the Chair. The Chair's
compensation, therefore, has generally been set at a level between 2.5 and 3
times the level of compensation paid to other independent Board members.

The independent Board members are paid an annual retainer of $95,000.
Committee and subcommittee chairs each receive an additional annual retainer of
$5,000. In addition, independent Board members are paid the following fees for
attending Board and committee meetings: $5,000 per day of in-person Board
meetings and $2,500 per day of in-person committee or sub-committee meetings (if
such meetings are not held on the same day as a Board meeting). Independent
Board members are not paid for special meetings conducted by telephone. The
Board's Chair will receive total annual cash compensation of $400,000. The fees
payable to the Chair as well as the other fees described above that are payable
to the other independent directors are the aggregate fees paid by all of the
funds (other than any fund of funds) in the RiverSource Family of Funds,
including the Fund. These fees are accrued monthly based upon the relative net
assets (or Managed Assets, as the case may be) of these funds.

The independent Board members may elect to defer payment of up to 100% of
the compensation they receive in accordance with a Deferred Compensation Plan
(the "Deferred Plan"). Under the Deferred Plan, a Board member may elect to have
his or her deferred compensation treated as if they had been invested in shares
of one or more RiverSource Family of Funds, and the amount paid to the Board
member under the Deferred Plan will be determined based on the performance of
such investments. Distributions may be taken in a lump sum or over a period of
years. The Deferred Plan will remain unfunded for federal income tax purposes
under the IRC. It is anticipated that deferral of Board member compensation in
accordance with the Deferred Plan will have, at most, a negligible impact on the
Fund's assets and liabilities.

-28-

CODE OF ETHICS

The funds in the RiverSource Family of Funds (which includes the Fund) and
RiverSource Investments have each adopted a Code of Ethics (collectively, the
"Codes") and related procedures reasonably designed to prevent violations of
Rule 204A-1 under the Investment Advisers Act of 1940 and Rule 17j-1 under the
Investment Company Act. The Codes contain provisions reasonably necessary to
prevent a fund's access persons from engaging in any conduct prohibited by
paragraph (b) of Rule 17j-1, which indicates that it is unlawful for any
affiliated person of or principal underwriter for a fund, or any affiliated
person of an investment adviser of or principal underwriter for a fund, in
connection with the purchase or sale, directly or indirectly, by the person of a
security held or to be acquired by a fund (i) to employ any device, scheme or
artifice to defraud a fund; (ii) to make any untrue statement of a material fact
to a fund or omit to state a material fact necessary in order to make the
statements made to a fund, in light of the circumstances under which they are
made, not misleading; (iii) to engage in any act, practice or course of business
that operates or would operate as a fraud or deceit on a fund; or (iv) to engage
in any manipulative practice with respect to a fund. The Codes prohibit
affiliated personnel from engaging in personal investment activities that
compete with or attempt to take advantage of planned portfolio transactions for
the fund.

A copy of the Code of Ethics is on public file with the SEC and can be
reviewed and copied at the SEC's Public Reference Room in Washington, DC. The
information on the operation of the SEC's Public Reference Room may be obtained
by calling the SEC at 1-202-942-8090. A copy of the Code of Ethics is also
available on the EDGAR Database on the SEC's Internet site at www.sec.gov.
Copies of the Code of Ethics may also be obtained, after paying a duplicating
fee, by electronic request at the following E-mail address: publicinfo@sec.gov,
or by writing the SEC's Public Reference Section, Washington, DC 20549-0102.

PROXY VOTING

GENERAL GUIDELINES, POLICIES AND PROCEDURES

The funds in the RiverSource Family of Funds, which include the Fund,
uphold a long tradition of supporting sound and principled corporate governance.
For over 30 years, the boards of directors/trustees of the RiverSource Family of
Funds, which consists of a majority of independent Board members, has determined
policies and voted proxies. RiverSource Investments, and the funds'
administrator, Ameriprise Financial, provide support to the Board in connection
with the proxy voting process.

GENERAL GUIDELINES

CORPORATE GOVERNANCE MATTERS -- The Board supports proxy proposals that it
believes are tied to the interests of shareholders and votes against proxy
proposals that appear to entrench management. For example:

- The Board generally votes in favor of proposals for an independent
chairman or, if the chairman is not independent, in favor of a lead
independent director.

- The Board supports annual election of all directors and proposals to
eliminate classes of directors.

- In a routine election of directors, the Board will generally vote with
management's recommendations because the Board believes that
management and nominating committees of independent directors are in
the best position to know what qualifications are required of
directors to form an effective board. However, the Board will
generally vote against a nominee who has been assigned to the audit,
compensation or nominating committee if the nominee is not independent
of management based on established criteria. The Board will also
withhold support for any director who fails to attend 75% of meetings
or has other activities that appear to interfere with his or her
ability to commit sufficient attention to the company and, in general,
will vote against nominees who are determined to have been involved in
options backdating.

-29-

- The Board generally supports proposals requiring director nominees to
receive a majority of affirmative votes cast in order to be elected to
the board, and opposes cumulative voting based on the view that each
director elected should represent the interests of all shareholders.

- Votes in a contested election of directors are evaluated on a
case-by-case basis. In general, the Board believes that incumbent
management and nominating committees, with access to more and better
information, are in the best position to make strategic business
decisions. However, the Board will consider an opposing slate if it
makes a compelling business case for leading the company in a new
direction.

SHAREHOLDER RIGHTS PLANS -- The Board generally supports shareholder rights
plans based on a belief that such plans force uninvited bidders to negotiate
with a company's board. The Board believes these negotiations allow time for the
company to maximize value for shareholders by forcing a higher premium from a
bidder, attracting a better bid from a competing bidder or allowing the company
to pursue its own strategy for enhancing shareholder value. The Board supports
proposals to submit shareholder rights plans to shareholders and supports
limiting the vote required for approval of such plans to a majority of the votes
cast.

AUDITORS -- The Board values the independence of auditors based on
established criteria. The Board supports a reasonable review of matters that may
raise concerns regarding an auditor's service that may cause the Board to vote
against a management recommendation, including, for example, auditor involvement
in significant financial restatements, options backdating, material weaknesses
in control, attempts to limit auditor liability or situations where independence
has been compromised.

STOCK OPTION PLANS AND OTHER MANAGEMENT COMPENSATION ISSUES -- The Board
expects company management to give thoughtful consideration to providing
competitive long-term employee incentives directly tied to the interest of
shareholders. The Board votes against proxy proposals that it believes dilute
shareholder value excessively.

The Board believes that equity compensation awards can be a useful tool,
when not abused, for retaining employees and giving them incentives to engage in
conduct that will improve the performance of the company. In this regard, the
Board generally favors minimum holding periods of stock obtained by senior
management pursuant to an option plan and will vote against compensation plans
for executives that it deems excessive.

SOCIAL AND CORPORATE POLICY ISSUES -- The Board believes proxy proposals
should address the business interests of the corporation. Shareholder proposals
sometime seek to have the company disclose or amend certain business practices
based purely on social or environmental issues rather than compelling business
arguments. In general, the Board recognizes our fund shareholders are likely to
have differing views of social and environmental issues and believes that these
matters are primarily the responsibility of a company's management and its board
of directors.

POLICIES AND PROCEDURES

The policy of the Board is to vote all proxies of the companies in which a
fund holds investments. Because of the volume and complexity of the proxy voting
process, including inherent inefficiencies in the process that are outside the
control of the Board or the Proxy Team (below), not all proxies may be voted.
The Board has implemented policies and procedures that have been reasonably
designed to vote proxies and to ensure that there are no conflicts between
interests of a fund's shareholders and those of the funds' principal
underwriters, RiverSource Investments, or other affiliated persons. In
exercising its proxy voting responsibilities, the Board may rely upon the
research or recommendations of one or more third party service providers.

The administration of the proxy voting process is handled by the
RiverSource Proxy Administration Team ("Proxy Team"). In exercising its
responsibilities, the Proxy Team may rely upon one or more third party service
providers. The Proxy Team assists the Board in identifying situations where its
guidelines do not clearly require a vote in a particular manner and assists in
researching matters and making voting recommendations. RiverSource Investments
may recommend that a proxy be voted in a manner contrary to the Board's
guidelines. In making

-30-

recommendations to the Board about voting on a proposal, the investment manager
relies on its own investment personnel (or the investment personnel of a fund's
subadviser(s)) and information obtained from an independent research firm. The
investment manager makes the recommendation in writing. The process requires
that Board members who are independent from the investment manager consider the
recommendation and decide how to vote the proxy proposal or establish a protocol
for voting the proposal.

On an annual basis, or more frequently as determined necessary, the Board
reviews recommendations to revise the existing guidelines or add new guidelines.
Recommendations are based on, among other things, industry trends and the
frequency that similar proposals appear on company ballots.

The Board considers management's recommendations as set out in the
company's proxy statement. In each instance in which a fund votes against
management's recommendation (except when withholding votes from a nominated
director), the Board sends a letter to senior management of the company
explaining the basis for its vote. This permits both the company's management
and the Board to have an opportunity to gain better insight into issues
presented by the proxy proposal(s).

VOTING IN COUNTRIES OUTSIDE THE UNITED STATES (NON-U.S. COUNTRIES) --
Voting proxies for companies not domiciled in the United States may involve
greater effort and cost due to the variety of regulatory schemes and corporate
practices. For example, certain non-U.S. countries require securities to be
blocked prior to a vote, which means that the securities to be voted may not be
traded within a specified number of days before the shareholder meeting. The
Board typically will not vote securities in non-U.S. countries that require
securities to be blocked as the need for liquidity of the securities in the
funds will typically outweigh the benefit of voting. There may be additional
costs associated with voting in non-U.S. countries such that the Board may
determine that the cost of voting outweighs the potential benefit.

SECURITIES ON LOAN -- The Board will generally refrain from recalling
securities on loan based upon its determination that the costs and lost revenue
to the funds, combined with the administrative effects of recalling the
securities, generally outweigh the benefit of voting the proxy. While neither
the Board nor the funds' administrator assesses the economic impact and benefits
of voting loaned securities on a case-by-case basis, situations may arise where
the Board requests that loaned securities be recalled in order to vote a proxy.
In this regard, if a proxy relates to matters that may impact the nature of a
company, such as a proposed merger or acquisition, and the funds' ownership
position is more significant, the Board has established a guideline to direct
the funds' administrator to use its best efforts to recall such securities based
upon its determination that, in these situations, the benefits of voting such
proxies generally outweigh the costs or lost revenue to the funds, or any
potential adverse administrative effects to the funds, of not recalling such
securities.

INVESTMENT IN AFFILIATED FUNDS -- Certain funds may invest in shares of
other funds in the RiverSource Family of Funds (referred to in this context as
"underlying funds") and may own substantial portions of these underlying funds.
The proxy policy of the funds is to ensure that direct public shareholders of
underlying funds control the outcome of any shareholder vote. To help manage
this potential conflict of interest, recognizing that the direct public
shareholders of these underlying funds may represent only a minority interest,
the policy of the funds is to vote proxies of the underlying funds in the same
proportion as the vote of the direct public shareholders. If there are no direct
public shareholders of an underlying fund, the policy is to cast votes in
accordance with instructions from the independent members of the Board.

Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12-month period ended June 30 is available (i)
without charge upon request by calling toll free [_____] in the U.S. or collect
[_____] outside the U.S. and (ii) on the SEC's website at www.sec.gov.
Information for each new 12-month period ending [_____] will be available no
later than [_____] of that year.

THE INVESTMENT MANAGER

RiverSource Investments, LLC is the investment manager of the Fund. See
"Management of the Fund" in the Fund's Prospectus.

-31-

RiverSource Investments, 200 Ameriprise Financial Center, Minneapolis,
Minnesota 55474, is also the investment manager of the RiverSource Family of
Funds, which includes the "RiverSource" funds, "RiverSource Partners" funds,
"Threadneedle" funds and the "Seligman" funds, and is a wholly owned subsidiary
of Ameriprise Financial, the Fund's Administrative Services Agent. 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.

The Management Agreement between RiverSource Investments and the Fund was
initially approved by the Fund's Board in respect of the Fund at a meeting held
on [_____], 2009 and by the Fund's sole Common Stockholder on [_____], 2009. The
Management Agreement provides that it is effective on [_____] and shall continue
in full force and effect until [_____], and from year to year thereafter if such
continuance is approved in the manner required by the Investment Company Act
(i.e., by a vote of a majority of the Board of Directors or of the outstanding
voting securities of the Fund and by a vote of a majority of Directors who are
not parties to the Management Agreement or interested persons of any such
party). The Management Agreement may be terminated by either the Fund or
RiverSource Investments at any time by giving the other party 60 days' written
notice of such intention to terminate, provided that any termination shall be
made without the payment of any penalty, and provided further that termination
may be effected either by the Board or by a vote of the majority of the
outstanding voting shares of the Fund. The Management Agreement will terminate
automatically in the event of its assignment, as such term is defined in the
Investment Company Act.

Except for bad faith, intentional misconduct or negligence in regard to the
performance of its duties under the Management Agreement, neither RiverSource
Investments, nor any of its respective directors, officers, partners,
principals, employees or agents will be liable for any acts or omissions or for
any loss suffered by the Fund or its stockholders or creditors. Each of
RiverSource Investments, and its respective directors, officers, partners,
principals, employees and agents, will be entitled to rely, and will be
protected from liability in reasonably relying, upon any information or
instructions furnished to it (or any of them as individuals) by the Fund or its
agents which is believed in good faith to be accurate and reliable. RiverSource
Investments does not warrant any rate of return, market value or performance of
any assets in the Fund. Notwithstanding the foregoing, the federal securities
laws impose liabilities under certain circumstances on persons who act in good
faith and, therefore, the Fund does not waive any right which it may have under
such laws or regulations.

The Fund pays RiverSource Investments a fee for managing its assets. The
fee paid to RiverSource Investments is equal to an annual rate of [_____] of the
Fund's average daily Managed Assets, as disclosed in the fee table in the
Prospectus. Under the Management Agreement, the Fund also pays taxes, brokerage
commissions and nonadvisory expenses, which include custodian fees and charges;
fidelity bond premiums; certain legal fees; registration fees for shares;
consultants' fees; compensation of Board members, officers and employees not
employed by the Investment Manager or its affiliates; corporate filing fees;
organizational expenses; expenses incurred in connection with lending
securities; and expenses properly payable by the Fund, approved by the Board.

ADMINISTRATIVE SERVICES AGENT

Ameriprise Financial provides certain services to the Fund, including
administrative, accounting, treasury and other services, and charges the Fund a
fee for providing such services, which is [_____] of the Fund's average daily
Managed Assets.

An estimate of the Fund's administrative services fees for the current
fiscal year is included in the Fund's "Other Expenses" in the fee table in the
Prospectus.

PORTFOLIO MANAGERS

The following table sets forth certain additional information from that
discussed in the Prospectus with respect to the portfolio managers of the Fund.
Unless noted otherwise, all information is provided as of [_____], 2009.

-32-

OTHER ACCOUNTS MANAGED BY PORTFOLIO MANAGERS

Table A below identifies, for each of the portfolio managers, the number of
accounts managed (other than the Fund) and the total assets in such accounts
within each of the following categories: registered investment companies, other
pooled investment vehicles and other accounts. Table B identifies, for each of
the portfolio managers, only those accounts that have an advisory fee based on
the performance of the account. For the purposes of the tables below, each
series or portfolio of a registered investment company is treated as a separate
registered investment company.

Table A

REGISTERED INVESTMENT OTHER POOLED INVESTMENT
PORTFOLIO MANAGER COMPANIES VEHICLES OTHER ACCOUNTS
----------------- --------------------- ----------------------- --------------

Paul H. Wick
Ajay Diwan
John K. Schonberg

Table B

REGISTERED INVESTMENT OTHER POOLED INVESTMENT
PORTFOLIO MANAGER COMPANIES VEHICLES OTHER ACCOUNTS
----------------- --------------------- ----------------------- --------------

Paul H. Wick
Ajay Diwan
John K. Schonberg

COMPENSATION/MATERIAL CONFLICTS OF INTEREST

Set forth below is an explanation of the structure of, and method(s) used
to determine portfolio manager compensation. Also set forth below is an
explanation of material conflicts of interest that may arise between the
portfolio manager's management of the Fund's investments and investments in
other accounts.

COMPENSATION

Portfolio manager compensation is typically comprised of (i) a base salary,
(ii) an annual cash bonus, a portion of which may be subject to a mandatory
deferral program, and may include (iii) an equity incentive award in the form of
stock options and/or restricted stock. The annual bonus is paid from a team
bonus pool that is based on the performance of the accounts managed by the
portfolio management team, which might include mutual funds, wrap accounts,
institutional portfolios and hedge funds. Funding for the bonus pool is
determined by a percentage of the aggregate assets under management in the
accounts managed by the portfolio managers, including the Fund, and by the short
term (typically one-year) and long-term (typically three-year) performance of
those accounts in relation to the relevant peer group universe. With respect to
hedge funds and separately managed accounts that follow a hedge fund mandate,
funding for the bonus pool is a percentage of performance fees earned on the
hedge funds or accounts managed by the portfolio managers.

Senior management of RiverSource Investments has the discretion to increase
or decrease the size of the part of the bonus pool and to determine the exact
amount of each portfolio manager's bonus paid from this portion of the bonus
pool based on his/her performance as an employee. In addition, where portfolio
managers invest in a hedge fund managed by the Investment Manager, they receive
a cash reimbursement for the investment management fees charged on their hedge
fund investments.

RiverSource Investments portfolio managers are provided with a benefits
package, including life insurance, health insurance, and participation in a
company 401(k) plan, comparable to that received by other RiverSource
Investments employees. Certain investment personnel are also eligible to defer a
portion of their compensation. An individual making this type of election can
allocate the deferral to the returns associated with one or more products they
manage or support or to certain other products managed by their investment team.
Depending upon their job level, RiverSource Investments portfolio managers may
also be eligible for other benefits or perquisites that are available to all
RiverSource Investments employees at the same job level.

-33-

CONFLICTS OF INTEREST

RiverSource Investments portfolio managers may manage one or more mutual
funds as well as other types of accounts, including closed-end funds, hedge
funds, proprietary accounts, separate accounts for institutions and individuals,
and other pooled investment vehicles. Portfolio managers make investment
decisions for an account or portfolio based on its investment objectives and
policies, and other relevant investment considerations. A portfolio manager may
manage another account whose fees may be materially greater than the management
fees paid by the Fund and may include a performance-based fee. Management of
multiple funds and accounts may create potential conflicts of interest relating
to the allocation of investment opportunities, competing investment decisions
made for different accounts and the aggregation and allocation of trades. In
addition, RiverSource Investments monitors a variety of areas (e.g., allocation
of investment opportunities) and compliance with the firm's Code of Ethics, and
places additional investment restrictions on portfolio managers who manage hedge
funds and certain other accounts. RiverSource Investments has a fiduciary
responsibility to all of the clients for which it manages accounts. RiverSource
Investments seeks to provide best execution of all securities transactions and
to aggregate securities transactions and then allocate securities to client
accounts in a fair and equitable basis over time. RiverSource Investments has
developed policies and procedures, including brokerage and trade allocation
policies and procedures, designed to mitigate and manage the potential conflicts
of interest that may arise from the management of multiple types of accounts for
multiple clients.

In addition to the accounts above, portfolio managers may manage accounts
in a personal capacity that may include holdings that are similar to, or the
same as, those of the fund. The Investment Manager's Code of Ethics is designed
to address conflicts and, among other things, imposes restrictions on the
ability of the portfolio managers and other "investment access persons" to
invest in securities that may be recommended or traded in the fund and other
client accounts.

SECURITIES OWNERSHIP

[As of [_____], neither Mr. Wick, Mr. Diwan nor Mr. Schonberg owned shares
of the Fund.]

SECURITIES TRANSACTIONS

Subject to policies set by the Board, as well as the terms of the
Management Agreement, the Investment Manager is authorized to determine,
consistent with the Fund's investment objectives and policies, which securities
will be purchased, held or sold. In determining where the buy and sell orders
are to be placed, the Investment Manager has been directed to use its best
efforts to obtain the best available price and the most favorable execution
except where otherwise authorized by the Board.

The Fund and the Investment Manager has a strict Code of Ethics that
prohibits affiliated personnel from engaging in personal investment activities
that compete with or attempt to take advantage of planned portfolio transactions
for the Fund. The Fund's securities may be traded on an agency basis with
brokers or dealers or on a principal basis with dealers. In an agency trade, the
broker-dealer generally is paid a commission. In a principal trade, the
Investment Manager will trade directly with the issuer or with a dealer who buys
or sells for its own account, rather than acting on behalf of another client.
The Investment Manager may pay the dealer a commission or instead, the dealer's
profit, if any, is the difference, or spread, between the dealer's purchase and
sale price for the security.

BROKER-DEALER SELECTION

In selecting broker-dealers to execute transactions on behalf of the Fund,
the Investment Manager will consider from among such factors as the ability to
minimize trading costs, trading expertise, infrastructure, ability to provide
information or services, financial condition, confidentiality, competitiveness
of commission rates, evaluations of execution quality, promptness of execution,
past history, ability to prospect for and find liquidity, difficulty of trade,
security's trading characteristics, size of order, liquidity of market, block
trading capabilities, quality of settlement, specialized expertise, overall
responsiveness, willingness to commit capital and research services provided.

-34-

The Board has adopted a policy prohibiting the Investment Manager from
considering the sales of the Fund's Common Shares in the offering as a factor in
the selection of broker-dealers through which to execute securities
transactions.

On a periodic basis, the Investment Manager makes a comprehensive review of
the broker-dealers and the overall reasonableness of their commissions,
including review by an independent third-party evaluator. The review evaluates
execution, operational efficiency, and research services.

COMMISSION DOLLARS

Broker-dealers typically provide a bundle of services including research
and execution of transactions. The research provided can be either proprietary
(created and provided by the broker-dealer) or third party (created by a third
party but provided by the broker-dealer). Consistent with the interests of the
Fund, the Investment Manager may use broker-dealers who provide both types of
research products and services in exchange for commissions, known as "soft
dollars," generated by transactions in portfolio securities for the Fund.

The receipt of research and brokerage products and services is used by the
Investment Manager, to the extent it engages in such transactions, to supplement
its own research and analysis activities, by receiving the views and information
of individuals and research staffs of other securities firms, and by gaining
access to specialized expertise on individual companies, industries, areas of
the economy and market factors. Research and brokerage products and services may
include reports on the economy, industries, sectors and individual companies or
issuers; statistical information; accounting and tax law interpretations;
political analyses; reports on legal developments affecting portfolio
securities; information on technical market actions; credit analyses; on-line
quotation systems; risk measurement; analyses of corporate responsibility
issues; on-line news services; and financial and market database services.
Research services may be used by the Investment Manager in providing advice to
multiple RiverSource Investments accounts, including the Fund even though it is
not possible to relate the benefits to any particular account or to the Fund.

On occasion, it may be desirable to compensate a broker for research
services or for brokerage services by paying a commission that might not
otherwise be charged or a commission in excess of the amount another broker
might charge. The Board has adopted a policy authorizing the Investment Manager
to do so, to the extent authorized by law, if the Investment Manager determines,
in good faith, that such commission is reasonable in relation to the value of
the brokerage or research services provided by a broker or dealer, viewed either
in the light of that transaction or the Investment Manager's overall
responsibilities with respect to the Fund and other funds or accounts for which
it acts as investment manager.

As a result of these arrangements, some portfolio transactions may not be
effected at the lowest commission, but overall execution may be better. The
Investment Manager has represented that under its procedures the amount of
commission paid will be reasonable and competitive in relation to the value of
the brokerage services and research products and services provided.

The Investment Manager may use step-out transactions. A "step-out" is an
arrangement in which the Investment Manager executes a trade through one
broker-dealer but instructs that broker-dealer to step-out all or a part of the
trade to another broker-dealer. The second broker-dealer will clear and settle,
and receive commissions for, the stepped-out portion. The Investment Manager may
receive research products and services in connection with step-out transactions.

Use of Fund commissions may create potential conflicts of interest between
the Investment Manager and the Fund. However, the Investment Manager has
policies and procedures in place intended to mitigate these conflicts and ensure
that the use of Fund commissions falls within the "safe harbor" of Section 28(e)
of the Securities Exchange Act of 1934 (the "1934 Act"). Some products and
services may be used for both investment decision-making and non-investment
decision-making purposes ("mixed use" items). The Investment Manager, to the
extent it has mixed use items, has procedures in place to assure that Fund
commissions pay only for the investment decision-making portion of a mixed-use
item.

-35-

TRADE AGGREGATION AND ALLOCATION

Generally, orders are processed and executed in the order received. When
the Fund buys or sells the same security as another portfolio, fund, or account,
the Investment Manager carries out the purchase or sale pursuant to policies and
procedures designed in such a way believed to be fair to the Fund. Purchase and
sale orders may be combined or aggregated for more than one account if it is
believed it would be consistent with best execution. Aggregation may reduce
commission costs or market impact on a per-share and per-dollar basis, although
aggregation may have the opposite effect. There may be times when not enough
securities are received to fill an aggregated order, including in an initial
public offering, involving multiple accounts. In that event, the Investment
Manager has policies and procedures designed in such a way believed to result in
a fair allocation among accounts, including the Fund.

From time to time, different portfolio managers with the Investment Manager
may make differing investment decisions related to the same security. However,
with certain exceptions for funds managed using strictly quantitative methods, a
portfolio manager or portfolio management team may not sell a security short if
the security is owned in another portfolio managed by that portfolio manager or
portfolio management team. On occasion, the Fund may purchase and sell a
security simultaneously in order to profit from short-term price disparities.

The Investment Manager has portfolio management teams in its Minneapolis
and Los Angeles offices that may share research information regarding leveraged
loans. The Investment Manager operates separate and independent trading desks in
these locations for the purpose of purchasing and selling leveraged loans. As a
result, the Investment Manager does not aggregate orders in leveraged loans
across portfolio management teams. For example, funds and other client accounts
being managed by these portfolio management teams may purchase and sell the same
leveraged loan in the secondary market on the same day at different times and at
different prices. There is also the potential for a particular account or group
of accounts, including the Fund, to forego an opportunity or to receive a
different allocation (either larger or smaller) than might otherwise be obtained
if the Investment Manager were to aggregate trades in leveraged loans across the
portfolio management teams. Although the Investment Manager does not aggregate
orders in leveraged loans across its portfolio management teams in Minneapolis
and Los Angeles, it operates in this structure subject to its duty to seek best
execution.

BROKERAGE COMMISSIONS PAID TO BROKERS AFFILIATED WITH THE INVESTMENT MANAGER

Affiliates of the Investment Manager may engage in brokerage and other
securities transactions on behalf of the Fund according to procedures adopted by
the Board and to the extent consistent with applicable provisions of the federal
securities laws. The Investment Manager will use an affiliate only if (i) the
Investment Manager determines that the Fund will receive prices and executions
at least as favorable as those offered by qualified independent brokers
performing similar brokerage and other services for the Fund and (ii) the
affiliate charges the Fund commission rates consistent with those the affiliate
charges comparable unaffiliated customers in similar transactions and if such
use is consistent with terms of the Management Agreement.

Because the Fund is newly organized and as of the date hereof has not
commenced investment operations, it has not paid brokerage commissions during
its last fiscal year.

CERTAIN PROVISIONS IN THE ARTICLES OF INCORPORATION

Certain provisions of the Fund's Articles, including those relating to the
election of directors, qualifications of directors, classification of the Board,
removal of directors, the Fund's ability to engage in certain extraordinary
transactions, amendments to the Fund's Articles and bylaws, quorum and notice of
director nominations and new business are described in the Prospectus. The
descriptions below are intended to supplement the disclosure in the Prospectus
and, together with the descriptions in the Prospectus, are intended only as a
summary and are qualified in their entirety by reference to the full text of the
Fund's Articles and bylaws and Maryland law.

-36-

ANTI-TAKEOVER PROVISIONS

The Fund's Articles include provisions that could limit the ability of
other entities or persons to acquire control of the Fund, to cause it to engage
in certain transactions or to modify its structure.

The affirmative vote of at least 75% of the entire Fund's Board is required
to authorize the conversion of the Fund from a closed-end to an open-end
management investment company. Such conversion also requires the affirmative
vote of the holders of at least 75% of the votes entitled to be cast thereon by
the stockholders of the Fund unless it is approved by a vote of at least 75% of
the Continuing Directors (as defined below), in which event such conversion
requires the approval of the holders of a majority of the votes entitled to be
cast thereon by the stockholders of the Fund. A 'Continuing Director' is any
member of the Fund's Board who (i) is not a person or affiliate of a person who
enters or proposes to enter into a Business Combination (as defined below) with
the Fund (an "Interested Party") and (ii) who has been a member of the Fund's
Board for a period of at least 12 months, or has been a member of the Board
since the Fund's initial public offering of Common Shares, or is a successor of
a Continuing Director who is unaffiliated with an Interested Party and is
recommended to succeed a Continuing Director by a majority of the Continuing
Directors then on the Fund's Board. The affirmative vote of at least 75% of the
votes entitled to be cast thereon by Fund stockholders will be required to amend
the Articles to change any of the provisions in this paragraph.

The affirmative votes of at least 75% of the entire Fund's Board and the
holders of at least (i) 80% of the votes entitled to be cast thereon by the
stockholders of the Fund and (ii) in the case of a Business Combination (as
defined below), 66 2/3% of the votes entitled to be cast thereon by the
stockholders of the Fund other than votes held by an Interested Party who is (or
whose affiliate is) a party to a Business Combination (as defined below) or an
affiliate or associate of the Interested Party, are required to authorize any of
the following transactions:

(i) merger, consolidation or statutory share exchange of the Fund with or
into any other entity;

(ii) issuance or transfer by the Fund (in one or a series of transactions
in any 12-month period) of any securities of the Fund to any person or entity
for cash, securities or other property (or combination thereof) having an
aggregate fair market value of $1,000,000 or more, excluding (a) issuances or
transfers of debt securities of the Fund, (b) sales of securities of the Fund in
connection with a public offering, (c) issuances of securities of the Fund
pursuant to a dividend reinvestment plan adopted by the Fund, (d) issuances of
securities of the Fund upon the exercise of any stock subscription rights
distributed by the Fund and (e) portfolio transactions effected by the Fund in
the ordinary course of business;

(iii) sale, lease, exchange, mortgage, pledge, transfer or other
disposition by the Fund (in one or a series of transactions in any 12 month
period) to or with any person or entity of any assets of the Fund having an
aggregate fair market value of $1,000,000 or more except for portfolio
transactions (including pledges of portfolio securities in connection with
borrowings) effected by the Fund in the ordinary course of its business
(transactions within clauses (i), (ii) and (iii) above being known individually
as a "Business Combination");

(iv) any voluntary liquidation or dissolution of the Fund or an amendment
to the Fund's Articles to terminate the Fund's existence;

(v) any stockholder proposal as to specific investment decisions made or to
be made with respect to the Fund's assets as to which stockholder approval is
required under federal or Maryland law;

(vi) a change in the nature of the business of the Fund so that it would
cease to be an investment company registered under the Investment Company Act;
or

(vii) with certain exceptions, the issuance of any securities of the Fund
to any Principal Stockholder (as defined below) for cash.

-37-

The term "Principal Stockholder" means any person, entity or group that
holds, directly or indirectly, more than 5% of the outstanding shares of the
Fund and includes any associates or affiliates of such person or entity or of
any member of the group.

None of the foregoing provisions may be amended except by the vote of at
least 75% of the outstanding shares of capital stock of the Fund outstanding and
entitled to vote thereon. As discussed in the Prospectus, certain of the actions
described above also require approval by the holders of the Preferred Shares, if
any, tallied separately. Certain of the transactions described above, even if
approved by stockholders, may be prohibited by the Investment Company Act.

The stockholder vote described above will not be required with respect to
the foregoing transactions (other than those set forth in (v) above) if they are
approved by a vote of at least 75% of the Continuing Directors (as defined
above). In that case, if Maryland law requires stockholder approval, the
affirmative vote of a majority of votes entitled to be cast thereon will be
required and if Maryland law does not require stockholder approval, no
stockholder approval will be required. The Fund's bylaws contain provisions the
effect of which is to prevent matters, including nominations of directors, from
being considered at a stockholders' meeting where the Fund has not received
notice of the matters generally at least 120 but no more than 150 days prior to
the first anniversary of the preceding year's annual meeting.

The percentage votes required under these provisions, which are greater
than the minimum requirements under Maryland law or the Investment Company Act,
will make more difficult a change in the Fund's business or management and may
have the effect of depriving Common Stockholders of an opportunity to sell
shares at a premium over prevailing market prices by discouraging a third party
from seeking to obtain control of the Fund in a tender offer or similar
transaction. The Fund's Board believes that the provisions of the Articles
relating to such higher votes are in the best interest of the Fund and its
stockholders.

NUMBER OF DIRECTORS; VACANCIES

The Fund's Articles and bylaws provide that the number of the Fund's
directors may be established only by the Fund's Board but may not be fewer than
one (as required under Maryland law) nor more than 20. Any vacancy may be
filled, at any regular meeting or at any special meeting called for that
purpose, by a majority of the remaining Directors, except that a vacancy
resulting from an increase in the number of Directors must be filled by a
majority of the entire Board. The Fund's Articles provide that, subject to any
applicable requirements of the Investment Company Act and except as may be
provided by the Fund's Board in setting the terms of any class or series of
preferred stock, at such time as the Fund has at least three independent
directors and a class of the Fund's stock is registered under the 1934 Act, the
Fund will be subject to the provision of Subtitle 8 of Title 3 of the Maryland
General Corporation Law regarding the filling of vacancies on the Board and, at
such time, any and all vacancies on the Board may be filled only by the
affirmative vote of a majority of the remaining Directors in office, even if the
remaining Directors do not constitute a quorum, and any Director elected to fill
a vacancy will serve for the remainder of the full term of the directorship in
which the vacancy occurred and until a successor is elected and qualifies,
subject to any applicable requirements of the Investment Company Act.

CALLING OF SPECIAL MEETINGS OF STOCKHOLDERS

The Fund's bylaws provide that special meetings of stockholders may be
called by the Fund's Board and certain officers. The bylaws also provide that,
subject to the satisfaction of certain procedural and informational requirements
by the stockholders requesting the meeting, a special meeting of stockholders
will be called by the Secretary of the Fund upon the written request of
stockholders entitled to cast not less than a majority of all the votes entitled
to be cast at such meeting.

LIMITATION OF LIABILITY AND INDEMNIFICATION

The Fund's Articles include a provision limiting the liability of the
Directors and officers to the Fund and its stockholders for money damages to the
maximum extent permitted by Maryland law.

-38-

The Fund's Articles authorize it, to the maximum extent permitted by
Maryland law, to obligate the Fund, and the Fund's bylaws so obligate the Fund,
to indemnify any present or former Director or officer or any individual who,
while a Director or officer of the Fund and at the request of the Fund, serves
or has served another corporation, real estate investment trust, partnership,
joint venture, trust, employee benefit plan or other enterprise as a director,
officer, partner or trustee and who is made a party to the proceeding by reason
of his service in that capacity, from and against any claim or liability to
which that individual may become subject or which that individual may incur by
reason of his or her status as a present or former director or officer of the
Fund and to pay or reimburse his or her reasonable expenses in advance of final
disposition of a proceeding. The Articles and bylaws also permit the Fund to
indemnify and advance expenses to any individual who served a predecessor of the
Fund in any of the capacities described above and any employee or agent of the
Fund or a predecessor of the Fund.

Maryland law requires a corporation (unless its articles of incorporation
provide otherwise, which the Fund's Articles do not) to indemnify a director or
officer who has been successful in the defense of any proceeding to which he is
made, or threatened to be made, a party by reason of his service in that
capacity. Maryland law permits a corporation to indemnify its present and former
directors and officers, among others, against judgments, penalties, fines,
settlements and reasonable expenses actually incurred by them in connection with
any proceeding to which they may be made, or threatened to be made, a party by
reason of their service in those or other capacities unless it is established
that (a) the act or omission of the director or officer was material to the
matter giving rise to the proceeding and (i) was committed in bad faith or (ii)
was the result of active and deliberate dishonesty, (b) the director or officer
actually received an improper personal benefit in money, property or services or
(c) in the case of any criminal proceeding, the director or officer had
reasonable cause to believe that the act or omission was unlawful. However,
under Maryland law, a Maryland corporation may not indemnify for an adverse
judgment in a suit by or in the right of the corporation or for a judgment of
liability on the basis that personal benefit was improperly received, unless in
either case a court orders indemnification and then only for expenses. In
addition, Maryland law permits a corporation to advance reasonable expenses to a
director or officer upon the corporation's receipt of (a) a written affirmation
by the director or officer of his or her good faith belief that he or she has
met the standard of conduct necessary for indemnification by the corporation and
(b) a written undertaking by him or her or on his or her behalf to repay the
amount paid or reimbursed by the corporation if it is ultimately determined that
the standard of conduct was not met.

Reference should be made to the Articles on file with the SEC for the full
text of these provisions.

REPURCHASE OF COMMON SHARES; TENDER OFFERS; CONVERSION TO OPEN-END FUND

The Fund is a closed-end management investment company and as such its
stockholders will not have the right to cause the Fund to redeem their shares.
Instead, the Fund's Common Shares will trade in the open market at a price that
will be a function of several factors, including dividend levels (which in turn
are affected by expenses), NAV, call protection, price, dividend stability,
relative demand for and supply of such shares in the market, general market and
economic conditions and other factors. Shares of a closed-end management
investment company may frequently trade at prices lower than NAV (i.e., at a
discount). The Fund's Board regularly monitors the relationship between the
market price and NAV of the Common Shares. If the Common Shares were to trade at
a substantial discount to NAV for an extended period of time, the Fund's Board
may consider the repurchase of its Common Shares on the open market or in
private transactions, or the making of a tender offer for such shares, or the
conversion of the Fund to an open-end management investment company (or mutual
fund). There can be no assurance, however, that the Board will decide to take or
propose any of these actions, or that share repurchases or tender offers, if
undertaken, will actually reduce market discount. [The Fund has no present
intention to repurchase its Common Shares and would do so only in the
circumstances described in this section.]

Notwithstanding the foregoing, if at any time Preferred Shares are
outstanding, the Fund may not purchase or otherwise acquire any of its Common
Shares unless: (1) all accrued dividends on Preferred Shares have been paid and
(2) at the time of such purchase or acquisition, the NAV of the Fund's portfolio
(determined after deducting the acquisition price of the Common Shares) is at
least 200% of the liquidation value of the outstanding Preferred Shares
(expected to equal the original purchase price per share plus any accrued and
unpaid dividends thereon).

-39-

Subject to its investment limitations, the Fund may borrow to finance the
repurchase of its Common Shares or to make a tender offer. Interest on any
borrowings to finance share repurchase transactions or the accumulation of cash
by the Fund in anticipation of share repurchases or tender offers will reduce
the Fund's net income. Any share repurchase, tender offer or borrowing that
might be approved by the Fund's Board would have to comply with the 1934 Act and
the Investment Company Act and the rules and regulations thereunder.

The Fund's Board may also from time to time consider submitting to the
holders of the shares of stock of the Fund a proposal to convert the Fund to an
open-end management investment company. In determining whether to exercise its
sole discretion to submit this issue to stockholders, the Fund's Board would
consider all factors then relevant, including but not limited to the
relationship of the market price of the Common Shares to its NAV, the extent to
which the Fund's capital structure is leveraged and the possibility of
re-leveraging, the spread, if any, between the yields on securities in the
Fund's portfolio and interest and dividend charges on Preferred Shares issued by
the Fund, if any, and general market and economic conditions.

See "Anti-Takeover and Other Provisions in the Articles of Incorporation"
in the Prospectus and "Certain Provisions in the Articles of Incorporation" in
this SAI for a discussion of voting requirements applicable to conversion of the
Fund to an open-end management investment company. If the Fund converted to an
open-end management investment company, it would be required to redeem all
Preferred Shares then outstanding, if any, and the Fund's Common Shares would be
de-listed from the [_____] Stock Exchange. Holders of common stock of an
open-end management investment company may require the company to redeem their
shares on any business day (except in certain circumstances as authorized by or
under the Investment Company Act) at their NAV, less such redemption charge, if
any, as might be in effect at the time of redemption. In order to avoid
maintaining large cash positions or liquidating favorable investments to meet
redemptions, open-end management investment companies typically engage in a
continuous offering of their common stock. These companies are thus subject to
periodic asset in-flows and out-flows that can complicate portfolio management.

The repurchase by the Fund of its Common Shares at prices below its NAV
will result in an increase in the NAV of those shares that remain outstanding.
However, there can be no assurance that share repurchases or tender offers at or
below NAV will result in the Fund's Common Shares trading at a price equal to
their NAV. Nevertheless, the fact that the Fund's Common Shares may be the
subject of repurchase or tender offers at NAV from time to time, or that the
Fund may be converted to a mutual fund, may reduce any spread between market
price and NAV that might otherwise exist.

In addition, a purchase by the Fund of its Common Shares will decrease the
Fund's total assets. This would likely have the effect of increasing the Fund's
expenses, which are borne by the Fund's Common Stockholders. Any purchase by the
Fund of its Common Shares at a time when Preferred Shares are outstanding will
increase the leverage applicable to the outstanding Common Shares then
remaining. See the Fund's Prospectus under "Risks--Financial Leverage Risk."

Before deciding whether to take any action if the Fund's Common Shares
trade below NAV, the Fund's Board would consider all relevant factors, including
the extent and duration of the discount, the liquidity of the Fund's portfolio,
the impact of any action that might be taken on the Fund or its stockholders and
market considerations. Based on these and other considerations, even if the
Fund's Common Shares should trade at a discount, the Board may determine that,
in the interest of the Fund and its stockholders, no action should be taken.

TAX MATTERS

Set forth below is a discussion of the material federal income and excise
tax aspects concerning the Fund and the purchase, ownership and disposition of
Common Shares. This discussion does not purport to be complete or to deal with
all aspects of federal taxation that may be relevant to stockholders in light of
their particular circumstances. Unless otherwise noted, this discussion assumes
that you are a U.S. person and hold your Common Shares as capital assets. This
discussion is based on present provisions of the Internal Revenue Code of 1986,
as amended (the "IRC") and the Treasury regulations promulgated thereunder and
existing judicial decisions and administrative pronouncements, all of which are
subject to change or differing interpretations (possibly with retroactive
effect). Prospective investors should consult their own tax advisers with regard
to the federal tax

-40-

consequences of the purchase, ownership or disposition of Common Shares, as well
as the tax consequences arising under the laws of any state, locality, foreign
country or other taxing jurisdiction.

TAXATION OF THE FUND

The Fund intends to elect to be treated and to qualify each taxable year
for treatment as a regulated investment company under the IRC. To qualify for
that treatment, the Fund must, among other things:

(a) derive at least 90% of its gross income each taxable year from
dividends, interest, payments with respect to certain securities loans
and gains from the sale or other disposition of securities or foreign
currencies, or other income (including gains from options, futures or
forward contracts) derived with respect to its business of investing
in securities or those currencies ("Income Requirement");

(b) distribute with respect to each taxable year at least 90% of its
investment company taxable income (consisting generally of net
investment income, the excess of net short-term capital gains over net
long-term capital losses and net gains and losses from certain foreign
currency transactions, if any, all determined without regard to any
deduction for dividends paid) for that year ("Distribution
Requirement"); and

(c) diversify its holdings so that, at the end of each quarter of its
taxable year, (1) at least 50% of the value of its total assets is
represented by cash and cash items, U.S. Government securities,
securities of other regulated investment companies and other
securities limited in respect of any one issuer to a value not greater
than 5% of the value of the Fund's total assets and to not more than
10% of the issuer's outstanding voting securities, and (2) not more
than 25% of the value of the Fund's total assets is invested in the
securities (other than those of the U.S. Government or other regulated
investment companies) of any one issuer or of two or more issuers that
the Fund controls and are engaged in the same, similar or related
trades or businesses or the securities of one or more qualified
publicly traded partnerships.

If the Fund qualifies for treatment as a regulated investment company, it
generally will not be subject to federal income tax on income and gains it
timely distributes to its stockholders (including Capital Gain Dividends, as
defined below). If the Fund failed to qualify for treatment as a regulated
investment company for any taxable year, it would be taxed as an ordinary
corporation on the full amount of its taxable income for that year without being
able to deduct the distributions it makes to its stockholders, and the
stockholders would treat all those distributions, including distributions of net
capital gain (i.e., the excess of net long-term capital gain over net short-term
capital loss), as dividends (that is, generally as ordinary income) to the
extent of the Fund's earnings and profits. In addition, the Fund could be
required to recognize unrealized gains, pay substantial taxes and interest and
make substantial distributions before requalifying for treatment as a regulated
investment company.

To the extent the Fund fails to distribute in a calendar year at least an
amount equal to the sum of (1) 98% of its ordinary income for that year plus (2)
98% of its capital gain net income for the one-year period ending October 31 of
that year, plus 100% of any retained amount of either from the prior year, it
will be subject to a nondeductible 4% excise tax ("Excise Tax"). For these
purposes, the Fund will be treated as having distributed any amount with respect
to which it pays income tax. A distribution the Fund pays to stockholders in
January of any year generally will be deemed to have been paid on December 31 of
the preceding year if the distribution is declared and payable to stockholders
of record on a date in October, November or December of that preceding year. The
Fund intends generally to make distributions sufficient to avoid imposition of
the Excise Tax.

If the Fund issues Preferred Shares, then, at any time when Preferred
Shares are outstanding, and its assets are insufficient to satisfy certain
requirements, it will be required to suspend distributions to the Common
Stockholders until such requirements are satisfied. Doing so may prevent the
Fund from satisfying the Distribution Requirement and may therefore jeopardize
its qualification for treatment as a regulated investment company or cause it to
incur an income tax or Excise Tax liability or both.

-41-

TAXATION OF THE COMMON STOCKHOLDERS

DISTRIBUTIONS. As long as the Fund qualifies for treatment as a regulated
investment company, distributions it makes to Common Stockholders from its
investment company taxable income will be taxable to them as ordinary income to
the extent of its current and accumulated earnings and profits. The Fund
currently expects that most dividends it pays will not be eligible for the
dividends-received deduction available to corporations or the reduced maximum
federal income tax rate (currently, 15%) on "qualified dividend income" received
by individuals. Distributions of net capital gain that are properly designated
as such ("Capital Gain Dividends") will be taxable to each stockholder as
long-term capital gain, regardless of how long the Common Stockholder has held
Common Shares. Capital Gain Dividends the Fund pays to individuals with respect
to gains it recognizes on sales or exchanges of capital assets in taxable years
beginning on or before December 31, 2010, also will be subject to a maximum
federal income tax rate of 15%.

Distributions (including Capital Gain Dividends) will be taxable as
described above whether received in cash or reinvested in additional Common
Shares through the Dividend Investment Plan. A Common Stockholder whose
distributions are so reinvested will be treated as having received a
distribution equal to either (1) the fair market value of the newly issued
Common Shares or (2) if the Common Shares are trading below their NAV, the
amount of cash allocated to the stockholder for the purchase of Common Shares on
its behalf in the open market.

The Fund may lend portfolio securities to institutional investors and,
during the time securities are on loan, the borrower will pay the Fund an amount
equivalent to any dividends the borrower receives on the securities. If
securities are on loan over their ex-dividend date, the "equivalent" payments
will not be treated as qualified dividend income eligible for the reduced tax
rate on individuals' dividends mentioned above.

Distributions on the Fund's Common Shares are generally subject to federal
income tax as described herein, even though those distributions may economically
represent a return of a particular Common Stockholder's investment. Those
distributions are likely to occur in respect of Common Shares purchased when the
Fund's NAV reflects gains that are either unrealized or realized but not
distributed or income that is not distributed. Those realized gains may be
required to be distributed even when the Fund's NAV also reflects unrealized
losses. Distributions are taxable to a Common Stockholder even if they are paid
from income or gains the Fund earned before the Common Stockholder makes an
investment (and thus included in the price the Common Stockholder paid).

If the Fund makes a distribution to a Common Stockholder in excess of its
current and accumulated earnings and profits, the excess distribution will be
treated as a "return of capital" to the extent of the Common Stockholder's tax
basis in its Common Shares and thereafter as capital gain. A return of capital
is not taxable, but it reduces a Common Stockholder's tax basis in its Common
Shares, thus reducing any loss or increasing any gain on a subsequent taxable
disposition by the Common Stockholder of its Common Shares.

The Fund will notify stockholders annually as to the federal tax status of
Fund distributions to them.

SALE OF SHARES. A Common Stockholder's sale or other taxable disposition of
Common Shares will generally give rise to a taxable gain or loss in an amount
equal to the difference between the amount of cash and the fair market value of
other property realized and the Common Stockholder's basis in those shares. In
general, any gain or loss realized on a taxable disposition of Common Shares
will be treated as long-term capital gain or loss (and thus eligible, in the
case of individuals, for the 15% maximum federal income tax rate on net capital
gain, as described above) if the Common Shares have been held for more than 12
months; otherwise, any such gain or loss will be treated as short-term capital
gain or loss. However, if a Common Stockholder sells Common Shares at a loss
within six months of their purchase, such loss will be treated as long-term,
rather than short-term, to the extent of any Capital Gain Dividends the Common
Stockholder received (or the Common Stockholder's share of any undistributed
capital gains designated) with respect to the Common Shares. A loss realized on
a sale or exchange of Common Shares of the Fund may be disallowed if other
substantially identical shares are acquired within a 61 day period beginning 30
days before and ending 30 days after the date on which the Common Shares are
disposed. In that case, the basis in the newly purchased shares will be adjusted
to reflect the disallowed loss.

-42-

From time to time the Fund may make a tender offer for some of its Common
Shares. A tender of Common Shares pursuant to such an offer would be a taxable
event. If the Fund decides to make a tender offer, the tax consequences thereof
will be disclosed in the documents relating to the offer.

Under promulgated U.S. Treasury regulations, if a Common Stockholder
recognizes a loss with respect to shares of $2 million or more in any single
taxable year (or $4 million or more in the taxable year in which the loss is
recognized and the five succeeding taxable years) for an individual Common
Stockholder, or five times those amounts for a corporate Common Stockholder, the
Common Stockholder must file with the Internal Revenue Service (IRS) a
disclosure statement on Form 8886. Direct stockholders of portfolio securities
are in many cases excepted from this reporting requirement, but under current
guidance, stockholders of a regulated investment company are not excepted.
Future guidance may extend the current exception from this reporting requirement
to stockholders of most or all regulated investment companies. The fact that a
loss is reportable under these regulations does not affect the legal
determination of whether the taxpayer's treatment of the loss is proper. Common
Stockholders should consult their own tax advisers to determine the
applicability of these regulations in light of their individual circumstances.

BACKUP WITHHOLDING. The Fund is required in certain circumstances to backup
withhold on reportable payments, including dividends, capital gains
distributions, and proceeds of sales or other dispositions of the Fund's Common
Shares paid to certain holders of the Fund's Common Shares who do not furnish
the Fund with their correct social security number or other taxpayer
identification number and make certain other certifications, or who are
otherwise subject to backup withholding. Backup withholding is not an additional
tax. Any amounts withheld from payments made to a stockholder may be refunded or
credited against such stockholder's U.S. federal income tax liability, if any,
provided that the required information is furnished to the IRS.

TAX CONSEQUENCES OF CERTAIN INVESTMENTS

HEDGING TRANSACTIONS. The use of hedging strategies, such as writing
(selling) and purchasing options and futures contracts and entering into forward
currency contracts, involves complex rules that will determine for income tax
purposes the amount, character and timing of recognition of the gains and losses
the Fund realizes in connection therewith. Gains from the disposition of foreign
currencies (except certain gains that may be excluded by future regulations),
and gains from options, futures and forward currency contracts the Fund derives
with respect to its business of investing in securities or foreign currencies,
will be treated as qualifying income under the Income Requirement.

The Fund expects to take the position that the NASDAQ 100 Index call
options it sells should be, to the extent that they are exchange listed, treated
as "section 1256 contracts" for U.S. federal income tax purposes and will be
"marked to market" (i.e., the NASDAQ 100 Index call options will be treated as
sold for its fair market value on the last business day preceding each date on
which the Fund sells the call options on the NASDAQ 100 Index and at the end of
the Fund's taxable year). The gain or loss attributable to the NASDAQ 100 Index
call options will be treated as 60% long-term and 40% short-term capital gain or
loss.

Certain adverse tax consequences could result if the Fund's ownership of
the stock holdings and sale of the NASDAQ 100 Index call options constituted
"straddles" (generally, offsetting positions with respect to personal property)
under section 1092 of the IRC. If the straddle rules applied to the Fund's
ownership of the stock holdings and sale of the NASDAQ 100 call options, such
positions would constitute a mixed straddle (i.e., a straddle consisting of
section 1256 contract positions (the NASDAQ 100 call options) and non-section
1256 contract positions (the stock holdings) that was not identified as a mixed
straddle under section 1092 of the IRC). In such case, the straddle rules would
defer recognition of realized losses and require the capitalization of certain
interest expense and carrying charges. In addition, the modified short sale
rules would apply such that any losses attributable to the non-section 1256
contract position would be treated as 60% long-term and 40% short-term capital
losses and any gains on such position would constitute short-term capital gain.
Accordingly, this treatment would restrict the Fund's ability to recognize
long-term capital gains from a sale or disposition of the stock holdings.
Furthermore, dividends, if any, on the stock holdings would not qualify for the
lower rate generally applicable to "qualified dividend income." It is expected,
however, that the stock holdings and the NASDAQ 100 Index call options generally
will not be considered a straddle because the Fund's stock holdings (and any
subset thereof) and the NASDAQ 100 Index on which it has outstanding option
positions are not expected to overlap sufficiently to

-43-

cause the option to be treated as a straddle. Therefore, the adverse tax
consequences described above generally will not apply. However, there can be no
assurance that the Fund's investments will not constitute straddles. Prospective
investors should consult their tax advisers regarding the potential application
of the straddle provisions to the Fund.

Certain other of the Fund's investment practices are also subject to
special and complex federal income tax provisions that may, among other things,
(1) disallow, suspend or otherwise limit the allowance of certain losses or
deductions, (2) convert lower taxed long-term capital gain to higher taxed
short-term capital gain or ordinary income, (3) convert an ordinary loss or a
deduction to a capital loss (the deductibility of which is more limited), (4)
cause the Fund to recognize income or gain without a corresponding receipt of
cash, (5) adversely affect the timing as to when a purchase or sale of
securities is deemed to occur and (6) adversely alter the characterization of
certain complex financial transactions. The Fund will monitor its transactions
and may make certain tax elections to mitigate the effect of these rules and
prevent its disqualification as a regulated investment company.

SECURITIES ISSUED OR PURCHASED AT A DISCOUNT. The Fund may acquire zero
coupon or other securities issued with original issue discount ("OID"). As a
holder of those securities, the Fund must include in gross income the OID that
accrues on them during the taxable year, even if it receives no corresponding
payment on them during the year. Because the Fund annually must distribute
substantially all of its investment company taxable income, including any OID,
to satisfy the Distribution Requirement and avoid imposition of the Excise Tax,
it may be required in a particular year to distribute as a dividend an amount
that is greater than the total amount of cash it actually receives. Those
distributions will be made from the Fund's cash assets or from the proceeds of
sales of its portfolio securities, if necessary. The Fund may realize capital
gains or losses from those sales, which would increase or decrease its
investment company taxable income and/or net capital gain.

* * *

The foregoing is a general summary of the provisions of the IRC and
regulations thereunder currently in effect as they directly govern the taxation
of the Fund and its stockholders. These provisions are subject to change by
legislative or administrative action, and any such change may be retroactive.
Stockholders are advised to consult their own tax advisers for more detailed
information concerning the federal (as well as state, local and foreign) income
and other tax consequences of purchasing, holding and disposing of Fund shares.

REPORT TO STOCKHOLDERS

Stockholders of the Fund will receive, when available, unaudited
semi-annual financial statements, as well as year-end financial statements
audited by the independent registered public accounting firm for the Fund. The
Fund's statements will show the investments owned by it and the market values
thereof and provide other information about the Fund and its operations.

-44-

CUSTODIAN

The Funds' securities and cash are held pursuant to a custodian agreement
with [_____]. The custodian is permitted to deposit some or all of the Fund's
securities in central depository systems as allowed by federal law. For its
services, the Fund pays the custodian a maintenance charge and a charge per
transaction in addition to reimbursing the custodian's out-of-pocket expenses.
As part of this arrangement, securities purchased outside the United States are
maintained in the custody of various foreign branches of [_____] or in other
financial institutions as permitted by law and by the Fund.

ADMINISTRATIVE SERVICES AGENT

-45-

BOARD SERVICES CORPORATION

The Fund, as well as the other funds in the RiverSource Family of Funds,
has an agreement with Board Services Corporation ("Board Services") located at
[_____]. This agreement sets forth the terms of Board Services' responsibility
to serve as an agent of the funds for purposes of administering the payment of
compensation to each independent Board member, to provide office space for use
by the funds and their boards, and to provide any other services to the boards
or the independent members, as may be reasonably requested.

-46-

TRANSFER AGENT, STOCKHOLDER SERVICE AGENT AND DIVIDEND PAYING AGENT

[_____] acts as the stockholder service agent and dividend paying agent, as
well as agent for the Dividend Investment Plan relating to the Common Shares.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

[_____] will serve as independent registered public accounting firm for the
Fund. [_____] provides accounting services, audit services, and tax-related
services for the Fund, as well as the other funds in the RiverSource Family of
Funds.

COUNSEL

Clifford Chance US LLP, 31 West 52nd Street, New York, New York 10019, will
pass upon certain legal matters in connection with shares offered by the Fund
and also acts as counsel to the Fund.

-47-

OTHER MATTERS

INFORMATION REGARDING PENDING AND SETTLED LEGAL PROCEEDINGS

In June 2004, an action captioned John E. Gallus et al. v. American Express
Financial Corp. and American Express Financial Advisors Inc. was filed in the
United States District Court for the District of Arizona. The Plaintiffs allege
that they are investors in several American Express Company (now known as
RiverSource) mutual funds and they purport to bring the action derivatively on
behalf of those funds under the Investment Company Act of 1940. The plaintiffs
allege that fees allegedly paid to the defendants by the funds for investment
advisory and administrative services are excessive. The plaintiffs seek remedies
including restitution and rescission of investment advisory and distribution
agreements. The plaintiffs voluntarily agreed to transfer this case to the
United States District Court for the District of Minnesota (the "District
Court"). In response to defendants' motion to dismiss the complaint, the
District Court dismissed one of plaintiffs' four claims and granted plaintiffs
limited discovery. Defendants moved for summary judgment in April 2007. Summary
judgment was granted in the defendants' favor on July 9, 2007. The plaintiffs
filed a notice of appeal with the Eighth Circuit Court of Appeals (the "Eighth
Circuit") on Aug. 8, 2007. On April 8, 2009, the Eighth Circuit reversed summary
judgment and remanded to the District Court for further proceedings.

In December 2005, without admitting or denying the allegations, American
Express Financial Corporation (AEFC, which is now known as Ameriprise Financial,
Inc. (Ameriprise Financial)), entered into settlement agreements with the
Securities and Exchange Commission (SEC) and Minnesota Department of Commerce
(MDOC) related to market timing activities. As a result, AEFC was censured and
ordered to cease and desist from committing or causing any violations of certain
provisions of the Investment Advisers Act of 1940, the Investment Company Act of
1940, and various Minnesota laws. AEFC agreed to pay disgorgement of $10 million
and civil money penalties of $7 million. AEFC also agreed to retain an
independent distribution consultant to assist in developing a plan for
distribution of all disgorgement and civil penalties ordered by the SEC in
accordance with various undertakings detailed at
http://www.sec.gov/litigation/admin/ia-2451.pdf. Ameriprise Financial and its
affiliates have cooperated with the SEC and the MDOC in these legal proceedings
and have made regular reports to the RiverSource Family of Funds' Boards of
Directors/Trustees.

On November 7, 2008, RiverSource Investments, LLC, a subsidiary of
Ameriprise Financial, Inc., acquired J. & W. Seligman & Co. Incorporated
("Seligman"). In late 2003, Seligman conducted an extensive internal review
concerning mutual fund trading practices. Seligman's review, which covered the
period 2001-2003, noted one arrangement that permitted frequent trading in
certain open-end registered investment companies managed by Seligman (the
"Seligman Funds"); this arrangement was in the process of being closed down by
Seligman before September 2003. Seligman identified three other arrangements
that permitted frequent trading, all of which had been terminated by September
2002. In January 2004, Seligman, on a voluntary basis, publicly disclosed these
four arrangements to its clients and to shareholders of the Seligman Funds.
Seligman 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 2006, the NYAG commenced a civil action in New York State
Supreme Court against Seligman, Seligman Advisors, Inc. (which is now known as
RiverSource Fund Distributors, Inc.), Seligman Data Corp. and Brian T. Zino
(collectively, the "Seligman Parties"), alleging, in substance, that the
Seligman Parties permitted various persons to engage in frequent trading and, as
a result, the prospectus disclosure used by the registered investment companies
then managed by Seligman was and had been misleading. The NYAG included other
related claims and also claimed that the fees charged by Seligman to the
Seligman Funds were excessive. On March 13, 2009, without admitting or denying
any violations of law or wrongdoing, the Seligman Parties entered into a
stipulation of settlement with the NYAG and settled the claims made by the NYAG.
Under the terms of the settlement, Seligman paid $11.3 million to four Seligman
Funds. This settlement resolved all outstanding matters between the Seligman
Parties and the NYAG. In addition to the foregoing matter, the New York staff of
the SEC indicated in September 2005 that it was considering recommending to the
Commissioners of the SEC the instituting of a formal action against Seligman and
Seligman Advisors, Inc. relating to frequent trading in the Seligman Funds.

-48-

Seligman 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 Seligman had previously resolved the underlying issue with the
Independent Directors of the Seligman Funds and made recompense to the affected
Seligman Funds. There have been no further developments with the SEC on this
matter.

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 Funds are 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 Funds or the ability of Ameriprise Financial or
its affiliates to perform under their contracts with the Funds. 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.

There can be no assurance that these matters, or the adverse publicity
associated with them, will not result in increased fund redemptions, reduced
sale of fund shares or other adverse consequences to the Funds managed by
Ameriprise Financial. Further, although we believe proceedings are not likely to
have a material adverse effect on those Funds or the ability of Ameriprise
Financial or its affiliates to perform under their contracts with the Funds,
these proceedings are subject to uncertainties and, as such, we are unable to
estimate the possible loss or range of loss that may result. An adverse outcome
in one or more of these proceedings could result in adverse judgments,
settlements, fines, penalties or other relief that could have a material adverse
effect on the consolidated financial condition or results of operations of
Ameriprise Financial.

-49-

REGISTRATION STATEMENT

A Registration Statement on Form N-2, including any amendments thereto,
relating to the shares of the Fund offered hereby, has been filed by the Fund
with the SEC, Washington, D.C. The Fund's Prospectus and this SAI do not contain
all of the information set forth in the Registration Statement, including any
exhibits and schedules thereto. For further information with respect to the Fund
and the shares offered or to be offered hereby, reference is made to the Fund's
Registration Statement. Statements contained in the Fund's Prospectus and this
SAI as to the contents of any contract or other document referred to are not
necessarily complete and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. Copies of
the Registration Statement may be inspected without charge at the SEC's
principal office in Washington, D.C., and copies of all or any part thereof may
be obtained from the SEC upon the payment of certain fees prescribed by the SEC.

-50-

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

-51-

SELIGMAN PREMIUM TECHNOLOGY GROWTH FUND, INC.

STATEMENT OF ASSETS AND LIABILITIES
[_____], 2009

[to be filed by amendment]

See Notes to Financial Statement.

-52-

SELIGMAN PREMIUM TECHNOLOGY GROWTH FUND, INC.

NOTES TO FINANCIAL STATEMENT

[_____]

NOTE A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1. ORGANIZATION

Seligman Premium Technology Growth Fund, Inc. (the "Fund") was organized as
a Maryland corporation on [_____]. The Fund is registered under the Investment
Company Act of 1940, as amended, as a non-diversified, closed-end management
investment company.

2. ACCOUNTING POLICIES

The preparation of the financial statements in accordance with accounting
principles generally accepted in the United States requires RiverSource
Investments, LLC ("RiverSource Investments" or the "Investment Manager") to make
estimates and assumptions that affect the reported amounts of assets and
liabilities. Actual results may differ from those estimates.

3. CONCENTRATION OF RISK

The Fund may, for cash management purposes, during a reasonable start-up
period following the initial offering, or for defensive purposes, temporarily
hold all or a substantial portion of its assets in cash, high-quality,
short-term money market instruments, including shares of money market funds that
are managed by the Investment Manager, or in high-quality debt securities. The
ability of the issuers of the money market instruments and debt securities held
by the Fund to meet their obligations may be affected by economic developments,
including those particular to a specific industry or region.

Following the start-up period, under normal market conditions, the Fund's
investments will be concentrated in income-producing common equity securities,
preferred securities, convertible securities and non-convertible debt securities
issued by companies deriving the majority of their revenue from the ownership,
construction, financing, management and/or sale of technology and
technology-related services. The value of Fund shares may fluctuate more due to
economic, legal, cultural or technological developments affecting the technology
industry than would the shares of a fund not concentrated in the technology
industry.

NOTE B INVESTMENT MANAGEMENT AGREEMENT

Pursuant to an Investment Management Agreement between RiverSource
Investments and the Fund (the "Investment Management Agreement"), the Fund has
agreed to pay the Investment Manager a management fee payable on a monthly basis
at the annual rate of [_____]% of the Fund's average daily total assets minus
liabilities other than the aggregate indebtedness entered into for purposes of
leverage ("Managed Assets") for the services and facilities it provides. For
this purpose, the liquidation preference of the Preferred Shares is not a
liability or permanent equity.

In addition to the fees of RiverSource Investments, the Fund pays all other
costs and expenses of its operations, including compensation of its Directors
(other than those affiliated with the Investment Manager), custodial expenses,
transfer agency and dividend disbursing expenses, legal fees, expenses of
independent auditors, expenses of repurchasing shares, expenses of issuing any
Preferred Shares, expenses of preparing, printing and distributing Prospectuses,
stockholder reports, notices, proxy statements and reports to governmental
agencies, and taxes, if any.

Because the fees received by the Investment Manager are based on the
Managed Assets of the Fund (including assets represented by the proceeds of any
Financial Leverage), the Investment Manager has a financial

-53-

incentive for the Fund to utilize Financial Leverage, which may create a
conflict of interest between the Investment Manager and the holders of the
Fund's Common Shares. Because holders of Preferred Shares or Borrowings receive
a specified rate of return, the Fund's investment management fees and other
expenses, including expenses incurred in the issuance and maintenance of any
Financial Leverage, are paid only by the Common Stockholders, and not by holders
of Preferred Shares or Borrowings. See "Use of Financial Leverage."

NOTE C ORGANIZATION EXPENSES AND OFFERING COSTS

Based on an estimated Fund offering of [_____] shares, organization and
offering costs are estimated to be $[_____] and $[_____], respectively. The
Investment Manager has agreed to pay all organizational expenses and the amount
by which the aggregate of all of the Fund's offering costs (other than sales
load) exceed [_____] per share. Such amount to be paid by the Investment Manager
is estimated to be $[_____]. The Fund will pay offering costs estimated at
$[_____] from the proceeds of the offering. Offering costs paid by the Fund will
be charged as a reduction of paid-in capital at the completion of the Fund
offering.

NOTE D FEDERAL INCOME TAXES

The Fund intends to qualify as a "Regulated Investment Company" and to
comply with the applicable provisions of the Internal Revenue Code of 1986, as
amended, such that it will not be subject to federal income tax.

-54-

APPENDIX A

RATINGS OF CORPORATE BONDS AND COMMERCIAL PAPER

STANDARD & POOR'S ("S&P") CORPORATE BOND RATINGS

AAA -- Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.

AA -- Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest-rated issues only in a small degree.

A -- Bonds rated A have a strong capacity to pay interest and repay
principal, although they are somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than bonds in higher-rated
categories.

BBB -- Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to pay interest and repay
principal for bonds in this category than for bonds in higher-rated categories.

BB, B, CCC, CC, C -- Bonds rated BB, B, CCC, CC, and C are regarded, on
balance, as predominantly speculative with respect to capacity to pay interest
and repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and C the highest degree of speculation. While
such bonds will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

BB -- Bonds rated BB are less vulnerable to nonpayment than other
speculative issues. However, they face major ongoing uncertainties or exposure
to adverse business, financial, or economic conditions, which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

B -- Bonds rated B are more vulnerable to nonpayment than obligations rated
'BB,' but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.

CCC -- Bonds rated CCC are currently vulnerable to nonpayment and are
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC -- Bonds rated CC are currently highly vulnerable to nonpayment.

C -- Bonds rated C may be used to cover a situation where a bankruptcy
petition has been filed or similar action has been taken, but payments on this
obligation are being continued. A subordinated debt or preferred stock
obligation rated C is currently highly vulnerable to nonpayment. A C rating also
will be assigned to a preferred stock issue in arrears on dividends or sinking
fund payments but that is currently paying.

CI -- The rating CI is reserved for income bonds on which no interest is
being paid.

D -- Bonds rated D are in default, and payment of interest and/or repayment
of principal is in arrears.

Plus (+) Minus (-) -- The ratings above may be modified by the addition of
a plus or minus sign to show relative standing within the major categories.

A-1

S&P COMMERCIAL PAPER RATINGS

A-1 -- This highest category indicates that the degree of safety regarding
timely payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.

A-2 -- Capacity for timely payment on issues with this designation is
satisfactory. However, it is somewhat more susceptible to the adverse effects of
changes in circumstance and economic conditions than issues in the highest
rating category.

A-3 -- Issues carrying this designation have adequate capacity for timely
payment. However, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity for timely payment.

B -- Issues with this rating are regarded as having only speculative
capacity for timely payment.

C -- This rating is assigned to short-term debt obligations with high
vulnerability to nonpayment.

D -- Debt with this rating is in payment default. The D rating category is
used when interest payments or principal payments are not made on the date due,
even if the applicable grace period has not expired, unless it is believed that
such payments will be made during such grace period.

MOODY'S INVESTORS SERVICE, INC. ("MOODY'S") CORPORATE BOND RATINGS

Aaa -- Bonds rated Aaa are judged to be of the best quality. They carry the
smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or an exceptionally stable
margin and principal is secure. While the various protective elements are likely
to change, such changes as can be visualized are most unlikely to impair the
fundamentally strong position of such issues.

Aa -- Bonds rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long-term risks appear somewhat larger than in Aaa securities.

A -- Bonds rated A possess many favorable investment attributes and are to
be considered as upper medium grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment sometime in the future.

Baa -- Bonds rated Baa are considered as medium grade obligations, i.e.,
they are neither highly protected nor poorly secured. Interest payments and
principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba -- Bonds rated Ba are judged to have speculative elements; their future
cannot be considered as well assured. Often the protection of interest and
principal payments may be very moderate and thereby not well safeguarded during
both good and bad times over the future. Uncertainty of position characterizes
bonds in this class.

B -- Bonds rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa -- Bonds rated Caa are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest.

Ca -- Bonds rated Ca represent obligations that are speculative in a high
degree. Such issues are often in default or have other marked shortcomings.

A-2

C -- Bonds rated C are the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.

Modifiers -- Moody's may apply numerical modifiers 1, 2, and 3 in each
generic rating classification from Aa to Caa. The modifier 1 indicates that the
issue ranks in the higher end of its generic rating category; the modifier 2
indicates a mid-range ranking; and the modifier 3 indicates that the issue ranks
in the lower end of its generic rating category.

MOODY'S COMMERCIAL PAPER RATINGS

Prime-1 issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term promissory obligations.
Prime-1 repayment ability will often be evidenced by the following
characteristics:

- Leading market positions in well-established industries.

- High rates of return on funds employed.

- Conservative capitalization structure with moderate reliance
on debt and ample asset protection.

- Broad margins in earnings coverage of fixed financial charges
and high internal cash generation.

- Well-established access to a range of financial markets and
assured sources of alternate liquidity.

Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term promissory obligations.
This will often be evidenced by many of the characteristics cited
above, but to a lesser degree. Earnings trends and coverage ratios,
while sound, will be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

Prime-3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term promissory
obligations. The effects of industry characteristics and market
composition may be more pronounced. Variability in earnings and
profitability may result in changes in the level of debt-protection
measurements and may require relatively high financial leverage.
Adequate alternate liquidity is maintained.

Not Prime -- Issuers rated Not Prime do not fall within any of the Prime
rating categories.

NOTE: A Moody's commercial paper rating may also be assigned as an evaluation
of the demand feature of a short-term or long-term security with a put
option.

FITCH RATINGS ("FITCH") INVESTMENT GRADE BOND RATINGS

AAA: Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is highly unlikely to be affected by foreseeable events.

AA: Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated 'AAA'. Because bonds rated
in the 'AAA' and 'AA' categories are not significantly vulnerable to foreseeable
future developments, short-term debt of these issuers is generally rated 'F1+'.

A-3

A: Bonds considered to be investment grade and of high credit quality. The
obligor's ability to pay interest and repay principal is considered to be
strong, but may be more vulnerable to adverse changes in economic conditions and
circumstances than bonds with higher ratings.

BBB: Bonds considered to be investment grade and of satisfactory credit
quality. The obligor's ability to pay interest and repay principal is considered
to be adequate. Adverse changes in economic conditions and circumstances,
however, are more likely to have adverse impact on these bonds, and therefore,
impair timely payment. The likelihood that the ratings of these bonds will fall
below investment grade is higher than for bonds with higher ratings. This is the
lowest investment grade category.

Plus (+) Minus (-): Plus and minus signs are used with a rating symbol to
indicate the relative position of a credit within the rating category. Plus and
minus signs, however, are not used in the "AAA" category.

NR: Indicates that Fitch does not rate the specific issue.

Withdrawn: A rating will be withdrawn when an issue matures, is called, or
refinanced, or when Fitch Ratings deems the amount of information available to
be inadequate for rating purposes.

Rating Watch: Ratings are placed on FitchAlert to notify investors of an
occurrence that is likely to result in a rating change and the likely direction
of such change. These are designated as "Positive," indicating a potential
upgrade, "Negative," for potential downgrade, or "Evolving," where ratings may
be raised or lowered. Rating Watch is typically resolved over a relatively short
period.

FITCH HIGH YIELD BOND RATINGS

BB: Bonds are considered speculative. The obligor's ability to pay interest
and repay principal may be affected over time by adverse economic changes.
However, business and financial alternatives can be identified, which could
assist the obligor in satisfying its debt service requirements.

B: Bonds are considered highly speculative. A significant credit risk is
present. While bonds in this class are currently meeting debt service
requirements, the probability of continued timely payment of principal and
interest reflects the obligor's limited margin of safety and is contingent upon
a sustained, favorable business and economic environment.

CCC: Bonds have certain identifiable characteristics that, if not remedied,
may lead to default. The ability to meet obligations is solely reliant upon
sustained, favorable business or economic developments.

CC: Bonds are minimally protected. Default in payment of interest and/or
principal seems probable over time.

C: Bonds are in imminent default in payment of interest or principal.

DDD, DD, and D: Bonds are in default on interest and/or principal payments.
Such bonds are extremely speculative and should be valued on the basis of their
ultimate recovery value in liquidation or reorganization of the obligor. 'DDD'
represents the highest potential for recovery on these bonds, and 'D' represents
the lowest potential for recovery.

NR: Indicates that Fitch does not rate the specific issue.

Conditional: A conditional rating is premised on the successful completion
of a project or the occurrence of a specific event.

A-4

FITCH INVESTMENT GRADE SHORT-TERM RATINGS

Fitch's short-term ratings apply to debt obligations that are payable on
demand or have original maturities of generally up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal and
investment notes.

The short-term rating places greater emphasis than a long-term rating on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

F1+: Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely payment.

F1: Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues rated
'F1+'.

F2: Good Credit Quality. Issues carrying this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not as great
as for issues assigned 'F1+' and 'F1' ratings.

F3: Fair Credit Quality. Issues carrying this rating have characteristics
suggesting that the degree of assurance for timely payment is adequate; however,
near-term adverse changes could cause these securities to be rated below
investment grade.

B: Speculative. Minimal capacity for timely payment of financial
commitments, plus vulnerability to near-term adverse changes in financial and
economic conditions.

C: High Default Risk. Default is a real possibility. Capacity for meeting
financial commitments is solely reliant upon a sustained, favorable business and
economic environment.

D: Default. Issues assigned this rating are in actual or imminent payment
default.

NOTES: Bonds which are unrated expose the investor to risks with respect to
capacity to pay interest or repay principal which are similar to the risks of
lower-rated speculative bonds. The Fund is dependent on the Investment Adviser's
judgment, analysis and experience in the evaluation of such bonds.

Investors should note that the assignment of a rating to a bond by a rating
service may not reflect the effect of recent developments on the issuer's
ability to make interest and principal payments.

A-5

PART C - OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(1) Financial Statements

Part A

None

Part B

1. Report of Independent Auditors(1)

2. Statement of Assets and Liabilities(1)

(2) Exhibits

(a) Articles of Incorporation of Registrant dated August 31, 2009(2)

(b) Bylaws of Registrant(2)

(d) Form of Specimen Share Certificate(1)

(e) Dividend Investment Plan of Registrant(1)

(f) Not applicable

(g) Form of Management Agreement between Registrant and RiverSource
Investments, LLC(1)

(h) (1) Form of Underwriting Agreement(1)

(2) Form of Master Agreement Among Underwriters(1)

(3) Form of Master Selected Dealer Agreement(1)

(i) Not applicable

(j) Form of Custodian Agreement(1)

(k) Transfer Agency Agreement (1)

(l) Opinion and Consent of Clifford Chance US LLP(1)

(m) Not applicable

(n) Consent of [_____](1)

(o) Not applicable

(p) Form of Initial Subscription Agreement(1)

A-6

(q) Not applicable

(r) Codes of Ethics of the Fund and the Investment Manager(1)

(s) Powers of Attorney(1)

----------

(1) To be filed by Amendment.

(2) Filed herewith.

ITEM 25. MARKETING ARRANGEMENTS

Reference is made to Exhibit ([_____]) to this Registration Statement to be
filed by amendment.

ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth the estimated expenses to be incurred in
connection with the offering described in this Registration Statement:

SEC Registration fees............................................. $__________
[_____] listing fee............................................... $__________
Printing (other than stock certificates).......................... $__________
Fees and expenses of qualification under state securities laws
(excluding fees of counsel).........................
Accounting fees and expenses...................................... $__________
Legal fees and expenses........................................... $__________
Underwriter expense reimbursement................................. $__________
FINRA fees........................................................ $__________
Miscellaneous..................................................... $__________
-----------
Total.......................................................... $__________
===========

ITEM 27. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT

None.

ITEM 28. NUMBER OF HOLDERS OF SECURITIES

Number of Record
Holders as of
Title of Class _____, 2009
-------------- ----------------

COMMON SHARES, $[20.00] PAR VALUE (AS REGISTERED)............ [_____]

ITEM 29. INDEMNIFICATION

Reference is made to the provisions of Article Twelfth of Registrant's
Articles of Incorporation filed as an exhibit to Registrant's Registration
Statement (as noted in Item 24 above) and Article II of Registrant's Bylaws
filed as an exhibit to Registrant's Registration Statement (as noted in Item 24
above).

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
Registrant pursuant to the foregoing provisions, or otherwise, Registrant has
been advised by the Securities and Exchange Commission that 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 Registrant of expenses incurred or paid
by a director, officer or controlling person of 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,
Registrant will, unless in the opinion of counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question of 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.

A-7

ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT MANAGER

INVESTMENT MANAGER

The Investment Manager, a corporation organized under the laws of Delaware,
acts as Investment Manager to the Registrant. The Registrant is fulfilling the
requirement of this Item 30 to provide a list of the officers and directors of
the Investment Manager, together with information as to any other business,
profession, vocation or employment of a substantial nature engaged in by the
Investment Manager or those officers and directors during the past two years, by
incorporating by reference the information contained in the Form ADV of the
Investment Manager filed with the commission pursuant to the Investment Advisers
Act of 1940, as amended (Commission File No. 801-25943).

ITEM 31. LOCATION OF ACCOUNTS AND RECORDS

The accounts, books and documents required to be maintained by Section
31(a) of the Investment Company Act of 1940 and the Rules promulgated thereunder
are kept in the possession of RiverSource Investments, LLC at its offices at
5228 Ameriprise Financial Center, Minneapolis, Minnesota 55474 or at the
following locations: (1) the offices of the Fund's Board of Directors at
[_____]; (2) [_____], custodian of the Registrant's cash and securities; (3) the
officers of Ameriprise Financial, Inc., 200 Ameriprise Financial Center,
Minneapolis, Minnesota 55474, administrator performing certain administrative,
accounting and record-keeping functions and (4) [_____], shareholder service
agent, maintains shareholder records for the Registrant.

ITEM 32. MANAGEMENT SERVICES

Not applicable.

ITEM 33. UNDERTAKINGS

1. (a) The Registrant undertakes to suspend offering its shares until it amends
its prospectus contained herein if (1) subsequent to the effective date
of this Registration Statement, its net asset value per share declines
more than 10 percent from its net asset value per share as of the
effective date of this Registration Statement or (2) its net asset value
increases to an amount greater than its net proceeds as stated in the
prospectus contained herein.

(b) The Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement;

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.

(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or
the most recent post-effective amendment thereof) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration
Statement; and

(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
Registration Statement or any material change to such
information in the Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.

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(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.

3. Not applicable.

4. Not applicable.

5. (a) Registrant undertakes that, for the purpose of determining any liability
under the Securities Act the information omitted from the form of
prospectus filed as part of the Registration Statement in reliance upon
Rule 430A and contained in the form of prospectus filed by the
Registrant pursuant to Rule 497(h) will be deemed to be a part of the
Registration Statement as of the time it was declared effective.

(b) Registrant undertakes that, for the purpose of determining any liability
under the Securities Act, each post-effective amendment that contains a
form of prospectus will be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such
securities at that time will be deemed to be the initial bona fide
offering thereof.

6. Registrant undertakes to send by first class mail or other means designed
to ensure equally prompt delivery, within two business days of receipt of a
written or oral request, any SAI constituting Part B of this Registration
Statement.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the U.S.
Investment Company Act of 1940, the Registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Minneapolis, and State of Minnesota, on the 4th day
of September, 2009.

SELIGMAN PREMIUM TECHNOLOGY GROWTH FUND,
INC.

By: /s/ Patrick T. Bannigan
------------------------------------
Name: Patrick T. Bannigan
Title: Director and President

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

SIGNATURE TITLE DATE
--------- ----------------------------- -----------------

/s/ Patrick T. Bannigan Director and President
----------------------------------- (Principal Executive Officer) September 4, 2009
Patrick T. Bannigan

/s/ Charles W. Kadlec Director September 4, 2009
-----------------------------------
Charles W. Kadlec

/s/ Scott R. Plummer Director, Vice President, September 4, 2009
----------------------------------- General Counsel and Secretary
Scott R. Plummer

/s/ Jeffrey P. Fox Treasurer September 4, 2009
----------------------------------- (Principal Financial and
Jeffrey P. Fox Accounting Officer)

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