<SEC-DOCUMENT>0000950123-11-051376.txt : 20110518
<SEC-HEADER>0000950123-11-051376.hdr.sgml : 20110518
<ACCEPTANCE-DATETIME>20110518094755
ACCESSION NUMBER:		0000950123-11-051376
CONFORMED SUBMISSION TYPE:	N-2
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20110517
DATE AS OF CHANGE:		20110518

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GABELLI CONVERTIBLE & INCOME SECURITIES FUND INC
		CENTRAL INDEX KEY:			0000845611
		IRS NUMBER:				133523423
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-174294
		FILM NUMBER:		11853617

	BUSINESS ADDRESS:	
		STREET 1:		ONE CORPORATE CENTER
		CITY:			RYE
		STATE:			NY
		ZIP:			10580
		BUSINESS PHONE:		2123098408

	MAIL ADDRESS:	
		STREET 1:		ONE CORPORATE CENTER
		CITY:			RYE YORK
		STATE:			NY
		ZIP:			10580

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GABELLI CONVERTIBLE SECURITIES FUND INC /DE
		DATE OF NAME CHANGE:	19970507

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GABELLI SERIES FUNDS INC
		DATE OF NAME CHANGE:	19920703

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GABELLI CONVERTIBLE & INCOME SECURITIES FUND INC
		CENTRAL INDEX KEY:			0000845611
		IRS NUMBER:				133523423
		STATE OF INCORPORATION:			MD
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		N-2
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-05715
		FILM NUMBER:		11853618

	BUSINESS ADDRESS:	
		STREET 1:		ONE CORPORATE CENTER
		CITY:			RYE
		STATE:			NY
		ZIP:			10580
		BUSINESS PHONE:		2123098408

	MAIL ADDRESS:	
		STREET 1:		ONE CORPORATE CENTER
		CITY:			RYE YORK
		STATE:			NY
		ZIP:			10580

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GABELLI CONVERTIBLE SECURITIES FUND INC /DE
		DATE OF NAME CHANGE:	19970507

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	GABELLI SERIES FUNDS INC
		DATE OF NAME CHANGE:	19920703
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-2
<SEQUENCE>1
<FILENAME>y91316nv2.htm
<DESCRIPTION>FORM N-2
<TEXT>
<HTML>
<HEAD>
<TITLE>nv2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <!-- XBRL,dc --><B>As filed with the Securities and Exchange
    Commission on May&#160;17, 2011</B>
</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><!-- /XBRL,dc -->Securities Act File
    <FONT style="white-space: nowrap">No.&#160;333-&#160;&#160;&#160;&#160;&#160;&#160;</FONT></B>
</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Investment Company Act File
    <FONT style="white-space: nowrap">No.&#160;811-05715</FONT></B>
</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 14pt">UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 12pt">Washington,&#160;D.C.
    20549</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 18pt"><FONT style="white-space: nowrap">Form&#160;N-2</FONT></FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <FONT style="font-family: Wingdings; font-variant: normal">&#254;</FONT>&#160;Registration
    Statement under the Securities Act of 1933
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>&#160;Pre-Effective
    Amendment No.&#160;
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <FONT style="font-family: Wingdings; font-variant: normal">&#111;</FONT>&#160;Post-Effective
    Amendment No.
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    and/or
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <FONT style="font-family: Wingdings; font-variant: normal">&#254;</FONT>&#160;Registration
    Statement under the Investment Company Act of 1940
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <FONT style="font-family: Wingdings; font-variant: normal">&#254;</FONT>&#160;Amendment
    No.&#160;14
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (Check Appropriate Box or Boxes)
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 15pt">THE GABELLI CONVERTIBLE AND
    INCOME SECURITIES FUND&#160;INC.</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I><FONT style="font-size: 8pt">(Exact Name of Registrant as
    Specified in Charter)</FONT></I>
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>One Corporate Center</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Rye, New York
    <FONT style="white-space: nowrap">10580-1422</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I><FONT style="font-size: 8pt">(Address of Principal Executive
    Offices)</FONT></I>
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="white-space: nowrap">(800)&#160;422-3554</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>(Registrant&#146;s Telephone Number, Including Area Code)</B>
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Bruce N. Alpert</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>The Gabelli Convertible and Income Securities
    Fund&#160;Inc.</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>One Corporate Center</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Rye, New York
    <FONT style="white-space: nowrap">10580-1422</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="white-space: nowrap">(914)&#160;921-5100</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I><FONT style="font-size: 8pt">(Name and Address of Agent for
    Service)</FONT></I>
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><I>Copies to:</I></B>
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="50%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="49%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="center" valign="top">
    <B>Richard T. Prins,&#160;Esq.<BR>
    Skadden, Arps, Slate, Meagher&#160;&#038; Flom LLP<BR>
    Four Times Square<BR>
    New York, New York 10036<BR>
    <FONT style="white-space: nowrap">(212)&#160;735-3000</FONT></B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>Christopher Michailoff,&#160;Esq.<BR>
    The Gabelli Convertible and Income Securities Fund Inc.<BR>
    One Corporate Center<BR>
    Rye, New York 10580-1422<BR>
    (914) 921-5100 </B>
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Approximate date of proposed public
    offering:</B>&#160;&#160;As soon as practicable after the
    effective date of this Registration Statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If any securities being registered on this form will be offered
    on a delayed or continuous basis in reliance on Rule&#160;415
    under the Securities Act of 1933, as amended, other than
    securities offered in connection with a dividend reinvestment
    plan, check the following
    box.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#254;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    It is proposed that this filing will become effective (check
    appropriate box)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <FONT style="font-family: Wingdings; font-variant: normal">&#254;</FONT>&#160;When
    declared effective pursuant to section&#160;8(c).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If appropriate, check the following box:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [&#160;]&#160;This [post-effective] amendment designates a new
    effective date for a previously filed [post-effective amendment]
    [registration statement].
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [&#160;]&#160;This form is filed to register additional
    securities for an offering pursuant to Rule&#160;462(b) under
    the Securities Act and the Securities Act registration number of
    the earlier effective registration statement for the same
    offering
    is&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">CALCULATION
    OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="44%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutterleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutterright -->
    <TD width="12%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Proposed Maximum<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Proposed Maximum<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 3px double #000000">
    <B>Amount of<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Amount being<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Offering<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Aggregate<BR>
    </B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Registration<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
    <B>Title of Securities</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Registered</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Price per Share</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Offering Price&#160;(1)</B>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Fee&#160;(1)</B>
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="top" style="border-top: 1px solid #000000">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Common Shares, $0.001&#160;par value&#160;(2)
</DIV>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    $100,000,000
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
    $11,610&#160;(3)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top" style="border-top: 1px solid #000000">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Preferred Shares, $0.001&#160;par value&#160;(2)
</DIV>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top" style="border-top: 1px solid #000000">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    Notes&#160;(2)
</DIV>
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-right: 1px solid #000000; padding-right: 2pt; border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-top: 1px solid #000000">
&nbsp;
</TD>
</TR>
<TR style="font-size: 1pt">
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom" style="border-top: 3px double #000000">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="2%"></TD>
    <TD width="98%"></TD>
</TR>

<TR valign="top" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>    (1)&#160;
</TD>
    <TD align="left">    Estimated pursuant to Rule&#160;457 solely for the purpose of
    determining the registration fee. The proposed maximum offering
    price per security will be determined, from time to time, by the
    Registrant in connection with the sale by the Registrant of the
    securities registered under this registration statement.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>    (2)&#160;
</TD>
    <TD align="left">    There is being registered hereunder an indeterminate principal
    amount of shares or notes as may be sold, from time to time. In
    no event will the aggregate offering price of all securities
    issued from time to time pursuant to this registration statement
    exceed $100,000,000.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>    (3)&#160;
</TD>
    <TD align="left">    Includes a payment of $7,680 and an unused registration fee of
    $3,930 that was previously paid in connection with the filing of
    a registration statement for the Registrant on March&#160;28,
    2008.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
    DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE
    UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH
    SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
    THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION&#160;8(a)
    OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
    STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES
    AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID
    SECTION&#160;8(a), MAY DETERMINE.
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 94%; margin-left: 3%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD>
<FONT style="font-size: 8pt; color: #E8112D">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 and sale is not permitted.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 91%; margin-left: 4%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Subject to Completion,</B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Preliminary Base Prospectus dated May&#160;17, 2011</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>PROSPECTUS</B>
</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B> <IMG src="y91316y9131600.gif" alt="(GABELLI LOGO)"> </B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 14pt">$100,000,000</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 20pt">The Gabelli Convertible and
    Income Securities Fund Inc.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 14pt">Common Stock</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 14pt">Preferred Stock</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 14pt">Notes</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 14%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Investment Objective.</I>&#160;&#160;The Gabelli Convertible
    and Income Securities Fund&#160;Inc. (the &#147;Fund&#148;) is a
    diversified, closed-end management investment company registered
    under the Investment Company Act of 1940, as amended (the
    &#147;1940 Act&#148;). The Fund&#146;s investment objective is
    to seek a high level of total return on its assets. The
    Fund&#146;s investments are selected by its Investment Adviser,
    Gabelli Funds, LLC (the &#147;Investment Adviser&#148;). The
    Fund seeks to achieve its investment objective through a
    combination of current income and capital appreciation. Under
    normal circumstances the Fund will invest at least 80% of its
    total assets in securities that are convertible into or
    represent the right to acquire common stock, and in other debt
    or equity securities that are expected to periodically accrue or
    generate income for their holders. We cannot assure you that the
    Fund will achieve its investment objective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We may offer, from time to time, in one or more offerings, our
    common stock or preferred stock, each with a par value of $0.001
    per share (together, &#147;shares&#148;), or our promissory
    notes (&#147;notes&#148;). Shares or notes may be offered at
    prices and on terms to be set forth in one or more supplements
    to this Prospectus (each a &#147;Prospectus Supplement&#148;).
    You should read this Prospectus and the applicable Prospectus
    Supplement carefully before you invest in our shares or notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Our shares or notes may be offered directly to one or more
    purchasers, through agents designated from time to time by us,
    or to or through underwriters or dealers. The Prospectus
    Supplement relating to the offering will identify any agents or
    underwriters involved in the sale of our shares or notes, and
    will set forth any applicable purchase price, fee, commission,
    or discount arrangement between us and our agents or
    underwriters, or among our underwriters, or the basis upon which
    such amount may be calculated. The Prospectus Supplement
    relating to any sale of preferred shares will set forth the
    liquidation preference and information about the dividend
    period, dividend rate, any call protection or non-call period
    and other matters. The Prospectus Supplement relating to any
    sale of notes will set forth the principal amount, interest
    rate, interest payment dates, prepayment protections (if any)
    and other matters. We may not sell any of our shares or notes
    through agents, underwriters or dealers without delivery of a
    Prospectus Supplement describing the method and terms of the
    particular offering of our shares or notes. Our common shares
    are listed on the New York Stock Exchange (the &#147;NYSE&#148;)
    under the symbol &#147;GCV&#148; and our Series&#160;B Preferred
    Shares (&#147;Series&#160;B Preferred&#148;) are listed on the
    NYSE under the symbol &#147;GCV Pr B&#148;. On May&#160;16,
    2011, the last reported sale price of our common shares was
    $6.49 and the last reported sale prices of our Series&#160;B
    Preferred was $25.21.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Shares of closed-end funds often trade at a discount from net
    asset value. This creates a risk of loss for an investor
    purchasing shares in a public offering.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 11pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Investing in the Fund&#146;s shares or notes involves risks.
    See &#147;Risk Factors and Special Considerations&#148; on
    page&#160;27 for factors that should be considered before
    investing in shares or notes of the Fund.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>Neither the Securities and Exchange Commission (the
    &#147;SEC&#148;) nor any state securities commission has
    approved or disapproved these securities or determined if this
    prospectus is truthful or complete. Any representation to the
    contrary is a criminal offense.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This Prospectus may not be used to consummate sales of shares or
    notes by us through agents, underwriters or dealers unless
    accompanied by a Prospectus Supplement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This Prospectus sets forth concisely the information about the
    Fund that a prospective investor should know before investing.
    You should read this Prospectus, which contains important
    information about the Fund, before deciding whether to invest in
    the shares or notes, and retain it for future reference. A
    Statement of Additional Information, dated May&#160;17, 2011,
    containing additional information about the Fund, has been filed
    with the SEC and is incorporated by reference in its entirety
    into this Prospectus. You may request a free copy of our annual
    and semi-annual reports, request a free copy of the Statement of
    Additional Information, the table of contents of which is on
    page&#160;56 of this Prospectus, request other information about
    us and make shareholder inquiries by calling (800)&#160;GABELLI
    <FONT style="white-space: nowrap">(422-3554)</FONT>
    or by writing to the Fund, or obtain a copy (and other
    information regarding the Fund) from the SEC&#146;s web site
    <FONT style="white-space: nowrap">(http://www.sec.gov).</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Our preferred shares and notes do not represent a deposit 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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 3%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>You should rely only on the information contained or
    incorporated by reference in this Prospectus. The Fund has not
    authorized anyone to provide you with different information. The
    Fund is not making an offer to sell these securities in any
    state where the offer or sale is not permitted. You should not
    assume that the information contained in this Prospectus is
    accurate as of any date other than the date of this
    Prospectus.</B>
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 91%; margin-left: 4%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="Y91316tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316101'>Prospectus Summary</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316102'>Summary of Fund&#160;Expenses</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316103'>Financial Highlights</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316104'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316105'>The Fund</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316106'>Investment Objective and Policies</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    18
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316107'>Risk Factors and Special Considerations</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    27
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316108'>How the Fund&#160;Manages Risk</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316109'>Management of the Fund</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    39
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316110'>Dividends and Distributions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316111'>Automatic Dividend Reinvestment and Voluntary
    Cash Purchase Plan</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    43
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316112'>Description of the Shares&#160;and Notes</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    44
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316113'>Taxation</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    56
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316114'>Closed-End Fund&#160;Structure</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    60
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316115'>Repurchase of Shares</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316116'>Net Asset Value</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316117'>Custodian, Transfer Agent, Auction Agent and
    Dividend-Disbursing Agent</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    62
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316118'>Plan of Distribution</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    62
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316119'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316120'>Independent Registered Public Accounting Firm</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316121'>Additional Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316122'>Privacy Principles of the Fund</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    64
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316123'>Special Note&#160;Regarding Forward-Looking
    Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316124'>Table of Contents of Statement of Additional
    Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    66
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316125'>Appendix&#160;A Corporate Bond Ratings</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>
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    <BR>
    i
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='Y91316101'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUMMARY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>This is only a summary. This summary does not contain all of
    the information that you should consider before investing in our
    shares or notes. You should review the more detailed information
    contained in this Prospectus and the Statement of Additional
    Information, dated May&#160;17, 2011 (the &#147;SAI&#148;).</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Gabelli Convertible and Income Securities Fund&#160;Inc. is
    a closed-end, diversified management investment company
    organized as a Maryland corporation on December&#160;19, 1988.
    Prior to March&#160;31, 1995, The Gabelli Convertible and Income
    Securities Fund&#160;Inc. operated as an open-end, diversified,
    management investment company. Throughout this prospectus, we
    refer to The Gabelli Convertible and Income Securities
    Fund&#160;Inc. as the &#147;Fund&#148; or as &#147;we.&#148; See
    &#147;The Fund.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s outstanding common stock (&#147;common
    shares&#148;), par value $0.001 per share, is listed on the New
    York Stock Exchange under the symbol &#147;GCV.&#148; On
    May&#160;16, 2011, the last reported sale price of our common
    shares was $6.49. As of December&#160;31, 2010, the net assets
    of the Fund attributable to its common shares were $80,408,164.
    As of December&#160;31, 2010, the Fund had outstanding
    13,377,323 common shares and 965,548&#160;shares of 6%
    Series&#160;B Cumulative Preferred Stock, liquidation preference
    $25 per share (the &#147;Series&#160;B Preferred&#148;). The
    Fund previously had 600,000&#160;shares of Series&#160;A
    Preferred Stock (the &#147;Series&#160;A Preferred&#148;)
    outstanding and 1,000&#160;shares of Series&#160;C Auction Rate
    Cumulative Preferred Stock, liquidation preference $25,000 per
    share (the &#147;Series&#160;C Auction Rate Preferred&#148;);
    however all 600,000&#160;shares of the Series&#160;A Preferred
    were redeemed by the Fund on February&#160;11, 2003, and all
    1,000&#160;shares of Series&#160;C Auction Rate Preferred were
    redeemed by the Fund on June&#160;25, 2008.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Offering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We may offer, from time to time, in one or more offerings, our
    common or preferred shares (together, &#147;shares&#148;), each
    $0.001&#160;par value per share, or our promissory notes
    (&#147;notes&#148;). The preferred shares may either be fixed
    rate preferred shares or variable rate preferred shares. The
    preferred shares and notes may be offered at prices and on terms
    to be set forth in one or more supplements to this Prospectus
    (each a &#147;Prospectus Supplement&#148;). You should read this
    Prospectus and the applicable Prospectus Supplement carefully
    before you invest in our shares or notes. Our preferred shares
    and notes may be offered directly to one or more purchasers,
    through agents designated from time to time by us or to or
    through underwriters, or dealers. The Prospectus Supplement
    relating to the offering will identify any agents, underwriters,
    or dealers involved in the sale of our shares or notes, and will
    set forth any applicable purchase price, fee, commission or
    discount arrangement between us and our agents or underwriters,
    or among our underwriters, or the basis upon which such amount
    may be calculated. The Prospectus Supplement relating to any
    sale of preferred shares will set forth the liquidation
    preference and information about the dividend period, dividend
    rate, any call protection or non-call period and other matters.
    The Prospectus Supplement relating to any sale of notes will set
    forth the principal amount, interest rate, interest payment
    dates, prepayment protections (if any) and other matters. We may
    not sell any of our shares or notes through agents, underwriters
    or dealers without delivery of a Prospectus Supplement
    describing the method and terms of the particular offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Objective and Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The investment objective of the Fund is to seek a high level of
    total return on its assets. The Fund will seek to achieve this
    objective through a combination of current income and capital
    appreciation by investing primarily in convertible and other
    income producing securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Under normal circumstances the Fund will invest at least 80% of
    the value of its total assets (taken at current value) in
    &#147;convertible securities,&#148; i.e., securities (bonds,
    debentures, notes, stocks and other similar securities) that are
    convertible into common stock or other equity securities, and
    &#147;income securities,&#148; i.e., nonconvertible debt or
    equity securities having a history of regular payments or
    accrual of income to holders. No assurance can be given that the
    Fund will achieve its investment objective.
</DIV>
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    <BR>
    1
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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    <B><FONT style="font-family: 'Times New Roman', Times">Preferred
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Currently, 1,995,000&#160;shares of the Fund&#146;s capital
    stock, which include the preferred shares being registered by
    this registration statement, have been classified by the Board
    of Directors of the Fund (the &#147;Board&#148;) or any duly
    authorized committee thereof as preferred shares, par value
    $0.001 per share. The Fund&#146;s Board may reclassify
    authorized and unissued shares of the Fund, previously
    classified as common shares, as preferred shares prior to the
    completion of any offering. The terms of each series of
    preferred shares may be fixed by the Board and may materially
    limit <FONT style="white-space: nowrap">and/or</FONT>
    qualify the rights of holders of the Fund&#146;s common shares.
    If the Fund&#146;s Board determines that it may be advantageous
    to the holders of the Fund&#146;s common shares for the Fund to
    utilize additional leverage, the Fund may issue additional
    series of fixed rate preferred shares or additional series of
    variable rate preferred shares. Any fixed rate preferred shares
    or variable rate preferred shares issued by the Fund will pay,
    as applicable, distributions at a fixed rate or at rates that
    will be reset frequently based on short-term interest rates.
    Leverage creates a greater risk of loss as well as a potential
    for more gains for the common shares than if leverage were not
    used. See &#147;Risk Factors and Special
    Considerations&#151;Leverage Risk.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Payments
    on Notes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>General.</I>&#160;&#160;Under Maryland law and our charter,
    we may borrow money without prior approval of holders of common
    and preferred shares. We may issue debt securities, including
    notes, or other evidence of indebtedness and may secure any such
    notes or borrowings by mortgaging, pledging or otherwise
    subjecting as security our assets to the extent permitted by the
    Investment Company Act of 1940, as amended (the &#147;1940
    Act&#148;) or rating agency guidelines. Any borrowings,
    including, without limitation, the notes, will rank senior to
    the preferred shares and the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Interest.</I>&#160;&#160;The Prospectus Supplement will
    describe the interest payment provisions relating to notes.
    Interest on notes will be payable when due as described in the
    related Prospectus Supplement. If we do not pay interest when
    due, it will trigger an event of default and we will be
    restricted from declaring dividends and making other
    distributions with respect to our common shares and preferred
    shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Dividends
    and Distributions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Preferred Share Distributions.</I>&#160;&#160;Under current
    law, all preferred shares of the Fund must have the same
    seniority with respect to distributions. Accordingly, no full
    distribution will be declared or paid on any series of preferred
    shares of the Fund for any dividend period, or part thereof,
    unless full cumulative dividends due through the most recent
    dividend payment dates for all series of outstanding preferred
    shares of the Fund are declared and paid. If full cumulative
    distributions due have not been declared and made on all
    outstanding preferred shares of the Fund, any distributions on
    such preferred shares will be made as nearly pro rata as
    possible in proportion to the respective amounts of
    distributions accumulated but unmade on each such series of
    preferred shares on the relevant dividend date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In the event that for any calendar year the total distributions
    on the Fund&#146;s preferred shares exceed the Fund&#146;s
    current and accumulated earnings and profits, the excess
    distributions will generally be treated as a tax-free return of
    capital (to the extent of the shareholder&#146;s tax basis in
    his or her shares). The amount treated as a tax-free return of
    capital will reduce a shareholder&#146;s adjusted tax basis in
    his or her preferred shares, thereby increasing the
    shareholder&#146;s potential gain or reducing his or her
    potential loss on the sale of the shares. The distributions to
    the Fund&#146;s preferred shareholders for the fiscal year ended
    December&#160;31, 2010, were comprised exclusively of net
    investment income and did not include any return of capital.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Fixed Rate Preferred Shares.</I>&#160;&#160;Distributions on
    fixed rate preferred shares, at the applicable annual rate of
    the per share liquidation preference, are cumulative from the
    original issue date and are payable, when, as and if declared by
    the Board, out of funds legally available therefor.
</DIV>
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    <BR>
    2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Variable Rate Preferred Shares.</I>&#160;&#160;The holders of
    variable rate preferred shares are entitled to receive cash
    distributions, stated at annual rates of the applicable per
    share liquidation preference, that vary from dividend period to
    dividend period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Common Share Distributions.</I>&#160;&#160;In order to allow
    its holders of common shares to realize a predictable, but not
    assured, level of cash flow and some liquidity periodically on
    their investment without having to sell shares, the Fund has
    adopted a policy, which may be modified at any time by its
    Board, of paying a minimum annual distribution of 8% of the
    average net asset value of the Fund to common shareholders. In
    the event the Fund does not generate a total return from
    dividends and interest received and net realized capital gains
    in an amount equal to or in excess of its stated distribution in
    a given year, the Fund may return capital as part of such
    distribution, which may have the effect of decreasing the asset
    coverage per share with respect to the Fund&#146;s preferred
    shares. Any return of capital that is a component of a
    distribution is not sourced from realized or unrealized profits
    of the Fund and that portion should not be considered by
    investors as yield or total return on their investment in the
    Fund. Shareholders should not assume that a distribution from
    the Fund is comprised exclusively of net profits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    For the fiscal year ended December&#160;31, 2010, the Fund made
    distributions of $0.47 per common share, of which $0.42
    constituted a return of capital. The composition of each
    distribution is estimated based on the earnings of the Fund as
    of the record date for each distribution. The actual composition
    of each of the current year&#146;s distributions will be based
    on the Fund&#146;s investment activity through the end of the
    calendar year. The Fund&#146;s Board monitors and reviews the
    Fund&#146;s common share distribution policy on a regular basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Limitations on Distributions.</I>&#160;&#160;If at any time
    the Fund has borrowings outstanding, the Fund will be prohibited
    from paying any distributions on any of its common shares (other
    than in additional shares) and from repurchasing any of its
    common shares or preferred shares, unless the value of its total
    assets, less certain ordinary course liabilities, exceed 300% of
    the amount of the debt outstanding and exceed 200% of the sum of
    the amount of debt and preferred shares outstanding. In
    addition, in such circumstances the Fund will be prohibited from
    paying any distributions on its preferred shares unless the
    value of its total assets, less certain ordinary course
    liabilities, exceed 200% of the amount of debt outstanding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Treatment of Interest Payments on Notes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Noteholders will be required to include payments of interest on
    the notes in their gross income in accordance with their method
    of accounting for U.S.&#160;federal income tax purposes. For a
    more detailed discussion, see &#147;Taxation.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Treatment of Share Distributions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund expects that distributions on the common and preferred
    shares will consist of (i)&#160;long-term capital gain (gain
    from the sale of a capital asset held longer than
    12&#160;months), (ii)&#160;qualified dividend income (dividend
    income from certain domestic and foreign corporations) and
    (iii)&#160;investment company taxable income (other than
    qualified dividend income), including interest income,
    short-term capital gain and income from certain hedging and
    interest rate transactions. For individuals, the maximum federal
    income tax rate on long-term capital gain is currently 15%, on
    qualified dividend income is currently 15%, and on ordinary
    income (such as distributions from investment company taxable
    income that are not eligible for treatment as qualified dividend
    income) is currently 35%. Under current law, these tax rates are
    scheduled to apply through 2012. We cannot assure you, however,
    as to what percentage of the distributions paid on the common or
    preferred shares will consist of long-term capital gain and
    qualified dividend income, which are taxed at lower rates for
    individuals than ordinary income. For a more detailed
    discussion, see &#147;Taxation.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Use of
    Proceeds</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund will use the net proceeds from the offering to purchase
    additional portfolio securities in accordance with its
    investment objective and policies. Proceeds will be invested as
    appropriate investment opportunities are identified, which is
    expected to be substantially completed within three months;
    however,
</DIV>
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    <BR>
    3
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    changes in market conditions could result in the Fund&#146;s
    anticipated investment period extending to as long as six
    months. The Fund may also use net proceeds to redeem its
    Series&#160;B Preferred. See &#147;Use of Proceeds.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Exchange
    Listing</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s outstanding common shares are listed on the NYSE
    under the trading or &#147;ticker&#148; symbol &#147;GCV&#148;
    and our Series&#160;B Preferred are listed on the NYSE under the
    symbol &#147;GCV Pr B&#148;. See &#147;Description of the
    Shares.&#148; Any additional series of fixed rate preferred
    shares issued by the Fund would also likely be listed on the
    NYSE. Variable rate preferred shares and notes will not likely
    be listed on a stock exchange.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Market
    Price of Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Common shares of closed-end investment companies often trade at
    prices lower than their net asset value. Common shares of
    closed-end investment companies may trade during some periods at
    prices higher than their net asset value and during other
    periods at prices lower than their net asset value. The Fund
    cannot assure you that its common shares will trade at a price
    higher than or equal to net asset value. The Fund&#146;s net
    asset value will be reduced immediately following this offering
    by the sales load and the amount of the offering expenses paid
    by the Fund. See &#147;Use of Proceeds.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition to net asset value, the market price of the
    Fund&#146;s common shares may be affected by such factors as the
    Fund&#146;s dividend and distribution levels (which are affected
    by expenses) and stability, market liquidity, market supply and
    demand, unrealized gains, general market and economic conditions
    and other factors. See &#147;Risk Factors and Special
    Considerations,&#148; &#147;Description of Capital Stock and
    Notes&#148; and &#147;Repurchase of Shares.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Risk
    Factors and Special Considerations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Risk is inherent in all investing. Therefore, before investing
    in shares or notes of the Fund, you should consider the risks
    carefully. See &#147;Risk Factors and Special
    Considerations.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Special Risk to Holders of Notes.</I>&#160;&#160;An
    investment in our notes is subject to special risks. There may
    not be an established market for our notes. To the extent our
    notes trade, they may trade at a price either higher or lower
    than their principal amounts depending on interest rates, the
    rating (if any) on such notes and other factors. See &#147;Risk
    Factors and Special Considerations&#151;Special Risks to Holders
    of Notes.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Special Risk to Holders of Fixed Rate Preferred
    Shares.</I>&#160;&#160;Prior to the offering of any additional
    series of fixed rate preferred shares, there will be no public
    market for such shares. During an initial period, not expected
    to exceed 30&#160;days after the date of initial issuance, such
    shares may not be listed on any securities exchange.
    Consequently, an investment in such shares may be illiquid
    during such period. Fixed rate preferred shares may trade at a
    premium to or discount from liquidation preference for a variety
    of reasons, including changes in interest rates. See &#147;Risk
    Factors and Special Considerations&#151;Special Risks to Holders
    of Fixed Rate Preferred Shares.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Special Risk to Holders of Variable Rate Preferred
    Shares.</I>&#160;&#160;In the event any auction-rate preferred
    shares are issued, you may not be able to sell your auction-rate
    preferred shares at an auction if the auction fails, i.e., if
    more auction-rate preferred shares are offered for sale than
    there are buyers for those shares. In the event any auction-rate
    preferred shares are issued, if you try to sell your
    auction-rate preferred shares between auctions, you may not be
    able sell them or, if you are able to sell them, you may not be
    able to do so for their liquidation preference per share or such
    amount per share plus accumulated dividends. Most auction-rate
    preferred share auctions have been unable to hold successful
    auctions and holders of such shares have suffered reduced
    liquidity. There can be no assurance that liquidity will
    improve. See &#147;Risk Factors and Special
    Considerations&#151;Special Risks to Holders of Variable Rate
    Preferred Shares.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Common Share Repurchases.</I>&#160;&#160;Repurchases of
    common shares by the Fund may reduce the net asset coverage of
    the notes and preferred shares, which could adversely affect
    their liquidity or market prices. See
</DIV>
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    <BR>
    4
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    &#147;Risk Factors and Special Considerations&#151;Special Risks
    to Holders of Notes and Preferred Shares&#151;Common Share
    Repurchases.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Common Share Distribution Policy.</I>&#160;&#160;In the event
    the Fund does not generate a total return from dividends and
    interest received and net realized capital gains in an amount at
    least equal to the greater of its stated distribution policy or
    the minimum distribution requirements of the Code in a given
    year, the Fund may return capital as part of its distribution.
    This would decrease the asset coverage per share with respect to
    the Fund&#146;s notes or preferred shares, which could adversely
    affect their liquidity or market prices. See &#147;Risk Factors
    and Special Considerations&#151;Special Risks to Holders of
    Notes and Preferred Shares&#151;Common Share Distribution
    Policy.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Credit Quality Ratings.</I>&#160;&#160;In order to obtain and
    maintain attractive credit quality ratings for preferred shares
    or borrowings, the Fund&#146;s portfolio must satisfy
    over-collateralization tests established by the relevant rating
    agencies. These tests are more difficult to satisfy to the
    extent the Fund&#146;s portfolio securities are of lower credit
    quality, longer maturity or not diversified by issuer and
    industry. These guidelines could affect portfolio decisions and
    may be more stringent than those imposed by the 1940 Act. With
    respect to ratings (if any) of the notes or preferred shares, a
    rating by a ratings agency does not eliminate or necessarily
    mitigate the risks of investing in our shares or notes, and a
    rating may not fully or accurately reflect all of the
    securities&#146; credit risks. A rating does not address the
    liquidity or any other market risks of the securities being
    rated. A rating agency could downgrade the rating of our notes
    or preferred shares, which may make such securities less liquid
    in the secondary market. If a rating agency downgrades the
    rating assigned to our preferred shares or notes, we may alter
    our portfolio or redeem the preferred shares or notes under
    certain circumstances. See &#147;Risk Factors and Special
    Considerations&#151;Special Risks to Holders of Notes and
    Preferred Shares&#151;Credit Quality Ratings.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Preferred Shares&#160;Subordinated to Debt
    Securities.</I>&#160;&#160;As provided in the 1940 Act, and
    subject to compliance with the Fund&#146;s investment
    limitations, the Fund may issue debt securities. In the event
    the Fund were to issue such securities, the Fund&#146;s
    obligations to make distributions and, upon liquidation of the
    Fund, liquidation payments in respect of its preferred shares,
    would be subordinate to the Fund&#146;s obligations to make any
    principal and interest payments due and owing with respect to
    its outstanding debt securities. Accordingly, the Fund&#146;s
    issuance of debt securities would have the effect of creating
    special risks for the Fund&#146;s preferred shareholders that
    would not be present in a capital structure that did not include
    such securities. See &#147;Risk Factors and Special
    Considerations&#151;Special Risks of Notes to Holders of
    Preferred Shares.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Restrictions on Dividends and Other
    Distributions.</I>&#160;&#160;Restrictions imposed on the
    declaration and payment of dividends or other distributions to
    the holders of the Fund&#146;s common shares and preferred
    shares, both by the 1940 Act and by requirements imposed by
    rating agencies, might impair the Fund&#146;s ability to
    maintain its qualification as a regulated investment company for
    U.S.&#160;federal income tax purposes. While the Fund intends to
    redeem its preferred shares or prepay its notes to the extent
    necessary to enable the Fund to distribute its income as
    required to maintain its qualification as a regulated investment
    company under the Internal Revenue Code of 1986, as amended (the
    &#147;Code&#148;), there can be no assurance that such actions
    can be effected in time to meet the Code requirements. See
    &#147;Taxation&#148; in the SAI.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Leverage Risk.</I>&#160;&#160;The Fund currently uses, and
    intends to continue to use, financial leverage for investment
    purposes by issuing preferred shares and may also issue debt
    securities for that purpose. As of March&#160;31, 2011, the
    amount of leverage represented approximately 29% of the
    Fund&#146;s net assets. The Fund&#146;s leveraged capital
    structure creates special risks not associated with unleveraged
    funds having a similar investment objective and policies. These
    include the possibility of greater loss and the likelihood of
    higher volatility of the net asset value of the Fund and the
    asset coverage for the preferred shares. Such volatility may
    increase the likelihood of the Fund having to sell investments
    in order to meet its obligations to make distributions on the
    preferred shares or principal or interest payments on debt
    securities, or to redeem preferred shares or repay debt, when it
    may be disadvantageous to do so. The use of leverage magnifies
    both the favorable and unfavorable effects of price movements in
    the investments made by the Fund. To the extent that the Fund
    determines to employ leverage in its investment operations, the
    Fund will be subject to substantial
</DIV>
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    <BR>
    5
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    risk of loss. The Fund cannot assure you that borrowings or the
    issuance of shares or notes will result in a higher yield or
    return to the holders of the common shares. Also, if the Fund is
    utilizing leverage, a decline in net asset value could affect
    the ability of the Fund to make common share distributions and
    such a failure to make distributions could result in the Fund
    ceasing to qualify as a regulated investment company under the
    Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The issuance of preferred shares or notes causes the net asset
    value and market value of the common shares to become more
    volatile. If the interest rate on the notes or the dividend rate
    on the preferred shares approaches the net rate of return on the
    Fund&#146;s investment portfolio, the benefit of leverage to the
    holders of the common shares would be reduced. If the interest
    rate on the notes or the dividend rate on the preferred shares
    plus the management fee annual rate of 1.00% (as applicable)
    exceeds the net rate of return on the Fund&#146;s portfolio, the
    leverage will result in a lower rate of return to the holders of
    common shares than if the Fund had not issued preferred shares
    or notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any decline in the net asset value of the Fund&#146;s
    investments would be borne entirely by the holders of common
    shares. Therefore, if the market value of the Fund&#146;s
    portfolio declines, the leverage will result in a greater
    decrease in net asset value to the holders of common shares than
    if the Fund were not leveraged. This greater net asset value
    decrease will also tend to cause a greater decline in the market
    price for the common shares. The Fund might be in danger of
    failing to maintain the required asset coverage of the notes or
    preferred shares or of losing its ratings on the preferred
    shares or notes or, in an extreme case, the Fund&#146;s current
    investment income might not be sufficient to meet the
    distribution requirements on the preferred shares or notes. In
    order to counteract such an event, the Fund might need to
    liquidate investments in order to fund redemption of some or all
    of the preferred shares or notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition, the Fund would pay (and the holders of common
    shares will bear) all costs and expenses relating to the
    issuance and ongoing maintenance of the preferred shares,
    including any additional advisory fees on the incremental assets
    attributable to such preferred shares. Holders of preferred
    shares may have different interests than holders of common
    shares and at times may have disproportionate influence over the
    Fund&#146;s affairs. In the event the Fund fails to maintain the
    specified level of asset coverage of any notes outstanding, the
    holders of the preferred shares will have the right to elect a
    majority of the Fund&#146;s Directors. In addition, holders of
    preferred shares, voting separately as a single class, have the
    right to elect two members of the Board at all times and in the
    event dividends become in arrears for two full years would have
    the right (subject to the rights of noteholders) to elect a
    majority of the Directors until the arrearage is completely
    eliminated. In addition, preferred shareholders have class
    voting rights on certain matters, including changes in
    fundamental investment restrictions and conversion of the Fund
    to open-end status, and accordingly can veto any such changes.
    See &#147;Risk Factors and Special Considerations&#151;Special
    Risks to Holders of Common Shares&#151;Leverage Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Market Discount Risk.</I>&#160;&#160;Whether investors will
    realize gains or losses upon the sale of common shares of the
    Fund will depend upon the market price of the shares at the time
    of sale, which may be less or more than the Fund&#146;s net
    asset value per share. Since the market price of the common
    shares will be affected by such factors as the Fund&#146;s
    dividend and distribution levels (which are in turn affected by
    expenses), dividend and distribution stability, net asset value,
    market liquidity, the relative demand for and supply of the
    shares in the market, general market and economic conditions and
    other factors beyond the control of the Fund, we cannot predict
    whether the common shares will trade at, below or above net
    asset value or at, below or above the public offering price.
    Common shares of closed-end funds often trade at a discount to
    their net asset values and the Fund&#146;s common shares may
    trade at such a discount. This risk may be greater for investors
    expecting to sell their common shares of the Fund soon after
    completion of the public offering. The common shares of the Fund
    are designed primarily for long-term investors, and investors in
    the shares should not view the Fund as a vehicle for trading
    purposes. See &#147;Risk Factors and Special
    Considerations&#151;Special Risks to Holders of Common
    Shares&#151;Market Discount Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Inflation Risk.</I>&#160;&#160;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 Fund&#146;s
</DIV>
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    <BR>
    6
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    shares and distributions thereon can decline. In addition,
    during any periods of rising inflation, dividend rates of any
    variable rate preferred stock or debt securities issued by the
    Fund would likely increase, which would tend to further reduce
    returns to common shareholders. See &#147;Risk Factors and
    Special Considerations&#151;Special Risks to Holders of Common
    Shares&#151;Inflation Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Special Risks Related to Convertible Securities and Fixed
    Income Securities.</I>&#160;&#160;The Fund invests a significant
    portion of its assets in convertible securities. Many
    convertible securities are not investment grade, that is, not
    rated within the four highest categories by Moody&#146;s
    Investors Services, Inc. (&#147;Moody&#146;s&#148;) and
    Standard&#160;&#038; Poor&#146;s (&#147;S&#038;P&#148;) ratings
    agencies. To the extent that the convertible securities and any
    other fixed income securities owned by the Fund are rated lower
    than investment grade, or are not rated, there would be a
    greater risk as to the timely repayment of the principal of, and
    timely payment of interest or dividends on, those securities.
    Convertible debt securities (which generally are rated lower
    than investment grade) and fixed income securities that are
    rated lower than investment grade, or not rated but of similar
    quality, are commonly described as &#147;junk bonds.&#148; See
    &#147;Risk Factors and Special Considerations&#151;Risks of
    Investing in the Fund&#151;Credit Risk for Convertible
    Securities and Fixed Income Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Interest Rate Risk for Fixed Income
    Securities.</I>&#160;&#160;The primary risk associated with
    fixed income securities is interest rate risk. A decrease in
    interest rates will generally result in an increase in the value
    of a fixed income security, while increases in interest rates
    will generally result in a decline in its value. This effect is
    generally more pronounced for fixed rate securities than for
    securities whose income rate is periodically reset. Market
    interest rates recently have declined significantly below
    historical average rates, which may increase the risk that these
    rates will rise in the future. See &#147;Risk Factors and
    Special Considerations&#151;Risks of Investing in the
    Fund&#151;Interest Rate Risk for Fixed Income Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Distribution Risk for Equity Income
    Securities.</I>&#160;&#160;In selecting equity income securities
    in which the Fund will invest, the Investment Adviser will
    consider the issuer&#146;s history of making regular periodic
    distributions (i.e., dividends) to its equity holders. An
    issuer&#146;s history of paying dividends, however, does not
    guarantee that the issuer will continue to pay dividends in the
    future. See &#147;Risk Factors and Special
    Considerations&#151;Risks of Investing in the
    Fund&#151;Distribution Risk for Equity Income Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Equity Risk.</I>&#160;&#160;The principal risk of investing
    in equity securities is equity risk. Equity risk is the risk
    that the price of an equity security will fall due to general
    market and economic conditions, perceptions regarding the
    industry in which the issuer participates or the issuing
    company&#146;s particular circumstances. Common stock in which
    the Fund will invest or receive upon conversion of convertible
    securities is subject to such equity risk. In the case of
    convertible securities, it is the conversion value of a
    convertible security that is subject to the equity risk; that
    is, if the appreciation potential of a convertible security is
    not realized, the premium paid for its conversion value may not
    be recovered. See &#147;Investment Objective and
    Policies&#151;Investment Practices&#151;Convertible
    Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Prepayment Risks on Government Sponsored Mortgage-Backed
    Securities.</I>&#160;&#160;The yield and maturity
    characteristics of government sponsored mortgage-backed
    securities differ from traditional debt securities. A major
    difference is that the principal amount of the obligations may
    generally be prepaid at any time because the underlying assets
    (i.e., loans) generally may be prepaid at any time. See
    &#147;Investment Objective and Policies&#151;Investment
    Practices&#151;Prepayment Risks on Government Sponsored
    Mortgage-Backed Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Illiquid Investments.</I>&#160;&#160;The Fund has no limit on
    the amount of its net assets it may invest in unregistered and
    otherwise illiquid investments. The Fund currently does not
    intend to invest more than 15% of its total net assets in
    illiquid convertible securities or income securities.
    Unregistered securities are securities that cannot be sold
    publicly in the United States without registration under the
    Securities Act of 1933, as amended (the
    &#147;1933&#160;Act&#148;). Unregistered securities generally
    can be resold only in privately negotiated transactions with a
    limited number of purchasers or in a public offering registered
    under the 1933&#160;Act. Considerable delay could be encountered
    in either event and, unless otherwise contractually provided
    for, the Fund&#146;s proceeds upon sale may be reduced by the
    costs of registration or underwriting discounts. The
    difficulties and delays associated with such transactions could
    result in the Fund&#146;s inability to realize a favorable price
    upon disposition of
</DIV>
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    <BR>
    7
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    unregistered securities, and at times might make disposition of
    such securities impossible. See &#147;Risk Factors and Special
    Considerations&#151;Risks of Investing in the Fund&#151;Illiquid
    Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Industry Concentration Risk.</I>&#160;&#160;The Fund may
    invest up to 25% of its assets in the securities of companies
    principally engaged in a single industry. In the event the Fund
    makes substantial investments in a single industry, the Fund
    would become more susceptible to adverse economic or regulatory
    occurrences affecting that industry. See &#147;Risk Factors and
    Special Considerations&#151;Risks of Investing in the
    Fund&#151;Industry Concentration Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Foreign Securities Risk.</I>&#160;&#160;The Fund may invest
    up to 25% of its total assets in foreign securities. The Fund
    may also purchase sponsored American Depository Receipts
    (&#147;ADRs&#148;) or U.S.&#160;denominated securities of
    foreign issuers, which will not be included in the Fund&#146;s
    25% foreign securities limitation. Investing in securities of
    foreign companies (or foreign governments), which are generally
    denominated in foreign currencies, may involve certain risks and
    opportunities not typically associated with investing in
    domestic companies and could cause the Fund to be affected
    favorably or unfavorably by changes in currency exchange rates
    and revaluation of currencies. See &#147;Risk Factors and
    Special Considerations&#151;Risks of Investing in the
    Fund&#151;Foreign Securities Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Smaller Companies.</I>&#160;&#160;While the Fund intends to
    focus on the securities of established suppliers of accepted
    products and services, the Fund may also invest in smaller
    companies which may benefit from the development of new products
    and services. These smaller companies may present greater
    opportunities for capital appreciation, and may also involve
    greater investment risk than larger, more established companies.
    For example, smaller companies may have more limited product
    lines, market or financial resources, and their securities may
    trade less frequently and in lower volume than the securities of
    larger, more established companies. As a result, the prices of
    the securities of such smaller companies may fluctuate to a
    greater degree than the prices of securities of other issuers.
    See &#147;Risk Factors and Special Considerations&#151;Risks of
    Investing in the Fund&#151;Smaller Companies.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Investment Companies.</I>&#160;&#160;The Fund may invest in
    the securities of other investment companies to the extent
    permitted by law. To the extent the Fund invests in the common
    equity of investment companies, the Fund will bear its ratable
    share of any such investment company&#146;s expenses, including
    management fees. The Fund will also remain obligated to pay
    management fees to the Investment Adviser with respect to the
    assets invested in the securities of other investment companies.
    In these circumstances, holders of the Fund&#146;s common shares
    will be subject to duplicative investment expenses. See
    &#147;Risk Factors and Special Considerations&#151;Risks of
    Investing in the Fund&#151;Investment Companies.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Interest Rate Transactions.</I>&#160;&#160;The Fund may enter
    into an interest rate swap or cap transaction with respect to
    any future series of variable rate preferred shares. The use of
    interest rate swaps and caps is a highly specialized activity
    that involves certain risks to the Fund including, among others,
    counterparty risk and early termination risk. The Fund will
    enter into an interest rate swap or cap transaction only with
    counterparties that the Investment Adviser believes are
    creditworthy. Further, the Investment Adviser monitors the
    creditworthiness of a counterparty in an interest rate swap or
    cap transaction on an ongoing basis. See &#147;Risk Factors and
    Special Considerations&#151;Risks of Investing in the
    Fund&#151;Interest Rate Transactions.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Loans of Portfolio Securities.</I>&#160;&#160;The Fund may
    seek to earn income by lending portfolio securities to
    broker-dealers or other institutional borrowers. As with other
    extensions of credit, there are risks of delay in recovery or
    even loss of rights in the securities loaned if the borrower of
    the securities violates the terms of the loan or fails
    financially. The Fund currently does not intend to lend
    securities representing more than 33% of its total net assets.
    See &#147;Risk Factors and Special Considerations&#151;Risks of
    Investing in the Fund&#151;Loans of Portfolio Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Management Risk.</I>&#160;&#160;The Fund is subject to
    management risk because it is an actively managed portfolio. The
    Investment Adviser will apply investment techniques and risk
    analyses in making investment decisions for the Fund, but there
    can be no guarantee that these will produce the desired results.
    See &#147;Risk Factors and Special Considerations&#151;Risks of
    Investing in the Fund&#151;Management Risk.&#148;
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    <BR>
    8
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Dependence on Key Personnel.</I>&#160;&#160;The Investment
    Adviser is dependent upon the expertise of Mr.&#160;Mario J.
    Gabelli in providing advisory services with respect to the
    Fund&#146;s investments. If the Investment Adviser were to lose
    the services of Mr.&#160;Gabelli, its ability to service the
    Fund could be adversely affected. There can be no assurance that
    a suitable replacement could be found for Mr.&#160;Gabelli in
    the event of his death, resignation, retirement, or inability to
    act on behalf of the Investment Adviser. See &#147;Risk Factors
    and Special Considerations&#151;Risks of Investing in the Fund
    &#151;Dependence on Key Personnel.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Market Disruption and Geopolitical Risk.</I>&#160;&#160;The
    terrorist attacks on domestic U.S.&#160;targets on
    September&#160;11, 2001, the wars in Iraq and Afghanistan and
    other geopolitical events have led to, and may in the future
    lead to, increased short-term market volatility and may have
    long-term effects on U.S.&#160;and world economies and markets.
    The nature, scope and duration of the war and occupation cannot
    be predicted with any certainty. Similar events in the future or
    other disruptions of financial markets could affect interest
    rates, securities exchanges, auctions, secondary trading,
    ratings, credit risk, inflation, energy prices and other factors
    relating to the common shares. See &#147;Risk Factors and
    Special Considerations&#151;Risks of Investing in the
    Fund&#151;Market Disruption and Geopolitical Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Recent Economic Events.</I>&#160;&#160;While the
    U.S.&#160;and global markets had experienced extreme volatility
    and disruption for an extended period of time, fiscal year 2010
    witnessed more stabilized economic activity as expectations for
    an economic recovery increased. However, risks to a robust
    resumption of growth persist: a weak consumer weighed down by
    too much debt and increasing joblessness, the growing size of
    the federal budget deficit and national debt, and the threat of
    inflation. A return to unfavorable economic conditions could
    impair the Fund&#146;s ability to execute its investment
    strategies. See &#147;Risk Factors and Special
    Considerations&#151;Risks of Investing in the Fund&#151;Recent
    Economic Developments.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Government Intervention in Financial Markets
    Risk.</I>&#160;&#160;The recent instability in the financial
    markets has led the U.S.&#160;government and foreign governments
    to take a number of unprecedented actions designed to support
    certain financial institutions and segments of the financial
    markets that have experienced extreme volatility, and in some
    cases a lack of liquidity. U.S.&#160;federal and state
    governments and foreign governments, their regulatory agencies
    or self regulatory organizations may take additional actions
    that affect the regulation of the securities in which the Fund
    invests, or the issuers of such securities, in ways that are
    unforeseeable. Issuers of corporate securities might seek
    protection under the bankruptcy laws. Legislation or regulation
    may also change the way in which the Fund itself is regulated.
    Such legislation or regulation could limit or preclude the
    Fund&#146;s ability to achieve its investment objectives. See
    &#147;Risk Factors and Special Considerations &#151;Risks of
    Investing in the Fund&#151;Government Intervention in Financial
    Markets Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Long-term Objective.</I>&#160;&#160;The Fund is intended for
    investors seeking a high level of total return over the
    long-term. The Fund is not meant to provide a vehicle for those
    who wish to play short-term swings in the stock market. An
    investment in shares of the Fund should not be considered a
    complete investment program. Each shareholder should take into
    account the Fund&#146;s investment objective as well as the
    shareholder&#146;s other investments when considering an
    investment in the Fund. See &#147;Risk Factors and Special
    Considerations&#151;Risks of Investing in the
    Fund&#151;Long-term Objective.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Anti-Takeover Provisions.</I>&#160;&#160;The Fund&#146;s
    Governing Documents (as defined herein) 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. See
    &#147;Risk Factors and Special Considerations&#151;Risks of
    Investing in the Fund&#151;Anti-Takeover Provisions of the
    Fund&#146;s Governing Documents.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Status as a Regulated Investment Company.</I>&#160;&#160;The
    Fund has elected and has qualified for, and intends to remain
    qualified for, federal income tax purposes as a regulated
    investment company. Qualification requires, among other things,
    compliance by the Fund with certain distribution requirements.
    Statutory limitations on distributions on the common shares if
    the Fund fails to satisfy the 1940 Act&#146;s asset coverage
    requirements could jeopardize the Fund&#146;s ability to meet
    such distribution requirements. The Fund presently intends,
    however, to purchase or redeem preferred shares to the extent
    necessary in order to maintain compliance with such asset
    coverage requirements. See &#147;Taxation&#148; for a more
    complete discussion of these and other federal income tax
    considerations.
</DIV>
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    <BR>
    9
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Derivative Transactions.</I>&#160;&#160;The Fund may
    participate in certain derivative transactions. Such
    transactions entail certain execution, market, liquidity,
    hedging and tax risks. Participation in the options or futures
    markets and in currency exchange transactions involves
    investment risks and transaction costs to which the Fund would
    not be subject absent the use of these strategies. If the
    Investment Adviser&#146;s prediction of movements in the
    direction of the securities, foreign currency or interest rate
    markets is inaccurate, the consequences to the Fund may leave
    the Fund in a worse position than if it had not used such
    strategies. See &#147;Risk Factors and Special
    Considerations&#151;Risks of Investing in the Fund&#151;Special
    Risks of Derivative Transactions.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Special Risks Related to Preferred
    Securities.</I>&#160;&#160;Special risks associated with the
    Fund investing in preferred securities include deferral of
    distributions or dividend payments, in some cases the right of
    an issuer never to pay missed dividends, subordination to debt
    and other liabilities, illiquidity, limited voting rights and
    redemption by the issuer. Because the Fund has no limit on its
    investment in non-cumulative preferred securities, the amount of
    dividends the Fund pays may be adversely affected if an issuer
    of a non-cumulative preferred stock held by the Fund determines
    not to pay dividends on such stock. There is no assurance that
    dividends or distributions on preferred stock in which the Fund
    invests will be declared or otherwise made payable. See
    &#147;Risk Factors and Special Considerations&#151;Risks of
    Investing in the Fund&#151;Special Risks Related to Preferred
    Securities.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Management
    and Fees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Gabelli Funds, LLC serves as the Fund&#146;s investment adviser
    and is compensated for its services and its related expenses at
    an annual rate of 1.00% of the Fund&#146;s average daily net
    assets. The Investment Adviser is responsible for administration
    of the Fund and currently utilizes and pays the fees of a third
    party administrator. The fee paid by the Fund may be higher when
    leverage in the form of preferred shares is utilized, giving the
    Investment Adviser an incentive to utilize such leverage.
    However, the Investment Adviser has agreed to reduce the
    management fee on the incremental assets attributable to the
    currently outstanding preferred shares during the fiscal year if
    the total return of the net asset value of the common shares of
    the Fund, including distributions and advisory fees subject to
    reduction for that year, does not exceed the stated dividend
    rate or corresponding swap rate of each particular series of
    currently outstanding preferred shares for the period. In other
    words, if the effective cost of the leverage for any series of
    currently outstanding preferred shares exceeds the total return
    (based on net asset value) on the Fund&#146;s common shares, the
    Investment Adviser will waive that portion of its management fee
    on the incremental assets attributable to the leverage for that
    series of currently outstanding preferred shares to mitigate the
    negative impact of the leverage on the common shareholder&#146;s
    total return. This fee waiver is voluntary and may be
    discontinued at any time. The Fund&#146;s total return on the
    net asset value of the common shares is monitored on a monthly
    basis to assess whether the total return on the net asset value
    of the common shares exceeds the stated dividend rate or
    corresponding swap rate of each particular series of currently
    outstanding preferred shares for the period. The test to confirm
    the accrual of the management fee on the assets attributable to
    each particular series of currently outstanding preferred shares
    is annual. The Fund will accrue for the management fee on these
    assets during the fiscal year if it appears probable that the
    Fund will incur the management fee on those additional assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    For the year ended December&#160;31, 2010, the Fund&#146;s total
    return on the net asset value of the common shares exceeded the
    stated dividend rate or net swap expense of all currently
    outstanding preferred shares. Thus, management fees were accrued
    on these assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A discussion regarding the basis for the Board&#146;s approval
    of the continuation of the investment advisory contract of the
    Fund is available in the Fund&#146;s semi-annual report to
    shareholders dated June&#160;30, 2010.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Repurchase
    of Common Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund is authorized to repurchase up to 500,000 of its common
    shares in the open market when the common shares are trading at
    a discount of 10% or more (or such other percentage as the
    Fund&#146;s Board may determine from time to time) from the net
    asset value of the shares. Although the Board has authorized
    such
</DIV>
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</DIV><!-- End box 1 -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    10
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    repurchases, the Fund is not required to repurchase its common
    shares. Such repurchases are subject to certain notice and other
    requirements under the 1940 Act. See &#147;Repurchase of
    Shares.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Anti-takeover
    Provisions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Certain provisions of the Fund&#146;s charter (the
    &#147;Charter&#148;) and by-laws (the &#147;By-Laws&#148;)
    (collectively, the &#147;Governing Documents&#148;), may be
    regarded as &#147;anti-takeover&#148; provisions. Pursuant to
    these provisions, only one of three classes of directors is
    elected each year, and the affirmative vote of the holders of
    75% of the outstanding shares of the Fund and the vote of a
    majority (as defined in the 1940 Act) of the holders of
    preferred shares voting as a single class, are necessary to
    authorize the conversion of the Fund from a closed-end to an
    open-end investment company. The overall effect of these
    provisions is to render more difficult the accomplishment of a
    merger with, or the assumption of control by, a principal
    shareholder. These provisions may have the effect of depriving
    Fund common shareholders of an opportunity to sell their shares
    at a premium to the prevailing market price. See
    &#147;Anti-Takeover Provisions of the Fund&#146;s Governing
    Documents.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Custodian,
    Transfer Agent, Auction Agent and Dividend Disbursing
    Agent</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    State Street Bank and Trust&#160;Company (&#147;State
    Street&#148; or the &#147;Custodian&#148;), located at 1776
    Heritage Drive, North Quincy, Massachusetts 02171, serves as the
    custodian of the Fund&#146;s assets pursuant to a custody
    agreement. Under the custody agreement, the Custodian holds the
    Fund&#146;s assets in compliance with the 1940&#160;Act. For its
    services, the Custodian receives a monthly fee based upon, among
    other things, the average value of the total assets of the Fund,
    plus certain charges for securities transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Computershare Trust&#160;Company, N.A.
    (&#147;Computershare&#148;), located at 250 Royall Street,
    Canton, Massachusetts 02021, serves as the Fund&#146;s dividend
    disbursing agent, as agent under the Fund&#146;s automatic
    dividend reinvestment and voluntary cash purchase plan, and as
    transfer agent and registrar with respect to the common shares
    of the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Computershare also serves as the Fund&#146;s transfer agent,
    registrar, dividend paying agent and redemption agent with
    respect to the Series&#160;B Preferred.
</DIV>
</DIV><!-- End box 1 -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    11
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">SUMMARY
    OF FUND&#160;EXPENSES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following table shows the Fund&#146;s expenses as a
    percentage of net assets attributable to common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="94%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang2 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Shareholder Transaction Expenses</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Sales Load (as a percentage of offering price)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.54
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD nowrap align="left" valign="bottom">
    (1)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Offering Expenses Borne by the Fund (as a percentage of offering
    price)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.13
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD nowrap align="left" valign="bottom">
    (1)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dividend Reinvestment Plan Fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    (2)
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Preferred Stock Offering Expenses Borne by the Fund (as a
    percentage of net assets attributable to common shares)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.11
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD nowrap align="left" valign="bottom">
    (3)
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="84%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="6%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang2 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="4" nowrap align="center" valign="bottom">
    <B>Percentage of Net<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="4" nowrap align="center" valign="bottom">
    <B>Assets Attributable<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="4" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>to Common Shares</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Annual Expenses</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management Fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.31
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD nowrap align="left" valign="bottom">
    (4)
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest on Borrowed Funds
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    None
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.47
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD nowrap align="left" valign="bottom">
    (4)
</TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dividends on Preferred Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.86
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD nowrap align="left" valign="bottom">
    (5)
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD></TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total annual fund operating expenses and dividends on preferred
    stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.33
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD nowrap align="left" valign="bottom">
    (4)
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD></TD>
</TR>
<TR valign="bottom" style="color: #000000; background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Annual Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.64
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD></TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Estimated maximum amount based on offering of $75&#160;million
    in common shares and $25&#160;million in preferred shares. The
    actual amounts in connection with any offering will be set forth
    in the Prospectus Supplement if applicable</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Shareholders participating in the Fund&#146;s Automatic Dividend
    Reinvestment and Voluntary Cash Purchase Plans would pay $0.75
    plus their pro rata share of brokerage commissions per
    transactions to purchase shares and $2.50 plus their pro rata
    share of brokerage commissions per transaction to sell shares.
    See &#147;Automatic Dividend Reinvestment and Voluntary Cash
    Purchase Plans.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Assumes issuance of $25&#160;million in liquidation preference
    of fixed rate preferred shares and net assets attributable to
    common shares of $157.7&#160;million (which includes issuance of
    $75&#160;million in common shares). The actual amounts in
    connection with any offering will be set forth in the Prospectus
    Supplement if applicable.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Investment Adviser&#146;s fee is 1.00% annually of the
    Fund&#146;s average weekly net assets, plus assets attributable
    to any outstanding senior securities, with no deduction for the
    liquidation preference of any outstanding preferred stock.
    Consequently, if the Fund has preferred stock outstanding, the
    investment management fees and other expenses as a percentage of
    net assets attributable to common stock will be higher than if
    the Fund does not utilize a leveraged capital structure.
    &#147;Other Expenses&#148; are based on estimated amounts for
    the current year assuming completion of the proposed issuances.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Dividends on Preferred Stock represent distributions on the
    existing preferred stock outstanding and the proposed
    $25&#160;million of preferred stock at 6.00%.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The purpose of the table above and the example below is to help
    you understand all fees and expenses that you, as a holder of
    common stock, would bear directly or indirectly.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    12
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following example illustrates the expenses (including the
    maximum estimated sales load of $10 and estimated offering
    expenses of $8.10 from the issuance of $75&#160;million in
    common stock) you would pay on a $1,000 investment in common
    stock, assuming a 5% annual portfolio total
    return.<SUP style="font-size: 85%; vertical-align: top">1</SUP>

    The actual amounts in connection with any offering will be set
    forth in the Prospectus Supplement if applicable.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="67%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>1&#160;Year</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>3&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>5&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>10&#160;Years</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Expenses Incurred
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    39
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    153
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    311
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    1&#160;<B>The example should not be considered a representation
    of future expenses. </B>The example assumes that the amounts set
    forth in the Annual Expenses table are accurate and that all
    distributions are reinvested at net asset value. Actual expenses
    may ne greater or less than those assumed. Moreover, the
    Fund&#146;s actual rat of return may be greater or less than the
    hypothetical 5% return shown in the example.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    13
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316103'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">FINANCIAL
    HIGHLIGHTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The selected data below sets forth the per share operating
    performance and ratios for the periods presented. The financial
    information was derived from and should be read in conjunction
    with the Financial Statements of the Fund and Notes thereto,
    which are incorporated by reference into this prospectus and the
    SAI. The financial information for the year ended
    December&#160;31, 2010, and for each of the preceding five
    fiscal periods, has been audited by
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;],
    the Fund&#146;s independent registered public accounting firm,
    whose unqualified report on such Financial Statements is
    incorporated by reference into the SAI.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Selected data for a share outstanding throughout each period:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="43%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2010</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Operating Performance:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net asset value, beginning of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.19
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.90
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.45
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net realized and unrealized gain/(loss) on investments, swap
    contracts, securities sold short, and foreign currency
    transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2.01
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.20
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.92
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total from investment operations
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.65
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.77
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.62
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.37
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Distributions to Preferred Shareholders:&#160;(a)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.11
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.11
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.14
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.11
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.09
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net realized gain
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.01
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.12
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.13
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total distributions to preferred shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.11
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.11
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.15
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.23
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.22
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <B>Net Increase/(Decrease) in Net Assets Attributable to Common
    Shareholders Resulting from Operations</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (1.92
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.39
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Distributions to Common Shareholders:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net investment income
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.06
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.09
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.09
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.34
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net realized gain
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.01
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.32
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.46
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Paid-in capital
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.41
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.33
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.70
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.17
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total distributions to common shareholders
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.47
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.42
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.80
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.80
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.80
</TD>
<TD nowrap align="left" valign="bottom">
    )
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Fund&#160;Share Transactions:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Increase in net asset value from common share transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.00
</TD>
<TD nowrap align="left" valign="bottom">
    )(f)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    (f)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    (f)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Increase in net asset value from repurchase of preferred shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    (f)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total fund share transactions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (0.00
</TD>
<TD nowrap align="left" valign="bottom">
    )(f)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    (f)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
    (f)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <B>Net Asset Value Attributable to Common Shareholders, End of
    Period</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.01
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.19
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.90
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    NAV total return&#134;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.46
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    23.72
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (25.57
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.44
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.80
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Market value, end of period
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.12
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.81
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.55
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Investment total return&#134;&#134;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13.96
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13.16
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (18.02
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5.85
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.32
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    14
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
<!-- XBRL Table Pagebreak -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="43%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="18" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year Ended December&#160;31,</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2010</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2009</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2008</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2007</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>2006</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Ratios to Average Net Assets and <BR>
    Supplemental Data:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net assets including liquidation value of preferred shares, end
    of period (in&#160;000&#146;s)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    104,547
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    102,173
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    91,782
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    149,360
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    152,158
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Net assets attributable to common shares, end of period (in
    000&#146;s)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    80,408
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    78,034
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    67,349
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    99,590
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    102,388
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Ratio of net investment income to average net assets
    attributable to common shares before preferred share
    distributions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.43
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.28
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.65
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.90
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.51
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Ratio of operating expenses to average net assets attributable
    to common shares before fees waived
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.05
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.01
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.06
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.23
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Ratio of operating expenses to average net assets attributable
    to common shares net of advisory fee reduction, if
    any&#160;(b)(c)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.05
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.01
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.64
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.75
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.07
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Ratio of operating expenses to average net assets including
    liquidation value of preferred shares before fees waived
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.57
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.50
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.45
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.51
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Ratio of operating expenses to average net assets including
    liquidation value of preferred shares net of advisory fee
    reduction, if any&#160;(b)(c)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.57
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.50
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.15
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.18
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.37
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Portfolio turnover rate&#134;&#134;&#134;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    44
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    71
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    76
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    61
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    51
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Preferred Stock:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <B>6.000% Series&#160;B Cumulative Preferred Stock</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Liquidation value, end of period (in&#160;000&#146;s)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,139
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,139
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,433
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,770
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24,770
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total shares outstanding (in 000&#146;s)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    966
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    966
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    977
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    991
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    991
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Liquidation preference per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Average market value&#160;(d)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25.20
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    23.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    22.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24.07
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    24.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Asset coverage per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    108.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    105.82
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    93.91
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    75.02
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    76.43
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <B>Series&#160;C Auction Rate Cumulative Preferred Stock</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Liquidation value, end of period (in&#160;000&#146;s)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total shares outstanding (in 000&#146;s)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Liquidation preference per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Average market value&#160;(d)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    25,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Asset coverage per share
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    75,025
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    76,431
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    <B>Asset Coverage&#160;(e)</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    433
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    423
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    376
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    300
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    306
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    &#134; </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on net asset value per share, adjusted for reinvestment of
    distributions at prices determined under the Fund&#146;s
    dividend reinvestment plan.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    &#134;&#134; </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on market value per share, adjusted for reinvestment of
    distributions at prices determined under the Fund&#146;s
    dividend reinvestment plan.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    &#134;&#134;&#134; </TD>
    <TD></TD>
    <TD valign="bottom">
    Effective in 2008, a change in accounting policy was adopted
    with regard to the calculation of the portfolio turnover rate to
    include cash proceeds due to mergers. Had this policy been
    adopted </TD>
</TR>
<!-- XBRL Paragraph Pagebreak -->

</TABLE>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    15
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    retroactively, the portfolio turnover rate for the years ended
    December&#160;31, 2007 and 2006, would have been 98% and 65%,
    respectively.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (a) </TD>
    <TD></TD>
    <TD valign="bottom">
    Calculated based upon average common shares outstanding on the
    record dates throughout the periods.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (b) </TD>
    <TD></TD>
    <TD valign="bottom">
    The ratios do not include a reduction of expenses for custodian
    fee credits on cash balances maintained with the custodian
    (&#147;Custodian Fee Credits&#148;). Including such Custodian
    Fee Credits, for the years ended December&#160;31, 2007 and
    2006, the ratios of operating expenses to average net assets
    attributable to common shares net of advisory fee reduction
    would have been 1.74% and 2.05%, respectively, and the ratios of
    operating expenses to average net assets including liquidation
    value of preferred shares would have been 1.17% and 1.37%,
    respectively. For the years ended December&#160;31, 2010, 2009,
    and 2008, the effect of Custodian Fee Credits was minimal.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (c) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund incurred dividend expense on securities sold short for
    the years ended December&#160;31, 2006 and 2007. If 2006
    dividend expense had not been incurred, the ratio of operating
    expenses to average net assets attributable to common shares
    would have been 2.06% and the ratio of operating expenses to
    average net assets including liquidation value of preferred
    shares would have been 1.37%.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (d) </TD>
    <TD></TD>
    <TD valign="bottom">
    Based on weekly prices.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (e) </TD>
    <TD></TD>
    <TD valign="bottom">
    Asset coverage is calculated by combining all series of
    preferred stock.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (f) </TD>
    <TD></TD>
    <TD valign="bottom">
    Amount represents less than $0.005 per share.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    16
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser expects that it will initially invest the
    proceeds of the offering in high quality short-term income
    securities and instruments. The Investment Adviser anticipates
    that the investment of the proceeds will be made in accordance
    with the Fund&#146;s investment objective and policies as
    appropriate investment opportunities are identified, which is
    expected to substantially be completed within three months;
    however, changes in market conditions could result in the
    Fund&#146;s anticipated investment period extending to as long
    as six months. The Fund may also use net proceeds to redeem its
    Series&#160;B Preferred.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    17
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund was incorporated in Maryland on December&#160;19, 1988
    as an open-end, diversified, management investment company, and
    converted to closed-end status after receiving shareholder
    approval of its Charter on February&#160;21, 1995 and filing its
    Charter in Maryland on March&#160;31, 1995. The Fund&#146;s
    principal office is located at One Corporate Center, Rye, New
    York
    <FONT style="white-space: nowrap">10580-1422.</FONT>
</DIV>

<A name='Y91316106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">INVESTMENT
    OBJECTIVE AND POLICIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Objective</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The investment objective of the Fund is to seek a high level of
    total return on its assets. The Fund seeks to achieve its
    investment objective through a combination of current income and
    capital appreciation. There is no assurance that this objective
    will be achieved. It is, however, a fundamental policy of the
    Fund and cannot be changed without stockholder approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Under normal circumstances the Fund will invest at least 80% of
    the value of its total assets (taken at current value) in
    &#147;convertible securities,&#148; i.e., securities (bonds,
    debentures, notes, stocks and other similar securities) that are
    convertible into common stock or other equity securities, and
    &#147;income securities,&#148; i.e., nonconvertible debt or
    equity securities having a history of regular payments or
    accrual of income to holders. Securities received upon
    conversion of a convertible security will not be included in the
    calculation of the percentage of Fund assets invested in
    convertible securities but may be retained in the Fund&#146;s
    portfolio to permit orderly disposition or to establish
    long-term holding periods for federal income tax purposes. The
    Fund expects to continue its practice of focusing on convertible
    securities to the extent attractive opportunities are available.
    We cannot assure you that the Fund will achieve its investment
    objective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may invest up to 20% of its total assets (taken at
    current value and subject to any restrictions appearing
    elsewhere in this Registration Statement) in any combination and
    quantity of securities that do not generate any income, such as
    common stocks that do not pay dividends. In selecting any of the
    foregoing securities for investment, the factors that will be
    considered by the Investment Adviser include the Investment
    Adviser&#146;s evaluation of the underlying value of the assets
    and business of the issuers of the securities, the potential for
    capital appreciation, the price of the securities, the
    issuer&#146;s balance sheet characteristics and the perceived
    skills and integrity of the issuer&#146;s management.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    During periods when it is deemed necessary for temporary
    defensive purposes, the Fund may invest without limit in high
    quality money market instruments, including commercial paper of
    domestic and foreign corporations, certificates of deposit,
    bankers&#146; acceptances and other obligations of domestic and
    foreign banks and obligations issued or guaranteed by the United
    States government, its instrumentalities or agencies and,
    subject to statutory limitations, unaffiliated money market
    mutual funds, unless an exemptive order permits the Fund to
    invest in affiliated money market funds. The yield on these
    securities will, as a general matter, tend to be lower than the
    yield on other securities to be purchased by the Fund. See
    &#147;&#151;Investment Practices&#151;Temporary Defensive
    Investments.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Methodology of the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In selecting securities for the Fund, the Investment Adviser
    normally will consider the following factors, among others:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Investment Adviser&#146;s own evaluations of the private
    market value (as defined below), cash flow, earnings per share
    and other fundamental aspects of the underlying assets and
    business of the company;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interest or dividend income generated by the securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the potential for capital appreciation of the securities and any
    underlying common stocks;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the prices of the securities relative to other comparable
    securities;
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    18
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the prices of the securities relative to any underlying common
    stock;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the securities are entitled to the benefits of sinking
    funds or other protective conditions or covenants;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the existence of any anti-dilution protections or guarantees of
    the security;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the diversification of the Fund&#146;s portfolio as to issuers.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser&#146;s investment philosophy with respect
    to equity and debt securities is to identify assets that are
    selling in the public market at a discount to their private
    market value. The Investment Adviser defines private market
    value as the value informed purchasers are willing to pay to
    acquire assets with similar characteristics. The Investment
    Adviser also normally evaluates an issuer&#146;s free cash flow
    and long-term earnings trends. Finally, the Investment Adviser
    looks for a catalyst, something indigenous to the company, its
    industry or country that will surface additional value.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Certain
    Investment Practices</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Convertible Securities.</I>&#160;&#160;A convertible security
    is a bond, debenture, note, stock or other similar security that
    may be converted into or exchanged for a prescribed amount of
    common stock or other equity security of the same or a different
    issuer within a particular period of time at a specified price
    or formula. Before conversion, convertible securities have
    characteristics similar to nonconvertible debt securities in
    that they ordinarily provide a stream of income with generally
    higher yields than those of common stock of the same or similar
    issuers. Convertible securities are senior in rank to common
    stock in a corporation&#146;s capital structure and, therefore,
    generally entail less risk than the corporation&#146;s common
    stock, although the extent to which such risk is reduced depends
    in large measure upon the degree to which the convertible
    security sells above its value as a fixed income security.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund believes that the characteristics of convertible
    securities make them appropriate investments for an investment
    company seeking a high level of total return on its assets.
    These characteristics include the potential for capital
    appreciation if the value of the underlying common stock
    increases, the relatively high yield received from dividend or
    interest payments as compared to common stock dividends and
    decreased risks of decline in value, relative to the underlying
    common stock due to their fixed income nature. As a result of
    the conversion feature, however, the interest rate or dividend
    preference on a convertible security is generally less than
    would be the case if the securities were not convertible. During
    periods of rising interest rates, it is possible that the
    potential for capital gain on a convertible security may be less
    than that of a common stock equivalent if the yield on the
    convertible security is at a level that causes it to sell at a
    discount.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Every convertible security may be valued, on a theoretical
    basis, as if it did not have a conversion privilege. This
    theoretical value is determined by the yield it provides in
    comparison with the yields of other securities of comparable
    character and quality that do not have a conversion privilege.
    This theoretical value, which may change with prevailing
    interest rates, the credit rating of the issuer and other
    pertinent factors, often referred to as the &#147;investment
    value,&#148; represents the security&#146;s theoretical price
    support level.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    &#147;Conversion value&#148; is the amount a convertible
    security would be worth in market value if it were to be
    exchanged for the underlying equity security pursuant to its
    conversion privilege. Conversion value fluctuates directly with
    the price of the underlying equity security, usually common
    stock. If, because of low prices for the common stock, the
    conversion value is substantially below the investment value,
    the price of the convertible security is governed principally by
    the factors described in the preceding paragraph. If the
    conversion value rises near or above its investment value, the
    price of the convertible security generally will rise above its
    investment value and, in addition, will sell at some premium
    over its conversion value. This premium represents the price
    investors are willing to pay for the privilege of purchasing a
    fixed-income security with a possibility of capital appreciation
    due to the conversion privilege. Accordingly, the conversion
    value of a convertible security is subject to equity risk, that
    is, the risk that the price of an equity security will fall due
    to general market and economic conditions, perceptions regarding
    the industry in which the issuer
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    participates or the issuing company&#146;s particular
    circumstances. If the appreciation potential of a convertible
    security is not realized, its conversion value premium may not
    be recovered.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In its selection of convertible securities for the Fund, the
    Investment Adviser will not emphasize either investment value or
    conversion value, but will consider both in light of the
    Fund&#146;s overall investment objective. See &#147;Convertible
    Securities&#148; in the Statement of Additional Information. The
    Fund may convert a convertible security that it holds:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    when necessary to permit orderly disposition of the investment
    when a convertible security approaches maturity or has been
    called for redemption;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to facilitate a sale of the position;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    if the dividend rate on the underlying common stock increases
    above the yield on the convertible security;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whenever the Investment Adviser believes it is otherwise in the
    best interests of the Fund.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Convertible securities are generally not investment grade, that
    is, not rated within the four highest categories by S&#038;P and
    Moody&#146;s. To the extent that such convertible securities and
    other nonconvertible debt securities, which are acquired by the
    Fund consistent with the factors considered by the Investment
    Adviser as described in this prospectus, are rated lower than
    investment grade or are not rated, there would be a greater risk
    as to the timely repayment of the principal of, and timely
    payment of interest or dividends on, those securities. It is
    expected that not more than 50% of the Fund&#146;s portfolio
    will consist of securities rated CCC or lower by S&#038;P or Caa
    or lower by Moody&#146;s or, if unrated, are of comparable
    quality as determined by the Investment Adviser. Those
    securities and securities rated BB or lower by S&#038;P or Ba or
    lower by Moody&#146;s are often referred to in the financial
    press as &#147;junk bonds&#148; and may include securities of
    issuers in default. &#147;Junk bonds&#148; are considered by the
    rating agencies to be predominantly speculative and may involve
    major risk exposure to adverse conditions. See &#147;Risk
    Factors and Special Considerations<B><I>-</I></B>Credit Risk for
    Convertible Securities and Fixed Income Securities.&#148;
    Securities rated BBB by S&#038;P or Baa by Moody&#146;s, in the
    opinion of the rating agencies, also have speculative
    characteristics. Securities need not meet a minimum rating
    standard in order to be acceptable for investment by the Fund.
    See Appendix&#160;A to this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s investments in securities of issuers in default
    will be limited to not more than 5% of the total assets of the
    Fund. Further, the Fund will invest in securities of issuers in
    default only when the Investment Adviser believes that such
    issuers will emerge from bankruptcy and the value of such
    securities will appreciate. By investing in securities of
    issuers in default the Fund bears the risk that such issuers
    will not emerge from bankruptcy or that the value of such
    securities will not appreciate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund has no independent limit on the amount of its net
    assets it may invest in unregistered and otherwise illiquid
    securities and other investments. The current intention of the
    Investment Adviser is not to invest in excess of 15% of the
    Fund&#146;s net assets in illiquid convertible securities or
    income securities. Common stockholders will be notified if the
    Investment Adviser changes its intention. Investments in
    unregistered or otherwise illiquid securities entail certain
    risks related to the fact that they cannot be sold publicly in
    the United States without registration under the Securities Act.
    See &#147;Risk Factors and Special Considerations&#151;Asset
    Class&#160;Risks.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Income Securities.</I>&#160;&#160;Although it is the
    Fund&#146;s policy to invest in convertible securities to the
    extent attractive opportunities are available, the Fund may also
    invest in income securities other than convertible securities
    that are expected to periodically accrue or generate income for
    their holders. Such income securities include (i)&#160;fixed
    income securities such as bonds, debentures, notes, stock,
    short-term discounted Treasury Bills or certain securities of
    the U.S.&#160;government sponsored instrumentalities, as well as
    money market mutual funds that invest in those securities,
    which, in the absence of an applicable exemptive order, will not
    be affiliated with the Investment Adviser, and (ii)&#160;common
    stocks of issuers that have historically paid periodic
    dividends. Fixed income securities obligate the issuer to pay to
    the holder of the security a specified return, which may be
    either fixed or reset periodically in accordance with the terms
    of the security. Fixed income
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    securities generally are senior to an issuer&#146;s common stock
    and their holders generally are entitled to receive amounts due
    before any distributions are made to common stockholders. Common
    stocks, on the other hand, generally do not obligate an issuer
    to make periodic distributions to holders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The market value of fixed income securities, especially those
    that provide a fixed rate of return, may be expected to rise and
    fall inversely with interest rates and in general is affected by
    the credit rating of the issuer, the issuer&#146;s performance
    and perceptions of the issuer in the market place. The market
    value of callable or redeemable fixed income securities may also
    be affected by the issuer&#146;s call and redemption rights. In
    addition, it is possible that the issuer of fixed income
    securities may not be able to meet its interest or principal
    obligations to holders. Further, holders of non-convertible
    fixed income securities do not participate in any capital
    appreciation of the issuer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may also invest in obligations of government sponsored
    instrumentalities. Unlike
    <FONT style="white-space: nowrap">non-U.S.&#160;government</FONT>
    securities, obligations of certain agencies and
    instrumentalities of the U.S.&#160;government, such as the
    Government National Mortgage Association, are supported by the
    &#147;full faith and credit&#148; of the U.S.&#160;government;
    others, such as those of the Export-Import Bank of the U.S., are
    supported by the right of the issuer to borrow from the
    U.S.&#160;Treasury; others, such as those of the Federal
    National Mortgage Association, are supported by the
    discretionary authority of the U.S.&#160;government to purchase
    the agency&#146;s obligations; and still others, such as those
    of the Student Loan Marketing Association, are supported only by
    the credit of the instrumentality. No assurance can be given
    that the U.S.&#160;government would provide financial support to
    U.S.&#160;government sponsored instrumentalities if it is not
    obligated to do so by law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund also may invest in common stock of issuers that have
    historically paid periodic dividends or otherwise made
    distributions to common stockholders. Unlike fixed income
    securities, dividend payments generally are not guaranteed and
    so may be discontinued by the issuer at its discretion or
    because of the issuer&#146;s inability to satisfy its
    liabilities. Further, an issuer&#146;s history of paying
    dividends does not guarantee that it will continue to pay
    dividends in the future. In addition to dividends, under certain
    circumstances the holders of common stock may benefit from the
    capital appreciation of the issuer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Common stocks represent the residual ownership interest in the
    issuer and holders of common stock are entitled to the income
    and increase in the value of the assets and business of the
    issuer after all of its debt obligations and obligations to
    preferred shareholders are satisfied. Common stocks generally
    have voting rights. Common stocks fluctuate in price in response
    to many factors including historical and prospective earnings of
    the issuer, the value of its assets, general economic
    conditions, interest rates, investor perceptions and market
    liquidity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Securities Subject to Reorganization.</I>&#160;&#160;Subject
    to the requirement of investing at least 80% of its assets in
    convertible or income securities, the Fund may invest without
    limit in securities of companies for which a tender or exchange
    offer has been made or announced and in securities of companies
    for which a merger, consolidation, liquidation or reorganization
    proposal has been announced if, in the judgment of the
    Investment Adviser, there is a reasonable prospect of high total
    return significantly greater than the brokerage and other
    transaction expenses involved.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In general, securities which are the subject of such an offer or
    proposal sell at a premium to their historic market price
    immediately prior to the announcement of the offer or may also
    discount what the stated or appraised value of the security
    would be if the contemplated transaction were approved or
    consummated. Such investments may be advantageous when the
    discount significantly overstates the risk of the contingencies
    involved; significantly undervalues the securities, assets or
    cash to be received by shareholders of the prospective portfolio
    company as a result of the contemplated transaction; or fails
    adequately to recognize the possibility that the offer or
    proposal may be replaced or superseded by an offer or proposal
    of greater value. The evaluation of such contingencies requires
    unusually broad knowledge and experience on the part of the
    Investment Adviser which must appraise not only the value of the
    issuer and its component businesses and the assets or securities
    to be received as a result of the contemplated transaction but
    also the financial resources and business motivation of the
    offeror and the dynamics and business climate when the offer or
    proposal is in process. The Investment Adviser has experience
    investing in securities subject to reorganization as a secondary
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    strategy, and has advised a registered open-end fund since May
    1993 and a registered closed-end fund since January 2007 which
    from time to time use risk arbitrage as a principal investment
    strategy. Since such investments are ordinarily short-term in
    nature, they will tend to increase the turnover ratio of the
    Fund, thereby increasing its brokerage and other transaction
    expenses. The Investment Adviser intends to select investments
    of this type which, in its view, have a reasonable prospect of
    capital appreciation which is significant in relation to both
    risk involved and the potential of available alternative
    investments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Temporary Defensive Investments.</I>&#160;&#160;Under normal
    market conditions at least 80% of the value of the Fund&#146;s
    total assets (taken at current value) will be invested in
    &#147;convertible securities,&#148; i.e., securities (bonds,
    debentures, notes, stocks and other similar securities) that are
    convertible into common stock or other equity securities, and
    &#147;income securities,&#148; i.e., nonconvertible debt or
    equity securities having a history of regular payments or
    accrual of income to holders. However, when a temporary
    defensive posture is believed by the Investment Adviser to be
    warranted (&#147;temporary defensive periods&#148;), the Fund
    may invest more heavily in securities of U.S.&#160;government
    sponsored instrumentalities and in money market mutual funds
    that invest in those securities, which, in the absence of an
    exemptive order, are not affiliated with the Investment Adviser.
    Obligations of certain agencies and instrumentalities of the
    U.S.&#160;government, such as the Government National Mortgage
    Association, are supported by the &#147;full faith and
    credit&#148; of the U.S.&#160;government; others, such as those
    of the Export-Import Bank of the U.S., are supported by the
    right of the issuer to borrow from the U.S.&#160;Treasury;
    others, such as those of the Federal National Mortgage
    Association, are supported by the discretionary authority of the
    U.S.&#160;government to purchase the agency&#146;s obligations;
    and still others, such as those of the Student Loan Marketing
    Association, are supported only by the credit of the
    instrumentality. No assurance can be given that the
    U.S.&#160;government would provide financial support to
    U.S.&#160;government sponsored instrumentalities if it is not
    obligated to do so by law. During temporary defensive periods,
    the Fund may be less likely to achieve its investment objective.
    See &#147;Management of the Fund&#151;General.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Options.</I>&#160;&#160;The Fund may, subject to guidelines
    of the Board, purchase or sell (i.e., write) options on
    securities, securities indices and foreign currencies that are
    listed on a national securities exchange or in the
    <FONT style="white-space: nowrap">U.S.&#160;over-the-counter</FONT>
    (&#147;OTC&#148;) markets as a means of achieving additional
    return or of hedging the value of the Fund&#146;s portfolio. The
    Fund may write covered call options on common stock that it owns
    or has an immediate right to acquire through conversion or
    exchange of other securities in an amount not to exceed 25% of
    total assets or invest up to 10% of its total assets in the
    purchase of put options on common stocks that the Fund owns or
    may acquire through the conversion or exchange of other
    securities that it owns. The Fund may not write covered call
    options in an amount exceeding 25% of the value of its total
    assets. The Fund&#146;s investment in OTC options is limited to
    5% of its total assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A call option is a contract that, in return for a premium, gives
    the holder of the option the right to buy from the writer of the
    call option the security or currency underlying the option at a
    specified exercise price at any time during the term of the
    option. The writer of the call option has the obligation, upon
    exercise of the option, to deliver the underlying security or
    currency upon payment of the exercise price during the option
    period. A put option is the reverse of a call option, giving the
    holder the right, in return for a premium, to sell the
    underlying security to the writer, at a specified price, and
    obligating the writer to purchase the underlying security from
    the holder at that price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the Fund has written an option, it may terminate its
    obligation by effecting a closing purchase transaction. This is
    accomplished by purchasing an option of the same series as the
    option previously written. However, once the Fund has been
    assigned an exercise notice, the Fund will be unable to effect a
    closing purchase transaction. Similarly, if the Fund is the
    holder of an option it may liquidate its position by effecting a
    closing sale transaction. This is accomplished by selling an
    option of the same series as the option previously purchased.
    There can be no assurance that either a closing purchase or sale
    transaction can be effected when the Fund so desires.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund will realize a profit from a closing transaction if the
    price of the transaction is less than the premium received from
    writing the option or is more than the premium paid to purchase
    the option; the Fund will realize a loss from a closing
    transaction if the price of the transaction is more than the
    premium received
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    from writing the option or is less than the premium paid to
    purchase the option. Since call option prices generally reflect
    increases in the price of the underlying security, any loss
    resulting from the repurchase of a call option may also be
    wholly or partially offset by unrealized appreciation of the
    underlying security. Other principal factors affecting the
    market value of a put or a call option include supply and
    demand, interest rates, the current market price and price
    volatility of the underlying security and the time remaining
    until the expiration date. Gains and losses on investments in
    options depend, in part, on the ability of the Investment
    Adviser to predict correctly the effect of these factors. The
    use of options cannot serve as a complete hedge since the price
    movement of securities underlying the options will not
    necessarily follow the price movements of the portfolio
    securities subject to the hedge.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    An option position may be closed out only on an exchange which
    provides a secondary market for an option of the same series or
    in a private transaction. Although the Fund will generally
    purchase or write only those options for which there appears to
    be an active secondary market, there is no assurance that a
    liquid secondary market on an exchange will exist for any
    particular option. In such event, it might not be possible to
    effect closing transactions in particular options, so that the
    Fund would have to exercise its options in order to realize any
    profit and would incur brokerage commissions upon the exercise
    of call options and upon the subsequent disposition of
    underlying securities for the exercise of put options.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Although the Investment Adviser will attempt to take appropriate
    measures to minimize the risks relating to the Fund&#146;s
    writing of put and call options, there can be no assurance that
    the Fund will succeed in any option-writing program it
    undertakes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund will not purchase options if, as a result, the
    aggregate cost of all outstanding options exceed 10% of the
    Fund&#146;s total assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Futures Contracts and Options on Futures.</I>&#160;&#160;The
    Fund may purchase and sell financial futures contracts and
    options thereon which are traded on a commodities exchange or
    board of trade for certain hedging, yield enhancement and risk
    management purposes, in accordance with regulations of the
    Commodity Futures Trading Commission (&#147;CFTC&#148;). A
    financial futures contract is an agreement to purchase or sell
    an agreed amount of securities or currencies at a set price for
    delivery in the future. These futures contracts and related
    options may be on debt securities, financial indices, securities
    indices, U.S.&#160;government securities and foreign currencies.
    Under the CFTC regulations, the Fund (i)&#160;may purchase and
    sell futures contracts and options thereon for bona fide hedging
    purposes, as defined under CFTC regulations, without regard to
    the percentage of the Fund&#146;s assets committed to margin and
    option premiums, and (ii)&#160;may enter into non-hedging
    transactions, provided that, immediately thereafter, the sum of
    the amount of the initial margin deposits on the Fund&#146;s
    existing futures positions and option premiums does not exceed
    5% of the market value of the Fund&#146;s total assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Forward Foreign Currency Exchange
    Contracts.</I>&#160;&#160;Subject to guidelines of the Board,
    the Fund may enter into forward foreign currency exchange
    contracts to protect the value of its portfolio against
    uncertainty in the level of future currency exchange rates. The
    Fund may enter into such contracts on a spot (i.e., cash) basis
    at the rate then prevailing in the currency exchange market or
    on a forward basis, by entering into a forward contract to
    purchase or sell currency. A forward contract on foreign
    currency is an obligation to purchase or sell a specific
    currency at a future date, which may be any fixed number of days
    agreed upon by the parties from the date of the contract at a
    price set on the date of the contract. The Fund expects to
    invest in forward currency contracts for hedging or currency
    risk management purposes and not in order to speculate on
    currency exchange rate movements, and the amount the Fund may
    invest in forward currency contracts is limited to the amount of
    its aggregate investments in foreign currencies. The Fund will
    only enter into forward currency contracts with parties which it
    believes to be creditworthy.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>When Issued, Delayed Delivery Securities and Forward
    Commitments.</I>&#160;&#160;The Fund may enter into forward
    commitments for the purchase or sale of securities, including on
    a &#147;when issued&#148; or &#147;delayed delivery&#148; basis,
    in excess of customary settlement periods for the type of
    security involved. In some cases, a forward commitment may be
    conditioned upon the occurrence of a subsequent event, such as
    approval and consummation of a merger, corporate reorganization
    or debt restructuring, i.e., a when, as and if issued
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    security. When such transactions are negotiated, the price is
    fixed at the time of the commitment, with payment and delivery
    taking place in the future, generally a month or more after the
    date of the commitment. While it will only enter into a forward
    commitment with the intention of actually acquiring the
    security, the Fund may sell the security before the settlement
    date if it is deemed advisable. Securities purchased under a
    forward commitment are subject to market fluctuation, and no
    interest (or dividends) accrues to the Fund prior to the
    settlement date. The Fund will maintain a segregated account of
    cash or liquid high-grade debt securities with the Fund&#146;s
    custodian in an aggregate at least equal to the amount of its
    forward commitments as long as the obligation to purchase
    continues.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Short Sales Against the Box.</I>&#160;&#160;The Fund may from
    time to time make short sales of securities it owns or has the
    right to acquire through conversion or exchange of other
    securities it owns. A short sale is &#147;against the box&#148;
    to the extent that the Fund contemporaneously owns or has the
    right to obtain at no added cost securities identical to those
    sold short. In a short sale, the Fund does not immediately
    deliver the securities sold or receive the proceeds from the
    sale. The Fund may not make short sales or maintain a short
    position if it would cause more than 25% of the Fund&#146;s
    total assets, taken at market value, to be held as collateral
    for such sales.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    To secure its obligations to deliver the securities sold short,
    the Fund will deposit in escrow in a separate account with its
    custodian an equal amount to the securities sold short or
    securities convertible into, or exchangeable for, such
    securities. The Fund may close out a short position by
    purchasing and delivering an equal amount of the securities sold
    short, rather than by delivering securities already held by the
    Fund, because the Fund may want to continue to receive interest
    and dividend payments on securities in its portfolio that are
    convertible into the securities sold short.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may make a short sale in order to hedge against market
    risks when it believes that the price of a security may decline,
    causing a decline in the value of a security owned by the Fund
    or a security convertible into, or exchangeable for, such
    security, or when the Fund does not want to sell the security it
    owns. Such short sale transactions may be subject to special tax
    rules, one of the effects of which may be to accelerate income
    to the Fund. Additionally, the Fund may use short sales in
    conjunction with the purchase of a convertible security when it
    is determined that a convertible security can be bought at a
    small conversion premium and has a yield advantage relative to
    the underlying common stock sold short.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Repurchase Agreements.</I>&#160;&#160;The Fund may enter into
    repurchase agreements with primary government securities dealers
    recognized by the Federal Reserve Bank of New York and member
    banks of the Federal Reserve System that furnish collateral at
    least equal in value or market price to the amount of their
    repurchase obligation. Repurchase agreements may be seen as
    loans by the Fund collateralized by underlying debt securities.
    Under the terms of a typical repurchase agreement, the Fund
    would acquire an underlying debt obligation for a relatively
    short period (usually not more than one week) subject to an
    obligation of the seller to repurchase, and the Fund to resell,
    the obligation at an agreed price and time. This arrangement
    results in a fixed rate of return to the Fund that is not
    subject to market fluctuations during the holding period. The
    Fund bears a risk of loss in the event that the other party to a
    repurchase agreement defaults on its obligations and the Fund is
    delayed in or prevented from exercising its rights to dispose of
    the collateral securities, including the risk of a possible
    decline in the value of the underlying securities during the
    period in which it seeks to assert these rights. The Investment
    Adviser, acting under the supervision of the Board, reviews the
    creditworthiness of those banks and dealers with which the Fund
    enters into repurchase agreements to evaluate these risks and
    monitors on an ongoing basis the value of the securities subject
    to repurchase agreements to ensure that the value is maintained
    at the required level.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Restricted and Illiquid Securities.</I>&#160;&#160;The Fund
    may invest in securities for which there is no readily available
    trading market or are otherwise illiquid. Illiquid securities
    include securities legally restricted as to resale, such as
    commercial paper issued pursuant to Section&#160;4(2) of the
    1933&#160;Act and securities eligible for resale pursuant to
    Rule&#160;144A thereunder. Section&#160;4(2) and Rule&#160;144A
    securities may, however, be treated as liquid by the Investment
    Adviser pursuant to procedures adopted by the Board, which
    require consideration of factors such as trading activity,
    availability of market quotations and number of dealers willing
    to purchase the
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    security. If the Fund invests in Rule&#160;144A securities, the
    level of portfolio illiquidity may be increased to the extent
    that eligible buyers become uninterested in purchasing such
    securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    It may be difficult to sell such securities at a price
    representing the fair value until such time as such securities
    may be sold publicly. Where registration is required, a
    considerable period may elapse between a decision to sell the
    securities and the time when it would be permitted to sell.
    Thus, the Fund may not be able to obtain as favorable a price as
    that prevailing at the time of the decision to sell. The Fund
    may also acquire securities through private placements under
    which it may agree to contractual restrictions on the resale of
    such securities. Such restrictions might prevent their sale at a
    time when such sale would otherwise be desirable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Foreign Securities.</I>&#160;&#160;The Fund may invest up to
    25% of its total assets in securities of
    <FONT style="white-space: nowrap">non-U.S.&#160;issuers,</FONT>
    which are generally denominated in foreign currencies. See
    &#147;Risk Factors and Special Considerations&#151;Risks of
    Investing in the Fund&#151;Foreign Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may purchase sponsored ADRs or
    U.S.&#160;dollar-denominated securities of foreign issuers,
    which will not be included in this foreign securities
    limitation. ADRs are receipts issued by U.S.&#160;banks or trust
    companies in respect of securities of foreign issuers held on
    deposit for use in the U.S.&#160;securities markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Industry Concentration.</I>&#160;&#160;The Fund may invest up
    to 25% of its total assets in securities of issuers in a single
    industry. See &#147;Risk Factors and Special
    Considerations&#151;Risks of Investing in the Fund&#151;Industry
    Concentration Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Leveraging.</I>&#160;&#160;As provided in the 1940 Act and
    subject to certain exceptions, the Fund may issue senior
    securities (which may be stock, such as preferred shares, or
    securities representing debt) so long as its total assets, less
    certain ordinary course liabilities, exceed 300% of the amount
    of the debt outstanding and exceed 200% of the amount of
    preferred shares and debt outstanding. Any such preferred shares
    may be convertible in accordance with SEC staff guidelines,
    which may permit the Fund to obtain leverage at attractive
    rates. For example, a fund that uses 33% leverage will show a
    1.5% increase or decline in net asset value for each 1% increase
    or decline in the value of its total assets. In addition, if the
    cost of leverage exceeds the return on the securities acquired
    with the proceeds of leverage, the use of leverage will diminish
    rather than enhance the return to the Fund. The Fund currently
    has 1,995,000&#160;shares of preferred stock authorized, which
    include the preferred shares being registered by this
    registration statement. The use of leverage magnifies the impact
    of changes in net asset value. The use of leverage generally
    increases the volatility of returns to the Fund. See &#147;Risk
    Factors and Special Considerations&#151;Leverage Risk.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In the event the Fund had both outstanding preferred shares and
    senior securities representing debt at the same time, the
    Fund&#146;s obligations to pay dividends or distributions and,
    upon liquidation of the Fund, liquidation payments in respect of
    its preferred shares would be subordinate to the Fund&#146;s
    obligations to make any principal
    <FONT style="white-space: nowrap">and/or</FONT>
    interest payments due and owing with respect to its outstanding
    senior debt securities. Accordingly, the Fund&#146;s issuance of
    senior securities representing debt would have the effect of
    creating special risks for the Fund&#146;s preferred
    shareholders that would not be present in a capital structure
    that did not include such securities. See &#147;Risk Factors and
    Special Considerations&#151;Special Risks of Notes to Holders of
    Preferred Shares.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Investment Restrictions.</I>&#160;&#160;The Fund has adopted
    certain investment restrictions as fundamental policies of the
    Fund. Under the 1940 Act, a fundamental policy may not be
    changed without the vote of a majority, as defined in the 1940
    Act, of the outstanding voting securities of the Fund (voting
    together as a single class). In addition, pursuant to the
    Fund&#146;s Articles&#160;Supplementary, a majority, as defined
    in the 1940 Act, of the outstanding preferred shares of the Fund
    (voting separately as a single class) is also required to change
    a fundamental policy. The Fund&#146;s investment restrictions
    are more fully discussed under &#147;Investment
    Restrictions&#148; in the SAI.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Loans of Portfolio Securities.</I>&#160;&#160;To increase
    income, the Fund may lend its portfolio securities to securities
    broker-dealers or financial institutions if (i)&#160;the loan is
    collateralized in accordance with applicable regulatory
    requirements and (ii)&#160;no loan will cause the value of all
    loaned securities to exceed 33% of the value of the Fund&#146;s
    total assets.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the borrower fails to maintain the requisite amount of
    collateral, the loan automatically terminates and the Fund could
    use the collateral to replace the securities while holding the
    borrower liable for any excess of replacement cost over the
    value of the collateral. As with any extension of credit, there
    are risks of delay in recovery and in some cases even loss of
    rights in collateral should the borrower of the securities
    violate the terms of the loan or fail financially. There can be
    no assurance that borrowers will not fail financially. On
    termination of the loan, the borrower is required to return the
    securities to the Fund, and any gain or loss in the market price
    during the loan would inure to the Fund. If the other party to
    the loan petitions for bankruptcy or becomes subject to the
    United States Bankruptcy Code, the law regarding the rights of
    the Fund is unsettled. As a result, under extreme circumstances,
    there may be a restriction on the Fund&#146;s ability to sell
    the collateral and the Fund would suffer a loss. See
    &#147;Investment Objective and Policies&#151;Additional
    Investment Policies&#151;Loans of Portfolio Securities&#148; in
    the SAI.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Warrants and Rights.</I>&#160;&#160;The Fund may invest
    without limit in warrants or rights (other than those acquired
    in units or attached to other securities) that entitle the
    holder to buy equity securities at a specific price for a
    specific period of time but will do so only if such equity
    securities are deemed appropriate by the Investment Adviser for
    inclusion in the Fund&#146;s portfolio.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Portfolio Turnover.</I>&#160;&#160;The Fund will buy and sell
    securities to accomplish its investment objective. The
    investment policies of the Fund may lead to frequent changes in
    investments, particularly in periods of rapidly fluctuating
    interest or currency exchange rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Portfolio turnover generally involves some expense to the Fund,
    including brokerage commissions or dealer
    <FONT style="white-space: nowrap">mark-ups</FONT> and
    other transaction costs on the sale of securities and
    reinvestment in other securities. The portfolio turnover rate is
    computed by dividing the lesser of the amount of the securities
    purchased or securities sold by the average monthly value of
    securities owned during the year (excluding securities whose
    maturities at acquisition were one year or less). Higher
    portfolio turnover may decrease the after-tax return to
    individual investors in the Fund to the extent it results in a
    decrease of the long term capital gains portion of distributions
    to shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    For the fiscal years ended December&#160;31, 2008, 2009 and
    2010, the portfolio turnover rate of the Fund was 76%, 71% and
    44%, respectively. The Fund anticipates that its portfolio
    turnover rate will generally not exceed 100%.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Further information on the investment objective and policies of
    the Fund are set forth in the SAI.
</DIV>
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    <BR>
    26
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='Y91316107'>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS AND SPECIAL CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Investors should consider the following risk factors and special
    considerations associated with investing in the Fund.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Risks to Holders of Notes</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    There may not be an established market for our notes. To the
    extent our notes trade, they may trade at a price either higher
    or lower than their principal amounts depending on interest
    rates, the rating (if any) on such notes and other factors.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Risks to Holders of Fixed Rate Preferred Shares</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Illiquidity Prior to Exchange Listing.</I>&#160;&#160;Prior
    to the offering of any additional series of fixed rate preferred
    shares, there will be no public market for such shares. In the
    event any fixed rate preferred shares are issued, prior
    application will have been made to list such shares on the NYSE.
    However, during an initial period, which is not expected to
    exceed 30&#160;days after the date of initial issuance, such
    shares may not be listed on any securities exchange. During such
    period, the underwriters may make a market in such shares,
    though, they will have no obligation to do so. Consequently, an
    investment in such shares may be illiquid during such period.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Market Price Fluctuation.</I>&#160;&#160;Fixed rate preferred
    shares may trade at a premium to or discount from liquidation
    preference for a variety of reasons, including changes in
    interest rates.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Risks for Holders of Variable Rate Preferred Shares</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Auction Risk.</I>&#160;&#160;You may not be able to sell your
    auction-rate preferred shares at an auction if the auction
    fails, i.e., if more auction-rate preferred shares are offered
    for sale than there are buyers for those shares. Also, if you
    place an order (a hold order) at an auction to retain
    auction-rate preferred shares only at a specified rate that
    exceeds the rate set at the auction, you will not retain your
    auction-rate preferred shares. Additionally, if you place a hold
    order without specifying a rate below which you would not wish
    to continue to hold your shares and the auction sets a
    below-market rate, you will receive a lower rate of return on
    your shares than the market rate. Finally, the dividend period
    may be changed, subject to certain conditions and with notice to
    the holders of the auction-rate preferred shares, which could
    also affect the liquidity of your investment. Since 2008, most
    auction-rate preferred share auctions have been unable to hold
    successful auctions and holders of such shares have suffered
    reduced liquidity. There can be no assurance that liquidity will
    improve.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Secondary Market Risk.</I>&#160;&#160;If you try to sell your
    auction-rate preferred shares between auctions, you may not be
    able sell them or, if you are able to sell them, you may not be
    able to do so for their liquidation preference per share or such
    amount per share plus accumulated dividends. If the Fund has
    designated a special dividend period of more than seven days,
    changes in interest rates could affect the price you would
    receive if you sold your shares in the secondary market.
    Broker-dealers that maintain a secondary trading market for the
    auction-rate preferred shares are not required to maintain this
    market, and the Fund is not required to redeem auction-rate
    preferred shares if either an auction or an attempted secondary
    market sale fails because of a lack of buyers. The auction-rate
    preferred shares will not be registered on a stock exchange. If
    you sell your auction-rate preferred shares to a broker-dealer
    between auctions, you may receive less than the price you paid
    for them, especially when market interest rates have risen since
    the last auction or during a special dividend period.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Risks to Holders of Notes and Preferred Shares</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Common Share Repurchases.</I>&#160;&#160;Repurchases of
    common shares by the Fund may reduce the net asset coverage of
    the notes and preferred shares, which could adversely affect
    their liquidity or market prices.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Common Share Distribution Policy.</I>&#160;&#160;In the event
    the Fund does not generate a total return from dividends and
    interest received and net realized capital gains in an amount at
    least equal to the greater of its stated distribution policy or
    the minimum distribution requirements of the Code in a given
    year, the Fund may return capital as part of its distribution.
    This would decrease the asset coverage per share with respect to
    the Fund&#146;s notes or preferred shares, which could adversely
    affect their liquidity or market prices.
</DIV>
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    <BR>
    27
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    For the fiscal year ended December&#160;31, 2010, the Fund made
    distributions of $0.47 per common share, of which $0.42
    constituted a return of capital. The composition of each
    distribution is estimated based on the earnings of the Fund as
    of the record date for each distribution. The actual composition
    of each of the current year&#146;s distributions will be based
    on the Fund&#146;s investment activity through the end of the
    calendar year.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Credit Quality Ratings.</I>&#160;&#160;In order to obtain and
    maintain attractive credit quality ratings for preferred shares
    or borrowings, the Fund&#146;s portfolio must satisfy
    over-collateralization tests established by the relevant rating
    agencies. These tests are more difficult to satisfy to the
    extent the Fund&#146;s portfolio securities are of lower credit
    quality, longer maturity or not diversified by issuer and
    industry. These guidelines could affect portfolio decisions and
    may be more stringent than those imposed by the 1940 Act. With
    respect to ratings (if any) of the notes or preferred shares, a
    rating by a ratings agency does not eliminate or necessarily
    mitigate the risks of investing in our preferred shares or
    notes, and a rating may not fully or accurately reflect all of
    the securities&#146; credit risks. A rating does not address the
    liquidity or any other market risks of the securities being
    rated. A rating agency could downgrade the rating of our notes
    or preferred shares, which may make such securities less liquid
    in the secondary market. If a rating agency downgrades the
    rating assigned to our preferred shares or notes, we may alter
    our portfolio or redeem the preferred shares or notes under
    certain circumstances.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Risks of Notes to Holders of Preferred Shares</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As provided in the 1940 Act, and subject to compliance with the
    Fund&#146;s investment limitations, the Fund may issue notes. In
    the event the Fund were to issue such securities, the
    Fund&#146;s obligations to pay dividends or make distributions
    and, upon liquidation of the Fund, liquidation payments in
    respect of its preferred shares would be subordinate to the
    Fund&#146;s obligations to make any principal and interest
    payments due and owing with respect to its outstanding notes.
    Accordingly, the Fund&#146;s issuance of notes would have the
    effect of creating special risks for the Fund&#146;s preferred
    shareholders that would not be present in a capital structure
    that did not include such securities.
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Risk to Holders of Common Shares</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Leverage Risk.</I>&#160;&#160;The Fund currently uses
    financial leverage for investment purposes by issuing preferred
    shares. As of March&#160;31, 2010, the amount of leverage
    represented approximately 29% of the Fund&#146;s net assets. The
    Fund&#146;s leveraged capital structure creates special risks
    not associated with unleveraged funds that have a similar
    investment objective and policies. These include the possibility
    of greater loss and the likelihood of higher volatility of the
    net asset value of the Fund and the asset coverage for the
    preferred shares. Such volatility may increase the likelihood of
    the Fund having to sell investments in order to meet its
    obligations to make distributions on the preferred shares or
    principal or interest payments on debt securities, or to redeem
    preferred shares or repay debt, when it may be disadvantageous
    to do so. The use of leverage magnifies both the favorable and
    unfavorable effects of price movements in the investments made
    by the Fund. To the extent the Fund is leveraged in its
    investment operations, the Fund will be subject to substantial
    risk of loss. The Fund cannot assure that borrowings or the
    issuance of preferred shares will result in a higher yield or
    return to the holders of the common shares. Also, if the Fund is
    utilizing leverage, a decline in net asset value could affect
    the ability of the Fund to make common share distributions and
    such a failure to make distributions could result in the Fund
    ceasing to qualify as a regulated investment company under the
    Code.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any decline in the net asset value of the Fund&#146;s
    investments would be borne entirely by the holders of common
    shares. Therefore, if the market value of the Fund&#146;s
    portfolio declines, the leverage will result in a greater
    decrease in net asset value to the holders of common shares than
    if the Fund were not leveraged. This greater net asset value
    decrease will also tend to cause a greater decline in the market
    price for the common shares. In such a case, the Fund might be
    in danger of failing to maintain the required asset coverage of
    its borrowings or preferred shares or of losing its ratings on
    its borrowings or preferred shares or, in an extreme case, the
    Fund&#146;s current investment income might not be sufficient to
    meet the interest or dividend requirements on its borrowings or
    preferred shares. In order to counteract such an event, the Fund
    might need to liquidate investments in order to fund a
    redemption of some or all of the preferred shares or notes.
</DIV>
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    <BR>
    28
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Preferred Share and Note Risk.</I>&#160;&#160;The issuance of
    preferred shares or notes causes the net asset value and market
    value of the common shares to become more volatile. If the
    dividend rate on the preferred shares or the interest rate on
    the notes approaches the net rate of return on the Fund&#146;s
    investment portfolio, the benefit of leverage to the holders of
    the common shares would be reduced. If the dividend rate on the
    preferred shares or the interest rate on the notes plus the
    management fee annual rate of 1.00% exceeds the net rate of
    return on the Fund&#146;s portfolio, the leverage will result in
    a lower rate of return to the holders of common shares than if
    the Fund had not issued preferred shares or notes. If the Fund
    has insufficient investment income and gains, all or a portion
    of the distributions to preferred shareholders or interest
    payments to note holders would come from the common
    shareholders&#146; capital. Such distributions and interest
    payments reduce the net assets attributable to common
    shareholders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition, the Fund would pay (and the holders of common
    shares will bear) all costs and expenses relating to the
    issuance and ongoing maintenance of the preferred shares,
    including the advisory fees on the incremental assets
    attributable to the preferred shares.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Holders of preferred shares may have different interests than
    holders of common shares and may at times have disproportionate
    influence over the Fund&#146;s affairs. Holders of preferred
    shares, voting separately as a single class, would have the
    right to elect two members of the Board of Directors at all
    times and in the event dividends become two full years in
    arrears would have the right to elect a majority of the
    Directors until such arrearage is completely eliminated. In
    addition, preferred shareholders have class voting rights on
    certain matters, including changes in fundamental investment
    restrictions and conversion of the fund to open-end status, and
    accordingly can veto any such changes.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 6%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Restrictions imposed on the declarations and payment of
    dividends or other distributions to the holders of the
    Fund&#146;s common shares and preferred shares, both by the 1940
    Act and by requirements imposed by rating agencies, might impair
    the Fund&#146;s ability to maintain its qualification as a
    regulated investment company for federal income tax purposes.
    While the Fund intends to redeem its preferred shares or notes
    to the extent necessary to enable the Fund to distribute its
    income as required to maintain its qualification as a regulated
    investment company under the Code, there can be no assurance
    that such actions can be effected in time to meet the Code
    requirements.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Portfolio Guidelines of Rating Agencies for Preferred Shares
    <FONT style="white-space: nowrap">and/or</FONT>
    Credit Facility</I>.&#160;&#160;In order to obtain and maintain
    attractive credit quality ratings for preferred shares or
    borrowings, the Fund must comply with investment quality,
    diversification and other guidelines established by the relevant
    rating agencies. These guidelines could affect portfolio
    decisions and may be more stringent than those imposed by the
    1940 Act. In the event that a rating on the Fund&#146;s
    preferred shares or notes is lowered or withdrawn by the
    relevant rating agency, the Fund may also be required to redeem
    all or part of its outstanding preferred shares or notes, and
    the common shares of the Fund will lose the potential benefits
    associated with a leveraged capital structure.
</TD>
</TR>


<TR style="line-height: 4pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    <I>Impact on Common Shares.</I>&#160;&#160;The following table
    is furnished in response to requirements of the SEC. It is
    designed to illustrate the effect of leverage on common share
    total return, assuming investment portfolio total returns
    (comprised of net investment income of the Fund, realized gains
    or losses of the Fund and changes in the value of the securities
    held in the Fund&#146;s portfolio) of &#8722;10%, &#8722;5%, 0%,
    5% and 10%. These assumed investment portfolio returns are
    hypothetical figures and are not necessarily indicative of the
    investment portfolio returns experienced or expected to be
    experienced by the Fund. See &#147;Risks.&#148; The table
    further reflects leverage representing 23% of the Fund&#146;s
    total assets, the Fund&#146;s current projected blended annual
    average leverage dividend or interest rate of 6%, a management
    fee at an annual rate of 1.00% of the liquidation preference of
    any outstanding preferred shares and estimated annual
    incremental expenses attributable to any outstanding preferred
    shares of [0.01]% of the Fund&#146;s net assets attributable to
    common shares.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="67%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Assumed Portfolio Total Return (Net of Expenses)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (10
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (5
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Common Share Total Return
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (15.73
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (9.23
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    (2.74
</TD>
<TD nowrap align="left" valign="bottom">
    )%
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3.75
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.25
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Common share total return is composed of two elements&#151;the
    common share distributions paid by the Fund (the amount of which
    is largely determined by the taxable income of the Fund
    (including realized gains
</DIV>
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    <BR>
    29
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    or losses) after paying interest on any debt
    <FONT style="white-space: nowrap">and/or</FONT>
    dividends on any preferred shares) and unrealized gains or
    losses on the value of the securities the Fund owns. As required
    by SEC rules, the table assumes that the Fund is more likely to
    suffer capital losses than to enjoy total return. For example,
    to assume a total return of 0% the Fund must assume that the
    income it receives on its investments is entirely offset by
    expenses and losses in the value of those investments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Market Discount Risk.</I>&#160;&#160;Whether investors will
    realize gains or losses upon the sale of common shares of the
    Fund will depend upon the market price of the shares at the time
    of sale, which may be less or more than the Fund&#146;s net
    asset value per share. Since the market price of the common
    shares will be affected by such factors as the Fund&#146;s
    dividend and distribution levels (which are in turn affected by
    expenses), dividend and distribution stability, net asset value,
    market liquidity, the relative demand for and supply of the
    shares in the market, general market and economic conditions and
    other factors beyond the control of the Fund, we cannot predict
    whether the common shares will trade at, below or above net
    asset value or at, below or above the public offering price.
    Common shares of closed-end funds often trade at a discount to
    their net asset values and the Fund&#146;s common shares may
    trade at such a discount. This risk may be greater for investors
    expecting to sell their common shares of the Fund soon after
    completion of the public offering. The common shares of the Fund
    are designed primarily for long-term investors, and investors in
    the shares should not view the Fund as a vehicle for trading
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Inflation Risk.</I>&#160;&#160;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 Fund&#146;s
    shares and distributions thereon can decline. In addition,
    during any periods of rising inflation, dividend rates of any
    variable rate preferred stock or debt securities issued by the
    Fund would likely increase, which would tend to further reduce
    returns to common shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks of
    Investing in the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Credit Risk for Convertible Securities and Fixed Income
    Securities.</I>&#160;&#160;Many convertible securities are not
    investment grade, that is, not rated within the four highest
    categories by S&#038;P and Moody&#146;s. To the extent that the
    Fund&#146;s convertible securities and any other fixed income
    securities are rated lower than investment grade or are not
    rated, there would be a greater risk as to the timely repayment
    of the principal of, and timely payment of interest or dividends
    on, those securities. It is expected that not more than 50% of
    the Fund&#146;s portfolio will consist of securities rated CCC
    or lower by S&#038;P or Caa or lower by Moody&#146;s or, if
    unrated, are of comparable quality as determined by the
    Investment Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Securities rated BB or lower by S&#038;P or Ba or lower by
    Moody&#146;s are often referred to in the financial press as
    &#147;junk bonds&#148; and may include securities of issuers in
    default. &#147;Junk bonds&#148; are considered by the rating
    agencies to be predominantly speculative and may involve major
    risk exposures such as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    greater volatility and credit risk;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    vulnerability to economic downturns and changes in interest
    rates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    sensitivity to adverse economic changes and corporate
    developments;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    additional expenses to pursue recovery from issuers that default;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    redemption or call provisions that may be exercised at
    inopportune times;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    difficulty in accurately valuing or disposing of such securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    subordination to other debt of the issuer;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    junk bonds are generally unsecured.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Convertible securities and other income securities need not meet
    a minimum rating standard in order to be acceptable for
    investment by the Fund.
</DIV>
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    <BR>
    30
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition, the prices of these lower grade securities are more
    sensitive to negative developments, such as a decline in the
    issuer&#146;s revenues or a general economic downturn, than are
    the prices of higher grade securities. Lower grade securities
    tend to be less liquid than investment grade securities. The
    market value of lower grade securities may be more volatile than
    the market value of investment grade securities and generally
    tends to reflect the market&#146;s perception of the
    creditworthiness of the issuer and short-term market
    developments to a greater extent than investment grade
    securities, which primarily reflect fluctuations in general
    levels of interest rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Securities ratings are relative and subjective and not absolute
    standards of quality. They are based largely on an issuer&#146;s
    historical financial condition and the rating agency&#146;s
    analysis at the time of the rating. Consequently, the rating
    assigned to any particular security is not necessarily a
    reflection of the issuer&#146;s current financial condition.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As a part of its investments in lower grade fixed-income
    securities, the Fund may invest in the securities of issuers in
    default. The Fund will invest in securities of issuers in
    default only when the Investment Adviser believes that such
    issuers will honor their obligations and emerge from bankruptcy
    protection and that the value of such issuers&#146; securities
    will appreciate. By investing in the securities of issuers in
    default, the Fund bears the risk that these issuers will not
    continue to honor their obligations or emerge from bankruptcy
    protection or that the value of these securities will not
    otherwise appreciate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Generally, lower grade securities and unrated securities of
    comparable quality offer a higher current yield than is offered
    by higher rated securities, but also (i)&#160;will likely have
    some quality and protective characteristics that, in the
    judgment of the rating organizations, are outweighed by large
    uncertainties or major risk exposures to adverse conditions and
    (ii)&#160;are predominantly speculative with respect to the
    issuer&#146;s capacity to pay interest and repay principal in
    accordance with the terms of the obligation. The market values
    of certain of these securities also tend to be more sensitive to
    individual corporate developments and changes in economic
    conditions than higher quality bonds. In addition, unrated
    securities generally present a higher degree of credit risk. The
    risk of loss due to default by these issuers is significantly
    greater because lower grade securities and unrated securities of
    comparable quality generally are unsecured and frequently are
    subordinated to the prior payment of senior indebtedness. In
    light of these risks, the Investment Adviser, in evaluating the
    creditworthiness of an issue, whether rated or unrated, will
    take various factors into consideration, which may include, as
    applicable, the issuer&#146;s operating history, financial
    resources and its sensitivity to economic conditions and trends,
    the market support for the facility financed by the issue, the
    perceived ability and integrity of the issuer&#146;s management
    and regulatory matters.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition, the market value of securities in lower rated
    categories is more volatile than that of higher quality
    securities, and the markets in which such lower rated or unrated
    securities are traded are more limited than those in which
    higher rated securities are traded. The existence of limited
    markets may make it more difficult for the Fund to obtain
    accurate market quotations for purposes of valuing its portfolio
    and calculating its net asset value. Moreover, the lack of a
    liquid trading market may restrict the availability of
    securities for the Fund to purchase and may also have the effect
    of limiting the ability of the Fund to sell securities at their
    fair value in order to respond to changes in the economy or the
    financial markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Lower grade securities and unrated securities of comparable
    quality also present risks based on payment expectations. If an
    issuer calls the obligation for redemption (often a feature of
    fixed-income securities), the Fund may have to replace the
    security with a lower yielding security, resulting in a
    decreased return for investors. Also, as the principal value of
    nonconvertible bonds and preferred stocks moves inversely with
    movements in interest rates, in the event of rising interest
    rates the value of the securities held by the Fund may decline
    proportionately more than a portfolio consisting of higher rated
    securities. Investments in zero coupon bonds may be more
    speculative and subject to greater fluctuations in value due to
    changes in interest rates than bonds that pay interest
    currently. Interest rates are at historical lows and, therefore,
    it is likely that they will rise in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition to using recognized rating agencies and other
    sources, the Investment Adviser also performs its own analysis
    of issues in seeking investments that it believes to be
    underrated (and thus higher yielding) in
</DIV>
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    <BR>
    31
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    light of the financial condition of the issuer. Its analysis of
    issuers may include, among other things, current and anticipated
    cash flow and borrowing requirements, value of assets in
    relation to historical cost, strength of management,
    responsiveness to business conditions, credit standing and
    current anticipated results of operations. In selecting
    investments for the Fund, the Investment Adviser may also
    consider general business conditions, anticipated changes in
    interest rates and the outlook for specific industries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Subsequent to its purchase by the Fund, an issue of securities
    may cease to be rated or its rating may be reduced. In addition,
    it is possible that statistical rating agencies might change
    their ratings of a particular issue to reflect subsequent events
    on a timely basis. Moreover, such ratings do not assess the risk
    of a decline in market value. None of these events will require
    the sale of the securities by the Fund, although the Investment
    Adviser will consider these events in determining whether the
    Fund should continue to hold the securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The market for lower grade and comparable unrated securities has
    experienced periods of significantly adverse price and liquidity
    several times, particularly at or around times of economic
    recession. Past market recessions have adversely affected the
    value of such securities and the ability of certain issuers of
    such securities to repay principal and pay interest thereon or
    to refinance such securities. The market for those securities
    may react in a similar fashion in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    For a description of the ratings categories of certain
    recognized statistical ratings agencies, see Appendix&#160;A to
    this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Dilution Risk for Convertible Securities.</I>&#160;&#160;In
    the absence of adequate anti-dilution provisions in a
    convertible security, dilution in the value of the Fund&#146;s
    holding may occur in the event the underlying stock is
    subdivided, additional equity securities are issued for below
    market value, a stock dividend is declared, or the issuer enters
    into another type of corporate transaction that has a similar
    effect.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Interest Rate Risk for Fixed Income
    Securities.</I>&#160;&#160;The primary risk associated with
    fixed income securities is interest rate risk. A decrease in
    interest rates will generally result in an increase in the value
    of a fixed income security, while increases in interest rates
    will generally result in a decline in its value. This effect is
    generally more pronounced for fixed rate securities than for
    securities whose income rate is periodically reset. Market
    interest rates recently have declined significantly below
    historical average rates, which may increase the risk that these
    rates will rise in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Further, while longer term fixed rate securities may pay higher
    interest rates than shorter term securities, longer term fixed
    rate securities, like fixed rate securities, also tend to be
    more sensitive to interest rate changes and, accordingly, tend
    to experience larger changes in value as a result of interest
    rate changes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Distribution Risk for Equity Income
    Securities.</I>&#160;&#160;In selecting equity income securities
    in which the Fund will invest, the Investment Adviser will
    consider the issuer&#146;s history of making regular periodic
    distributions (i.e., dividends) to its equity holders. An
    issuer&#146;s history of paying dividends, however, does not
    guarantee that the issuer will continue to pay dividends in the
    future. The dividend income stream associated with equity income
    securities generally is not guaranteed and will be subordinate
    to payment obligations of the issuer on its debt and other
    liabilities. Accordingly, in the event the issuer does not
    realize sufficient income in a particular period both to service
    its liabilities and to pay dividends on its equity securities,
    it may forgo paying dividends on its equity securities. In
    addition, because in most instances issuers are not obligated to
    make periodic distributions to the holders of their equity
    securities, such distributions or dividends generally may be
    discontinued at the issuer&#146;s discretion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Equity Risk.</I>&#160;&#160;The principal risk of investing
    in equity securities is equity risk. Equity risk is the risk
    that the price of an equity security will fall due to general
    market and economic conditions, perceptions regarding the
    industry in which the issuer participates or the issuing
    company&#146;s particular circumstances. Common stock in which
    the Fund will invest or receive upon conversion of convertible
    securities is subject to such equity risk. In the case of
    convertible securities, it is the conversion value of a
    convertible security that is subject to the equity risk; that
    is, if the appreciation potential of a convertible security is
    not realized, the premium paid
</DIV>
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    <BR>
    32
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    for its conversion value may not be recovered. See
    &#147;Investment Objective and Policies&#151;Investment
    Practices&#151;Convertible Securities.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Prepayment Risks on Government Sponsored Mortgage-Backed
    Securities.</I>&#160;&#160;The yield and maturity
    characteristics of government sponsored mortgage-backed
    securities differ from traditional debt securities. A major
    difference is that the principal amount of the obligations may
    generally be prepaid at any time because the underlying assets
    (i.e., loans) generally may be prepaid at any time. Prepayment
    risks include the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the relationship between prepayments and interest rates may give
    some lower grade government sponsored mortgage-backed securities
    less potential for growth in value than conventional bonds with
    comparable maturities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    in addition, when interest rates fall, the rate of prepayments
    tends to increase. During such periods, the reinvestment of
    prepayment proceeds by the Fund will generally be at lower rates
    than the rates that were carried by the obligations that have
    been prepaid;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    because of these and other reasons, a government sponsored
    mortgage-backed security&#146;s total return and maturity may be
    difficult to predict;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    to the extent that the Fund purchases government sponsored
    mortgage-backed securities at a premium, prepayments may result
    in loss of the Fund&#146;s principal investment to the extent of
    premium paid.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Illiquid Securities.</I>&#160;&#160;The Fund has no limit on
    the amount of its net assets it may invest in unregistered and
    otherwise illiquid investments. Unregistered securities are
    securities that cannot be sold publicly in the United States
    without registration under the 1933&#160;Act. Unregistered
    securities generally can be resold only in privately negotiated
    transactions with a limited number of purchasers or in a public
    offering registered under the 1933&#160;Act. Considerable delay
    could be encountered in either event and, unless otherwise
    contractually provided for, the Fund&#146;s proceeds upon sale
    may be reduced by the costs of registration or underwriting
    discounts. The difficulties and delays associated with such
    transactions could result in the Fund&#146;s inability to
    realize a favorable price upon disposition of unregistered
    securities, and at times might make disposition of such
    securities impossible.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Unregistered convertible securities or the securities obtained
    upon conversion normally may be resold publicly under certain
    volume and other restrictions beginning one year following the
    acquisition of the securities obtained upon conversion and
    without any restrictions beginning two years after the
    acquisition of the securities obtained upon conversion.
    Unregistered securities that are freely salable among qualified
    institutional investors under special rules adopted by the SEC
    may be treated as liquid if they satisfy institutional liquidity
    standards established by the Board. The continued liquidity of
    such securities is not as well assured as that of publicly
    traded securities, and accordingly, the Board will monitor their
    liquidity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Industry Concentration Risk.</I>&#160;&#160;The Fund may
    invest up to 25% of its total assets in securities of a single
    industry. Should the Fund choose to do so, the net asset value
    of the Fund will be more susceptible to factors affecting those
    particular types of companies, which, depending on the
    particular industry, may include, among others: governmental
    regulation; inflation; cost increases in raw materials, fuel and
    other operating expenses; technological innovations that may
    render existing products and equipment obsolete; and increasing
    interest rates resulting in high interest costs on borrowings
    needed for capital investment, including costs associated with
    compliance with environmental and other regulations. In such
    circumstances the Fund&#146;s investments may be subject to
    greater risk and market fluctuation than a fund that had
    securities representing a broader range of industries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Foreign Securities Risk.</I>&#160;&#160;The Fund may invest
    up to 25% of its total assets in the securities of foreign
    issuers. Investments in the securities of foreign issuers
    involve certain considerations and risks not ordinarily
    associated with investments in securities of domestic issuers.
    Foreign companies are not generally subject to uniform
    accounting, auditing and financial standards and requirements
    comparable to those applicable to U.S.&#160;companies. Foreign
    securities exchanges, brokers and listed companies may be
    subject to less government
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    supervision and regulation than exists in the United States.
    Dividend and interest income may be subject to withholding and
    other foreign taxes, which may adversely affect the net return
    on such investments. There may be difficulty in obtaining or
    enforcing a court judgment abroad. In addition, it may be
    difficult to effect repatriation of capital invested in certain
    countries. In addition, with respect to certain countries, there
    are risks of expropriation, confiscatory taxation, political or
    social instability or diplomatic developments that could affect
    assets of the Fund held in foreign countries. Dividend income
    the Fund receives from foreign securities may not be eligible
    for the special tax treatment applicable to qualified dividend
    income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    There may be less publicly available information about a foreign
    company than a U.S.&#160;company. Foreign securities markets may
    have substantially less volume than U.S.&#160;securities markets
    and some foreign company securities are less liquid than
    securities of otherwise comparable U.S.&#160;companies. A
    portfolio of foreign securities may also be adversely affected
    by fluctuations in the rates of exchange between the currencies
    of different nations and by exchange control regulations.
    Foreign markets also have different clearance and settlement
    procedures that could cause the Fund to encounter difficulties
    in purchasing and selling securities on such markets and may
    result in the Fund missing attractive investment opportunities
    or experiencing loss. In addition, a portfolio that includes
    foreign securities can expect to have a higher expense ratio
    because of the increased transaction costs on
    <FONT style="white-space: nowrap">non-U.S.&#160;securities</FONT>
    markets and the increased costs of maintaining the custody of
    foreign securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund also may purchase ADRs or U.S.&#160;dollar-denominated
    securities of foreign issuers which will not be included in the
    25% foreign securities limitation. ADRs are receipts issued by
    U.S.&#160;banks or trust companies in respect of securities of
    foreign issuers held on deposit for use in the
    U.S.&#160;securities markets. While ADRs may not necessarily be
    denominated in the same currency as the securities into which
    they may be converted, many of the risks associated with foreign
    securities may also apply to ADRs. In addition, the underlying
    issuers of certain depositary receipts, particularly unsponsored
    or unregistered depositary receipts, are under no obligation to
    distribute shareholder communications to the holders of such
    receipts, or to pass through to them any voting rights with
    respect to the deposited securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Smaller Companies.</I>&#160;&#160;While the Fund intends to
    focus on the securities of established suppliers of accepted
    products and services, the Fund may also invest in smaller
    companies which may benefit from the development of new products
    and services. These smaller companies may present greater
    opportunities for capital appreciation, and may also involve
    greater investment risk than larger, more established companies.
    For example, smaller companies may have more limited product
    lines, market or financial resources and their securities may
    trade less frequently and in lower volume than the securities of
    larger, more established companies. As a result, the prices of
    the securities of such smaller companies may fluctuate to a
    greater degree than the prices of securities of other issuers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Investment Companies.</I>&#160;&#160;The Fund may invest in
    the securities of other investment companies to the extent
    permitted by law. To the extent the Fund invests in the common
    equity of investment companies, the Fund will bear its ratable
    share of any such investment company&#146;s expenses, including
    management fees. The Fund will also remain obligated to pay
    management fees to the Investment Adviser with respect to the
    assets invested in the securities of other investment companies.
    In these circumstances holders of the Fund&#146;s common shares
    will be subject to duplicative investment expenses. The Fund
    will not purchase the securities of affiliated investment
    companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Loans of Portfolio Securities.</I>&#160;&#160;Consistent with
    applicable regulatory requirements and the Fund&#146;s
    investment restrictions, the Fund may lend its portfolio
    securities to securities broker-dealers or financial
    institutions, provided that such loans are callable at any time
    by the Fund (subject to notice provisions described in the SAI),
    and are at all times secured by cash or cash equivalents, which
    are maintained in a segregated account pursuant to applicable
    regulations and that are at least equal to the market value,
    determined daily, of the loaned securities. The advantage of
    such loans is that the Fund continues to receive the income on
    the loaned securities while at the same time earning interest on
    the cash amounts deposited as collateral, which will be invested
    in short-term obligations. The Fund will not lend its portfolio
    securities if such loans are not permitted by the laws or
    regulations of any state in which its shares are qualified for
    sale.
</DIV>
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    <BR>
    34
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s loans of portfolio securities will be
    collateralized in accordance with applicable regulatory
    requirements and no loan will cause the value of all loaned
    securities to exceed 33% of the value of the Fund&#146;s total
    assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    For a further description of such loans of portfolio securities,
    see &#147;Investment Objective and Policies&#151;Additional
    Investment Policies&#151;Loans of Portfolio Securities&#148; in
    the SAI.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Management Risk.</I>&#160;&#160;The Fund is subject to
    management risk because it is an actively managed portfolio. The
    Investment Adviser will apply investment techniques and risk
    analyses in making investment decisions for the Fund, but there
    can be no guarantee that these will produce the desired results.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Interest Rate Transactions.</I>&#160;&#160;The Fund may enter
    into an indirect swap or cap transaction with respect to all or
    a portion of any future series of variable rate preferred
    shares. The use of interest rate swaps and caps is a highly
    specialized activity that involves certain risks to the Fund
    including, among others, counterparty risk and early termination
    risk. See &#147;How the Fund&#160;Manages Risk&#151;Interest
    Rate Transactions.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Dependence on Key Personnel.</I>&#160;&#160;The Investment
    Adviser is dependent upon the expertise of Mr.&#160;Mario J.
    Gabelli in providing advisory services with respect to the
    Fund&#146;s investments. If the Investment Adviser were to lose
    the services of Mr.&#160;Gabelli, its ability to service the
    Fund could be adversely affected. There can be no assurance that
    a suitable replacement could be found for Mr.&#160;Gabelli in
    the event of his death, resignation, retirement or inability to
    act on behalf of the Investment Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Market Disruption and Geopolitical Risk.</I>&#160;&#160;The
    terrorist attacks on domestic U.S.&#160;targets on
    September&#160;11, 2001, the wars in Iraq and Afghanistan and
    other geopolitical events have led to, and may in the future
    lead to, increased short-term market volatility and may have
    long-term effects on U.S.&#160;and world economies and markets.
    The nature, scope and duration of the war and occupation cannot
    be predicted with any certainty. Similar events in the future or
    other disruptions of financial markets could affect interest
    rates, securities exchanges, auctions, secondary trading,
    ratings, credit risk, inflation, energy prices and other factors
    relating to the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Recent Economic Events.</I>&#160;&#160;While the
    U.S.&#160;and global markets had experienced extreme volatility
    and disruption for an extended period of time, fiscal year 2010
    witnessed more stabilized economic activity as expectations for
    an economic recovery increased. However, risks to a robust
    resumption of growth persist: a weak consumer weighed down by
    too much debt and increasing joblessness, the growing size of
    the federal budget deficit and national debt, and the threat of
    inflation. A return to unfavorable economic conditions could
    impair the Fund&#146;s ability to execute its investment
    strategies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Government Intervention in Financial Markets
    Risk.</I>&#160;&#160;The recent instability in the financial
    markets has led the U.S.&#160;government and foreign governments
    to take a number of unprecedented actions designed to support
    certain financial institutions and segments of the financial
    markets that have experienced extreme volatility, and in some
    cases a lack of liquidity. U.S.&#160;federal and state
    governments and foreign governments, their regulatory agencies
    or self regulatory organizations may take additional actions
    that affect the regulation of the securities in which the Fund
    invests, or the issuers of such securities, in ways that are
    unforeseeable. Issuers of corporate securities might seek
    protection under the bankruptcy laws. Legislation or regulation
    may also change the way in which the Fund itself is regulated.
    Such legislation or regulation could limit or preclude the
    Fund&#146;s ability to achieve its investment objectives. The
    Investment Adviser will monitor developments and seek to manage
    the Fund&#146;s portfolio in a manner consistent with achieving
    the Fund&#146;s investment objectives, but there can be no
    assurance that it will be successful in doing so.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Long-Term Objective.</I>&#160;&#160;The Fund is intended for
    investors seeking a high level of total return over the
    long-term. The Fund is not meant to provide a vehicle for those
    who wish to play short-term swings in the stock market. An
    investment in shares of the Fund should not be considered a
    complete investment program. Each shareholder should take into
    account the Fund&#146;s investment objective as well as the
    shareholder&#146;s other investments when considering an
    investment in the Fund.
</DIV>
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    <BR>
    35
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Anti-Takeover Provisions.</I>&#160;&#160;The Fund&#146;s
    Governing Documents 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. See
    &#147;Anti-Takeover Provisions of the Fund&#146;s Governing
    Documents.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Status as a Regulated Investment Company.</I>&#160;&#160;The
    Fund has elected and has qualified, and intends to remain
    qualified, for U.S.&#160;federal income tax purposes as a
    regulated investment company under Subchapter M of the Code.
    Qualification requires, among other things, compliance by the
    Fund with certain distribution requirements. Statutory
    limitations on distributions on the common shares if the Fund
    fails to satisfy the 1940 Act&#146;s asset coverage requirements
    could jeopardize the Fund&#146;s ability to meet such
    distribution requirements. The Fund presently intends, however,
    to purchase or redeem notes or preferred shares to the extent
    necessary in order to maintain compliance with such asset
    coverage requirements. See &#147;Taxation&#148; for a more
    complete discussion of these and other U.S.&#160;federal income
    tax considerations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Risks Related to Derivative Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may participate in derivative transactions. Such
    transactions entail certain execution, market, liquidity,
    hedging, and tax risks. Participation in the options or futures
    markets and in currency exchange transactions involves
    investment risks and transaction costs to which the Fund would
    not be subject absent the use of these strategies. If the
    Investment Adviser&#146;s prediction of movements in the
    direction of the securities, foreign currency and interest rate
    markets is inaccurate, the consequences to the Fund may leave
    the Fund in a worse position than if it had not used such
    strategies. Risks inherent in the use of options, foreign
    currency, futures contracts and options on futures contracts,
    securities indices and foreign currencies include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    dependence on the Investment Adviser&#146;s ability to predict
    correctly movements in the direction of interest rates,
    securities prices and currency markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    imperfect correlation between the price of options and futures
    contracts and options thereon and movements in the prices of the
    securities or currencies being hedged;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the fact that skills needed to use these strategies are
    different from those needed to select portfolio securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the possible absence of a liquid secondary market for any
    particular instrument at any time;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the possible need to defer closing out certain hedged positions
    to avoid adverse tax consequences;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the possible inability of the Fund to purchase or sell a
    security at a time that otherwise would be favorable for it to
    do so, or the possible need for the Fund to sell a security at a
    disadvantageous time due to a need for the Fund to maintain
    &#147;cover&#148; or to segregate securities in connection with
    the hedging techniques;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the creditworthiness of counterparties.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Futures Transactions.</I>&#160;&#160;The Fund may invest
    without limit in futures contracts. Futures and options on
    futures entail certain risks, including but not limited to the
    following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    no assurance that futures contracts or options on futures can be
    offset at favorable prices;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    possible reduction of the return of the Fund due to the use of
    hedging;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    possible reduction in value of both the securities hedged and
    the hedging instrument;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    possible lack of liquidity due to daily limits or price
    fluctuations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    imperfect correlation between the contracts and the securities
    being hedged;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    losses from investing in futures transactions that are
    potentially unlimited and the segregation requirements for such
    transactions.
</TD>
</TR>

</TABLE>
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    <BR>
    36
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Forward Currency Exchange Contracts.</I>&#160;&#160;There is
    no independent limit on the Fund&#146;s ability to invest in
    foreign currency exchange contracts. The use of forward currency
    contracts may involve certain risks, including the failure of
    the counterparty to perform its obligations under the contract
    and that the use of forward contracts may not serve as a
    complete hedge because of an imperfect correlation between
    movements in the prices of the contracts and the prices of the
    currencies hedged or used for cover.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Counterparty Risk.</I>&#160;&#160;The Fund will be subject to
    credit risk with respect to the counterparties to the derivative
    contracts purchased by the Fund. If a counterparty becomes
    bankrupt or otherwise fails to perform its obligations under a
    derivative contract due to financial difficulties, the Fund may
    experience significant delays in obtaining any recovery under
    the derivative contract in bankruptcy or other reorganization
    proceeding. The Fund may obtain only a limited recovery or may
    obtain no recovery in such circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>For a further description of such derivative investments, see
    &#147;Investment Objective and Policies&#151;Additional
    Investment Policies&#148; in the SAI.</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Special
    Risks Related to Preferred Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    There are special risks associated with the Fund investing in
    preferred securities, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Deferral.</I>&#160;&#160;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. If the Fund owns a preferred
    security on which distributions are being deferred by the
    issuer, the Fund may be required to report income for tax
    purposes although it has not yet received such deferred
    distributions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Non-Cumulative Dividends.</I>&#160;&#160;Some preferred
    stocks are non-cumulative, meaning that the dividends do not
    accumulate and need not ever be paid. A portion of the portfolio
    may include investments in non-cumulative preferred securities,
    whereby the issuer does not have an obligation to make up any
    arrearages to its shareholders. Should an issuer of a
    non-cumulative preferred stock held by the Fund determine not to
    pay dividends on such stock, the Fund&#146;s return from that
    security may be adversely affected. There is no assurance that
    dividends or distributions on non-cumulative preferred stocks in
    which the Fund invests will be declared or otherwise made
    payable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Subordination.</I>&#160;&#160;Preferred securities are
    subordinated to bonds and other debt instruments in a
    company&#146;s capital structure in terms of priority to
    corporate income and liquidation payments, and therefore will be
    subject to greater credit risk than more senior debt security
    instruments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Liquidity.</I>&#160;&#160;Preferred securities may be
    substantially less liquid than many other securities, such as
    common stocks or U.S.&#160;Government securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Limited Voting Rights.</I>&#160;&#160;Generally, preferred
    security holders (such as the Fund) 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 be entitled to elect a number
    of directors to the issuer&#146;s board. Generally, once all the
    arrearages have been paid, the preferred security holders no
    longer have voting rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Special Redemption&#160;Rights.</I>&#160;&#160;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 federal income tax or securities laws.
    As with call provisions, a redemption by the issuer may
    negatively impact the return of the security held by the Fund.
</DIV>

<A name='Y91316108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">HOW THE
    FUND&#160;MANAGES RISK</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Restrictions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund has adopted certain investment limitations, some of
    which are fundamental policies of the Fund, designed to limit
    investment risk and maintain portfolio diversification. Under
    the 1940 Act, a
</DIV>
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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    fundamental policy may not be changed without the vote of a
    majority, as defined in the 1940 Act, of the outstanding voting
    securities of the Fund (voting together as a single class). In
    addition, pursuant to the Articles&#160;Supplementary of each of
    the series of preferred shares, a majority, as defined in the
    1940 Act, of the outstanding preferred shares of the Fund
    (voting separately as a single class) is also required to change
    a fundamental policy. The Fund may become subject to guidelines
    that are more limiting than its current investment restrictions
    in order to obtain and maintain ratings from Moody&#146;s and
    S&#038;P on its preferred shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Interest
    Rate Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may enter into an interest rate swap or cap transaction
    with respect to all or a portion of any future series of
    variable rate preferred shares. Through these transactions the
    Fund may, for example, obtain the equivalent of a fixed rate for
    a series of variable rate preferred shares that is lower than
    the Fund would have to pay if it issued fixed rate preferred
    shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The use of interest rate swaps and caps is a highly specialized
    activity that involves investment techniques and risks different
    from those associated with ordinary portfolio security
    transactions. In an interest rate swap, the Fund would agree to
    pay to the other party to the interest rate swap (which is known
    as the &#147;counterparty&#148;) periodically a fixed rate
    payment in exchange for the counterparty agreeing to pay to the
    Fund periodically a variable rate payment that is intended to
    approximate the Fund&#146;s variable rate payment obligation on
    a series of the variable rate preferred shares. In an interest
    rate cap, the Fund would pay a premium to the counterparty to
    the interest rate cap and, to the extent that a specified
    variable rate index exceeds a predetermined fixed rate, would
    receive from the counterparty payments of the difference based
    on the notional amount of such cap. Interest rate swap and cap
    transactions introduce additional risk because the Fund would
    remain obligated to pay preferred share dividends or
    distributions when due in accordance with the
    Articles&#160;Supplementary of the relevant series of the
    variable rate preferred shares even if the counterparty
    defaulted. Depending on the general state of short-term interest
    rates and the returns on the Fund&#146;s portfolio securities at
    that point in time, such a default could negatively affect the
    Fund&#146;s ability to make dividend or distribution payments on
    the variable rate preferred shares. In addition, at the time an
    interest rate swap or cap transaction reaches its scheduled
    termination date, there is a risk that the Fund will not be able
    to obtain a replacement transaction or that the terms of the
    replacement will not be as favorable as on the expiring
    transaction. If this occurs, it could have a negative impact on
    the Fund&#146;s ability to make dividend or distribution
    payments on the variable rate preferred shares. To the extent
    there is a decline in interest rates, the value of the interest
    rate swap or cap could decline, resulting in a decline in the
    asset coverage for the variable rate preferred shares. A sudden
    and dramatic decline in interest rates may result in a
    significant decline in the asset coverage. Under the
    Articles&#160;Supplementary for each series of the preferred
    shares, if the Fund fails to maintain the required asset
    coverage on the outstanding preferred shares or fails to comply
    with other covenants, the Fund may, at its option (and in
    certain circumstances will be required to), mandatorily redeem
    some or all of these shares. The Fund generally may redeem the
    auction-rate preferred shares, in whole or in part, at its
    option at any time (usually on a dividend or distribution
    payment date), other than during a non-call period. Such
    redemption would likely result in the Fund seeking to terminate
    early all or a portion of any swap or cap transaction. Early
    termination of a swap could result in a termination payment by
    the Fund to the counterparty, while early termination of a cap
    could result in a termination payment to the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund will usually enter into swaps or caps on a net basis;
    that is, the two payment streams will be netted out in a cash
    settlement on the payment date or dates specified in the
    instrument, with the Fund receiving or paying, as the case may
    be, only the net amount of the two payments. The Fund intends to
    segregate cash or liquid securities having a value at least
    equal to the value of the Fund&#146;s net payment obligations
    under any swap transaction, marked to market daily. The Fund
    does not presently intend to enter into interest rate swap or
    cap transactions relating to the auction-rate preferred shares
    in a notional amount in excess of the outstanding amount of the
    auction-rate preferred shares. The Fund will monitor any such
    swap with a view to ensuring that the Fund remains in compliance
    with all applicable regulatory investment policy and tax
    requirements.
</DIV>
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    <BR>
    38
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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT
    OF THE FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s Board (who, with the Fund&#146;s officers, are
    described in the SAI) has overall responsibility for the
    management of the Fund. The Board decides upon matters of
    general policy and reviews the actions of the Investment
    Adviser, Gabelli Funds, LLC, One Corporate Center, Rye, New York
    <FONT style="white-space: nowrap">10580-1422,</FONT>
    and the
    <FONT style="white-space: nowrap">Sub-Administrator</FONT>
    (as defined below). Pursuant to an investment advisory agreement
    with the Fund, the Investment Adviser, under the supervision of
    the Fund&#146;s Board, provides a continuous investment program
    for the Fund&#146;s portfolio; provides investment research and
    makes and executes recommendations for the purchase and sale of
    securities; and provides all facilities and personnel, including
    officers required for its administrative management and pays the
    compensation of all officers and directors of the Fund who are
    its affiliates. As compensation for its services and the related
    expenses borne by the Investment Adviser, the Fund pays the
    Investment Adviser a fee, computed daily and payable monthly,
    equal, on an annual basis, to 1.00% of the Fund&#146;s average
    daily net assets including the liquidation value of preferred
    shares. Net assets does not include amounts attributable to
    liabilities constituting indebtedness. The Investment Adviser
    will waive the portion of its investment advisory fee
    attributable to an amount of assets of the Fund equal to the
    aggregate stated value of its currently outstanding preferred
    shares for any calendar year in which the net asset value total
    return of the Fund allocable to the common shares, including
    distributions and the advisory fee subject to potential waiver,
    is less than the stated annual dividend rate or corresponding
    swap rate of each particular series of currently outstanding
    preferred shares, prorated during the year such preferred shares
    are issued and the final year they are outstanding. The
    Fund&#146;s total return on the net asset value of the common
    shares is monitored on a monthly basis to assess whether the
    total return on the net asset value of the common shares exceeds
    the stated dividend rate or corresponding swap rate of each
    particular series of currently outstanding preferred shares for
    the period. The test to confirm the accrual of the management
    fee on the assets attributable to each particular series of
    preferred shares is annual. The Fund will accrue for the
    management fee on these assets during the fiscal year if it
    appears probable that the Fund will incur the management fee on
    those additional assets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Investment Adviser</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Gabelli Funds, LLC serves as the Fund&#146;s Investment Adviser
    pursuant to the Advisory Agreement with the Fund. The Investment
    Adviser is a New York limited liability company with principal
    offices located at One Corporate Center, Rye, New York
    <FONT style="white-space: nowrap">10580-1422</FONT>
    and is registered under the Investment Advisers Act. The
    Investment Adviser was organized in 1999 and is the successor to
    Gabelli Funds, Inc., which was organized in 1980. As of
    December&#160;31, 2010, the Investment Adviser acts as
    registered investment adviser to 25 management investment
    companies with aggregate net assets of $18.3&#160;billion. The
    Investment Adviser, together with the other affiliated
    investment advisers noted below had assets under management
    totaling approximately $33.3&#160;billion as of
    December&#160;31, 2010. GAMCO Asset Management Inc., an
    affiliate of the Investment Adviser, acts as investment adviser
    for individuals, pension trusts, profit sharing trusts and
    endowments, and as a
    <FONT style="white-space: nowrap">sub-adviser</FONT>
    to management investment companies having aggregate assets of
    $13.7&#160;billion under management as of December&#160;31,
    2010. Gabelli Securities, Inc., an affiliate of the Investment
    Adviser, acts as investment adviser for investment partnerships
    and entities having aggregate assets of approximately
    $515&#160;million as of December&#160;31, 2010. Teton Advisors,
    Inc., an affiliate of the Investment Adviser, acts as investment
    manager to the GAMCO Westwood Funds and separately managed
    accounts having aggregate assets of approximately
    $820&#160;million under management as of December&#160;31, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser is a wholly-owned subsidiary of GAMCO
    Investors, Inc., a New York corporation, whose Class&#160;A
    Common Stock is traded on the NYSE under the symbol
    &#147;GBL.&#148; Mr.&#160;Mario J. Gabelli may be deemed a
    &#147;controlling person&#148; of the Investment Adviser on the
    basis of his ownership of a majority of the stock of GGCP, Inc.,
    which owns a majority of the capital stock of GAMCO Investors,
    Inc.
</DIV>
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    <BR>
    39
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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    <B><FONT style="font-family: 'Times New Roman', Times">Payment
    of Expenses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser is obligated to pay expenses associated
    with providing the services contemplated by the Advisory
    Agreement, including compensation of and office space for its
    officers and employees connected with investment and economic
    research, trading and investment management and administration
    of the Fund, as well as the fees of all directors of the Fund
    who are affiliated with the Investment Adviser. The Fund pays
    all other expenses incurred in its operation including, among
    other things, expenses for legal and independent
    accountants&#146; services, costs of printing proxies, stock
    certificates and stockholder reports, charges of the custodian,
    any subcustodian and transfer and dividend paying agent,
    expenses in connection with its respective automatic dividend
    reinvestment and voluntary cash purchase plan, SEC fees, fees
    and expenses of unaffiliated directors, accounting and pricing
    costs, including costs of calculating the net asset value of the
    Fund, membership fees in trade associations, fidelity bond
    coverage for its officers and employees, directors&#146; and
    officers&#146; errors and omission insurance coverage, interest,
    brokerage costs, taxes, stock exchange listing fees and
    expenses, expenses of qualifying its stock for sale in various
    states, litigation and other extraordinary or non-recurring
    expenses, and other expenses properly payable by the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition to the fees of the Investment Adviser, the Fund is
    responsible for the payment of all its other expenses incurred
    in the operation of the Fund, which include, among other things,
    expenses for legal and independent accountant&#146;s services,
    stock exchange listing fees, expenses relating to the offering
    of preferred stock, rating agency fees, costs of printing
    proxies, stock certificates and stockholder reports, charges of
    State Street, charges of Computershare, SEC fees, fees and
    expenses of unaffiliated directors, accounting and printing
    costs, the Fund&#146;s pro rata portion of membership fees in
    trade organizations, fidelity bond coverage for the Fund&#146;s
    officers and employees, interest, brokerage costs, taxes,
    expenses of qualifying the Fund for sale in various states,
    expenses of personnel performing stockholder servicing
    functions, litigation and other extraordinary or non-recurring
    expenses and other expenses properly payable by the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A discussion regarding the basis for the Fund&#146;s Board
    approval of the investment advisory agreement with the
    Investment Adviser is available in the Fund&#146;s semi-annual
    report for the year dated June&#160;30, 2010.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Selection
    of Securities Brokers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Advisory Agreement contains provisions relating to the
    selection of securities brokers to effect the portfolio
    transactions of the Fund. Under those provisions, the Investment
    Adviser may (i)&#160;direct Fund portfolio brokerage to
    Gabelli&#160;&#038; Company, Inc. or other broker-dealer
    affiliates of the Investment Adviser and (ii)&#160;pay
    commissions to brokers other than Gabelli&#160;&#038; Company,
    Inc. that are higher than might be charged by another qualified
    broker to obtain brokerage
    <FONT style="white-space: nowrap">and/or</FONT>
    research services considered by the Investment Adviser to be
    useful or desirable for its investment management of the Fund
    <FONT style="white-space: nowrap">and/or</FONT> its
    other advisory accounts or those of any investment adviser
    affiliated with it. The SAI contains further information about
    the Advisory Agreement including a more complete description of
    the advisory and expense arrangements, exculpatory and brokerage
    provisions, as well as information on the brokerage practices of
    the Fund.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Management</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Mr.&#160;Mario J. Gabelli, CFA, is primarily responsible for the
    <FONT style="white-space: nowrap">day-to-day</FONT>
    management of the Fund. Mr.&#160;Gabelli has served as Chairman
    and Chief Executive Officer of GAMCO Investors, Inc. and its
    predecessors since 1976. Mr.&#160;Gabelli is the Chief
    Investment Officer&#151;Value Products for the Investment
    Adviser and GAMCO Asset Management Inc. Mr.&#160;Gabelli serves
    as Portfolio Manager for several funds in the Gabelli fund
    family and is a director of most of the funds in the family.
    Mr.&#160;Gabelli is also the Chief Executive Officer and a
    director of GGCP, Inc., a private company owning the majority of
    the shares of GAMCO Investors, Inc.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The SAI provides additional information about the Portfolio
    Manager&#146;s compensation, other accounts managed by the
    Portfolio Manager, and the Portfolio Manager&#146;s ownership of
    securities of the Fund.
</DIV>
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    <BR>
    40
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Non-Resident
    Directors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Anthonie C. van Ekris, a director of the Fund, resides outside
    the U.S.&#160;and all or a significant portion of his assets are
    located outside the U.S.&#160;Anthonie C. van Ekris does not
    have an authorized agent in the U.S.&#160;to receive service of
    process. As a result, it may not be possible for investors to
    effect service of process within the U.S.&#160;or to enforce
    against any non-resident director in U.S.&#160;courts judgments
    predicated upon civil liability provisions of
    U.S.&#160;securities laws. It may also not be possible to
    enforce against any non-resident director in foreign courts
    judgments of U.S.&#160;courts or liabilities in original actions
    predicated upon civil liability provisions of the U.S.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times"><FONT style="white-space: nowrap">Sub-Administrator</FONT></FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser has entered into a
    <FONT style="white-space: nowrap">sub-administration</FONT>
    agreement with PFPC Inc. (the
    <FONT style="white-space: nowrap">&#147;Sub-Administrator&#148;)</FONT>
    pursuant to which the
    <FONT style="white-space: nowrap">Sub-Administrator</FONT>
    provides certain administrative services necessary for the
    Fund&#146;s operations which do not include the investment and
    portfolio management services provided by the Investment
    Adviser. For these services and the related expenses borne by
    the
    <FONT style="white-space: nowrap">Sub-Administrator,</FONT>
    the Investment Adviser pays a prorated monthly fee at the annual
    rate of 0.0275% of the first $10&#160;billion of the aggregate
    average net assets of the Fund and all other funds advised by
    the Investment Adviser and administered by the
    <FONT style="white-space: nowrap">Sub-Administrator,</FONT>
    0.0125% of the aggregate average net assets exceeding
    $10&#160;billion but less than $15&#160;billion and 0.01% of the
    aggregate average net assets in excess of $15&#160;billion. The
    <FONT style="white-space: nowrap">Sub-Administrator</FONT>
    has its principal office at 760 Moore Road, King of Prussia,
    Pennsylvania 19406.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Regulatory
    Matters</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    On April&#160;24, 2008, the Investment Adviser entered into a
    settlement with the SEC to resolve an inquiry regarding prior
    frequent trading activity in shares of the GAMCO Global Growth
    Fund (the &#147;Global Growth Fund&#148;) by one investor who
    was banned from the Global Growth Fund in August 2002. In the
    administrative settlement order, the SEC found that the
    Investment Adviser had willfully violated Section&#160;206(2) of
    the Advisers Act Section&#160;17(d) of the 1940 Act and
    <FONT style="white-space: nowrap">Rule&#160;17d-1</FONT>
    thereunder, and had willfully aided and abetted and caused
    violations of Section&#160;12(d)(1)(B)(i) of the 1940 Act. Under
    the terms of the settlement, the Investment Adviser, while
    neither admitting nor denying the SEC&#146;s findings and
    allegations, paid $16&#160;million (which included a
    $5&#160;million civil monetary penalty), approximately
    $12.8&#160;million of which is in the process of being paid to
    shareholders of the Global Growth Fund in accordance with a plan
    developed by an independent distribution consultant and approved
    by the independent directors of the Global Growth Fund and
    acceptable to the staff of the SEC, and agreed to cease and
    desist from future violations of the above-referenced federal
    securities laws and rule. The SEC order also noted the
    cooperation that the Investment Adviser had given the staff of
    the SEC during its inquiry. The settlement did not have a
    material adverse impact on the Investment Adviser. On the same
    day, the SEC filed a civil action against the Executive Vice
    President and Chief Operating Officer of the Investment Adviser,
    alleging violations of certain federal securities laws arising
    from the same matter. The officer is also an officer of the
    Fund, the Global Growth Fund and other funds in the
    Gabelli/GAMCO fund complex. The officer denied the allegations
    and is continuing in his positions with the Investment Adviser
    and the funds. The court dismissed certain claims and found that
    the SEC was not entitled to pursue various remedies against the
    officer while leaving one remedy in the event the SEC were able
    to prove violations of law. The court subsequently dismissed
    without prejudice the remaining remedy against the officer,
    which would allow the SEC to appeal the court&#146;s rulings. On
    October&#160;29, 2010, the SEC filed its appeal with the
    U.S.&#160;Court of Appeals for the Second Circuit regarding the
    lower court&#146;s orders. The Investment Adviser currently
    expects that any resolution of the action against the officer
    will not have a material adverse impact on the Investment
    Adviser or its ability to fulfill its obligations under the
    Advisory Agreement.
</DIV>
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    <BR>
    41
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PORTFOLIO
    TRANSACTIONS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Principal transactions are not entered into with affiliates of
    the Fund. However, Gabelli&#160;&#038; Company, Inc., an
    affiliate of the Investment Adviser, may execute portfolio
    transactions on stock exchanges and in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    markets on an agency basis and receive a stated commission
    therefor. For a more detailed discussion of the Fund&#146;s
    brokerage allocation practices, see &#147;Portfolio
    Transactions&#148; in the SAI.
</DIV>

<A name='Y91316110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">DIVIDENDS
    AND DISTRIBUTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may retain for reinvestment, and pay the resulting
    U.S.&#160;federal income taxes on, its net capital gain, if any,
    although the Fund reserves the authority to distribute its net
    capital gain in any year. The Fund has a policy, which the Board
    may change at any time, of paying a minimum annual distribution
    of 8% of the average net asset value of the Fund to common
    shareholders. This policy permits holders of common shares to
    realize a predictable, but not assured, level of cash flow and
    some liquidity periodically with respect to their common shares
    without having to sell shares. <B>A portion of the Fund&#146;s
    distributions on its common shares to date have included or have
    been estimated to include a return of capital. </B>Any return of
    capital that is a component of a distribution is not sourced
    from realized or unrealized profits of the Fund and that portion
    should not be considered by investors as yield or total return
    on their investment in the Fund. Shareholders should not assume
    that a distribution from the Fund is comprised exclusively of
    net profits. The Fund&#146;s current quarterly distribution
    level is set at $0.11 per share in each of the first three
    quarters of the year. The Fund pays an adjusting distribution in
    the fourth quarter of an amount sufficient to pay 8% of the
    average net asset value of the Fund, as of the last day of the
    four preceding calendar quarters, or to satisfy the minimum
    distribution requirements of the Code, whichever is greater.
    Each quarter, the Board reviews the amount of any potential
    distribution and the income, capital gain or capital available.
    The Fund may retain for reinvestment, and pay the resulting
    federal income taxes on, its net capital gain, if any. To avoid
    paying income tax at the corporate level, the Fund distributes
    substantially all of its investment company taxable income and
    has historically distributed net capital gain.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If, for any calendar year, the total distributions exceed
    current and accumulated earnings and profits, the excess will
    generally be treated as a tax-free return of capital up to the
    amount of the shareholder&#146;s tax basis in his shares. The
    amount treated as a tax-free return of capital will reduce a
    shareholder&#146;s tax basis in his shares, thereby increasing
    his potential gain or reducing his potential loss on the sale of
    his shares. Any amounts distributed to a shareholder in excess
    of the basis in the shares will be taxable to the shareholder as
    capital gain. See &#147;Taxation&#148; below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In the event the Fund distributes amounts in excess of its
    current and accumulated earnings and profits, such distributions
    will decrease the Fund&#146;s total assets and, therefore, have
    the likely effect of increasing the Fund&#146;s expense ratio as
    the Fund&#146;s fixed expenses will become a larger percentage
    of the Fund&#146;s average net assets. In addition, in order to
    make such distributions, the Fund may have to sell a portion of
    its investment portfolio at a time when independent investment
    judgment may not dictate such action.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund, along with other registered investment companies
    advised by the Investment Adviser, has obtained an exemption
    from Section&#160;19(b) of the 1940 Act and
    <FONT style="white-space: nowrap">Rule&#160;19b-1</FONT>
    thereunder permitting the Fund to make periodic distributions of
    long-term capital gains provided that the Fund maintains
    distribution policies with respect to the common shares calling
    for periodic distributions in an amount equal to a fixed
    percentage of the Fund&#146;s average net asset value over a
    specified period of time or market price per share of common
    stock at or about the time of distribution or pay-out of a fixed
    dollar amount. If the total distributions required by the
    proposed periodic pay-out policy exceed the Fund&#146;s current
    and accumulated earnings and profits, the excess will be treated
    as a return of capital. If the Fund&#146;s net investment income
    (including net short-term capital gains) and net long-term
    capital gains for any year exceed the amount required to be
    distributed under the periodic pay-out policy, the Fund
    generally intends to pay such excess once a year, but may, in
    its discretion, retain and not distribute net long-term capital
    gains to the extent of such excess. The Fund reserves the right,
    but does not currently intend, to retain for reinvestment and
    pay the resulting U.S.&#160;federal income taxes on the excess
    of its net realized long-term capital gains over its net
    short-term capital losses, if any.
</DIV>
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    <BR>
    42
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='Y91316111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">AUTOMATIC
    DIVIDEND REINVESTMENT AND VOLUNTARY CASH PURCHASE PLAN</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Under the Fund&#146;s automatic dividend reinvestment and
    voluntary cash purchase plan (the &#147;Plan&#148;), a
    shareholder whose common shares are registered in his or her own
    name will have all distributions reinvested automatically by
    Computershare, which is agent under the Plan, unless the
    shareholder elects to receive cash. Distributions with respect
    to shares registered in the name of a broker-dealer or other
    nominee (that is, in &#147;street name&#148;) will be reinvested
    by the broker or nominee in additional shares under the Plan,
    unless the service is not provided by the broker or nominee or
    the shareholder elects to receive distributions in cash. Where
    distributions consist of a return of capital, reinvestment in
    shares of the Fund will constitute a reinvestment of the
    shareholder&#146;s capital and not a reinvestment of any Fund
    profits received by the shareholder. Investors who own common
    shares registered in street name should consult their
    broker-dealers for details regarding reinvestment. All
    distributions to investors who do not participate in the Plan
    will be paid by check mailed directly to the record holder by
    Computershare as dividend disbursing agent.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Enrollment
    in the Plan</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    It is the policy of the Fund to automatically reinvest dividends
    payable to common shareholders. As a &#147;registered&#148;
    shareholder, you automatically become a participant in the
    Fund&#146;s Plan. The Plan authorizes the Fund to credit common
    shares to participants upon an income dividend or a capital
    gains distribution regardless of whether the shares are trading
    at a discount or a premium to net asset value. All distributions
    to shareholders whose shares are registered in their own names
    will be automatically reinvested pursuant to the Plan in
    additional shares of the Fund. Plan participants may send their
    stock certificates to Computershare to be held in their dividend
    reinvestment account. Registered shareholders wishing to receive
    their distributions in cash must submit this request in writing
    to:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Gabelli Convertible and Income Securities Fund&#160;Inc.<BR>
    <FONT style="white-space: nowrap">c/o&#160;Computershare</FONT><BR>
    P.O.&#160;Box&#160;43010<BR>
    Providence, RI
    <FONT style="white-space: nowrap">02940-3010</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Shareholders requesting this cash election must include the
    shareholder&#146;s name and address as they appear on the share
    certificate. Shareholders with additional questions regarding
    the Plan, or requesting a copy of the terms of the Plan may
    contact Computershare at
    <FONT style="white-space: nowrap">(800)&#160;336-6983.</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If your shares are held in the name of a broker, bank, or
    nominee, you should contact such institution. If such
    institution is not participating in the Plan, your account will
    be credited with a cash dividend. In order to participate in the
    Plan through such institution, it may be necessary for you to
    have your shares taken out of &#147;street name&#148; and
    re-registered in your own name. Once registered in your own
    name, your dividends will be automatically reinvested. Certain
    brokers participate in the Plan. Shareholders holding shares in
    &#147;street name&#148; at participating institutions will have
    distributions automatically reinvested. Shareholders wishing a
    cash dividend at such institution must contact their broker to
    make this change.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The number of common shares distributed to participants in the
    Plan in lieu of cash dividends is determined in the following
    manner. Under the Plan, whenever the market price of the
    Fund&#146;s common shares is equal to or exceeds net asset value
    at the time shares are valued for purposes of determining the
    number of shares equivalent to the cash dividends or capital
    gains distribution, participants are issued common shares valued
    at the greater of (i)&#160;the net asset value as most recently
    determined or (ii)&#160;95% of the then current market price of
    the Fund&#146;s common shares. The valuation date is the
    dividend or distribution payment date or, if that date is not a
    NYSE trading day, the next trading day. If the net asset value
    of the common shares at the time of valuation exceeds the market
    price of the common shares, participants will receive shares
    from the Fund valued at market price. If the Fund should declare
    a dividend or capital gains distribution payable only in cash,
    Computershare will buy common shares in the open market, or on
    the NYSE or elsewhere, for the participants&#146; accounts,
    except that Computershare will endeavor to terminate purchases
    in the open market and
</DIV>
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    <BR>
    43
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    cause the Fund to issue shares at net asset value if, following
    the commencement of such purchases, the market value of the
    common shares exceeds the then current net asset value.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The automatic reinvestment of dividends and capital gains
    distributions will not relieve participants of any income tax
    which may be payable on such distributions. A participant in the
    Plan will be treated for federal income tax purposes as having
    received, on a dividend payment date, a dividend or distribution
    in an amount equal to the cash the participant could have
    received instead of shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Voluntary
    Cash Purchase Plan</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Voluntary Cash Purchase Plan is yet another vehicle for our
    shareholders to increase their investment in the Fund. In order
    to participate in the Voluntary Cash Purchase Plan, shareholders
    must have their shares registered in their own name.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Participants in the Voluntary Cash Purchase Plan have the option
    of making additional cash payments to Computershare for
    investments in the Fund&#146;s common shares at the then current
    market price. Shareholders may send an amount from $250 to
    $10,000. Computershare will use these funds to purchase shares
    in the open market on or about the 1st&#160;and 15th&#160;of
    each month. Computershare will charge each shareholder who
    participates $0.75, plus a pro rata share of the brokerage
    commissions. Brokerage charges for such purchases are expected
    to be less than the usual brokerage charge for such
    transactions. It is suggested that any voluntary cash payments
    be sent to Computershare, P.O.&#160;Box&#160;43010, Providence,
    RI
    <FONT style="white-space: nowrap">02940-3010</FONT>
    such that Computershare receives such payments approximately
    10&#160;days before the 1st&#160;and 15th&#160;of the month.
    Funds not received at least five days before the investment date
    shall be held for investment until the next purchase date. A
    payment may be withdrawn without charge if notice is received by
    Computershare at least 48&#160;hours before such payment is to
    be invested.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Shareholders wishing to liquidate shares held at
    Computershare </I>must do so in writing or by telephone. Please
    submit your request to the above mentioned address or telephone
    number. Include in your request your name, address and account
    number. The cost to liquidate shares is $2.50 per transaction as
    well as the brokerage commission incurred. Brokerage charges are
    expected to be less than the usual brokerage charge for such
    transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    For more information regarding the Automatic Dividend
    Reinvestment Plan and Voluntary Cash Purchase Plan, brochures
    are available by calling
    <FONT style="white-space: nowrap">(914)&#160;921-5070</FONT>
    or by writing directly to the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund reserves the right to amend or terminate the Plans as
    applied to any voluntary cash payments made and any dividend or
    distribution paid subsequent to written notice of the change
    sent to the members of the Plan at least 90&#160;days before the
    record date for such dividend or distribution. The Plan also may
    be amended or terminated by Computershare on at least
    90&#160;days&#146; written notice to participants in the Plan.
</DIV>

<A name='Y91316112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF THE SHARES&#160;AND NOTES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>The following is a brief description of the terms of the
    Fund&#146;s common and preferred shares and notes. This
    description does not purport to be complete and is qualified by
    reference to the Fund&#146;s Governing Documents. For complete
    terms of the common and preferred shares, please refer to the
    actual terms of such series, which are set forth in the
    Governing Documents. For complete terms of the notes, please
    refer to the actual terms of such notes, which will be set forth
    in an Indenture relating to such notes (the
    &#147;Indenture&#148;).</I>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund is authorized to issue 999,995,000&#160;shares of
    capital stock, par value $.001 per share, in multiple classes
    and series thereof as determined from time to time by the Board.
    Of the Fund&#146;s 999,995,000&#160;shares of authorized capital
    stock, 998,000,000&#160;shares have been classified by the Board
    as common stock and 1,995,000&#160;shares as preferred stock. As
    of December&#160;31, 2010, 13,377,323 common shares were
    outstanding. The common shares of the Fund are listed on the
    NYSE under the symbol &#147;GCV&#148; and began trading
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    March&#160;31, 1995. The average weekly trading volume of the
    common shares on the NYSE during the period from January&#160;1,
    2011 through March&#160;31, 2011 was 121,323&#160;shares. Each
    share within a particular class or series thereof has equal
    voting, dividend, distribution and liquidation rights. There are
    no conversion or preemptive rights in connection with any
    outstanding shares of the Fund. All shares, when issued in
    accordance with the terms of the offering, will be fully paid
    and non-assessable. The common shares are not redeemable and
    have no preemptive, conversion or cumulative voting rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Offerings of shares require approval by the Fund&#146;s Board.
    Any additional offering of common shares will be subject to the
    requirements of the 1940 Act, which provides that common shares
    may not be issued at a price below the then current net asset
    value, exclusive of sales load, except in connection with an
    offering to existing holders of common shares or with the
    consent of a majority of the Fund&#146;s outstanding voting
    securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s net asset value per share will be reduced
    immediately following the offering of common shares by the
    amount of the offering expenses paid by the Fund. See &#147;Use
    of Proceeds.&#148; Unlike open-end funds, closed-end funds like
    the Fund do not continuously offer shares and do not provide
    daily redemptions. Rather, if a shareholder determines to buy
    additional common shares or sell shares already held, the
    shareholder may do so by trading through a broker on the NYSE or
    otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Shares of closed-end investment companies often trade on an
    exchange at prices lower than net asset value. The Fund&#146;s
    common shares have traded in the market at both premiums and
    discounts from net asset value. Because the market value of the
    common shares may be influenced by such factors as dividend and
    distribution levels (which are in turn affected by expenses),
    dividend and distribution stability, net asset value, market
    liquidity, relative demand for and supply of such shares in the
    market, unrealized gains, general market and economic conditions
    and other factors beyond the control of the Fund, the Fund
    cannot assure you that common shares will trade at a price equal
    to or higher than net asset value in the future. The common
    shares are designed primarily for long-term investors and you
    should not purchase the common shares if you intend to sell them
    soon after purchase.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s common shareholders will vote as a single class
    to elect the Fund&#146;s Board and on additional matters with
    respect to which the 1940 Act, the Fund&#146;s Charter, By-Laws
    or resolutions adopted by the Directors provide for a vote of
    the Fund&#146;s common shareholders. See &#147;Anti-Takeover
    Provisions of the Fund&#146;s Governing Documents.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Book Entry.</I>&#160;&#160;The common shares sold through
    this offering will initially be held in the name of
    Cede&#160;&#038; Co. as nominee for the Depository
    Trust&#160;Company (&#147;DTC&#148;). The Fund will treat
    Cede&#160;&#038; Co. as the holder of record of the common
    shares for all purposes. In accordance with the procedures of
    DTC, however, purchasers of common shares will be deemed the
    beneficial owners of shares purchased for purposes of
    distributions, voting and liquidation rights. Purchasers of
    common shares may obtain registered certificates by contacting
    the transfer agent.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Preferred
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Currently, 1,995,000&#160;shares of the Fund&#146;s 999,995,000
    authorized shares of capital stock have been classified by the
    Board as preferred stock, par value $.001 per share. The terms
    of such preferred shares may be fixed by the Board and would
    materially limit
    <FONT style="white-space: nowrap">and/or</FONT>
    qualify the rights of the holders of the Fund&#146;s common
    shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As of December&#160;31, 2010, the Fund had outstanding
    965,548&#160;shares of Series&#160;B Preferred. The
    Series&#160;B Preferred is listed on the NYSE under the symbol
    &#147;GCV Pr B&#148;. The Fund previously had
    600,000&#160;shares of Series&#160;A Preferred outstanding and
    1,000&#160;shares of Series&#160;C Auction Rate Preferred
    outstanding; however, all 600,000&#160;shares of the
    Series&#160;A Preferred were redeemed by the Fund on
    February&#160;11, 2003, and all 1,000&#160;shares of
    Series&#160;C Auction Rate Preferred were redeemed by the Fund
    on June&#160;25, 2008. Since 2008, most auction-rate preferred
    share auctions have been unable to hold successful auctions and
    holders of such shares have suffered reduced liquidity. A failed
    auction results when there are not enough bidders in the
</DIV>
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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    auction at rates below the maximum rate as prescribed by the
    terms of the auction-rate preferred shares. These failed
    auctions have been an industry wide problem and may continue to
    occur in the future. Any current or potential holder of
    auction-rate preferred shares faces the risk that auctions will
    continue to fail, or will fail again at some point in the
    future, and that he or she may not be able to sell his or her
    shares through the auction process.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the Fund issues additional preferred shares, it will pay
    dividends to the holders of the preferred shares at either a
    fixed rate or a rate that will be reset frequently based on
    short-term interest rates, as described in a Prospectus
    Supplement accompanying each preferred share offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Upon a liquidation, each holder of the preferred shares will be
    entitled to receive out of the assets of the Fund available for
    distribution to shareholders (after payment of claims of the
    Fund&#146;s creditors but before any distributions with respect
    to the Fund&#146;s common shares or any other shares of the Fund
    ranking junior to the preferred shares as to liquidation
    payments) an amount per share equal to such share&#146;s
    liquidation preference plus any accumulated but unpaid
    distributions (whether or not earned or declared, excluding
    interest thereon) to the date of distribution, and such
    shareholders shall be entitled to no further participation in
    any distribution or payment in connection with such liquidation.
    Each series of the preferred shares will rank on a parity with
    any other series of preferred shares of the Fund as to the
    payment of distributions and the distribution of assets upon
    liquidation, and will be junior to the Fund&#146;s obligations
    with respect to any outstanding senior securities representing
    debt. The preferred shares carry one vote per share on all
    matters on which such shares are entitled to vote. The preferred
    shares will, upon issuance, be fully paid and nonassessable and
    will have no preemptive, exchange or conversion rights. The
    Board may by resolution classify or reclassify any authorized
    but unissued capital shares of the Fund from time to time by
    setting or changing the preferences, conversion or other rights,
    voting powers, restrictions, limitations as to distributions or
    terms or conditions of redemption. The Fund will not issue any
    class of shares senior to the preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Rating Agency Guidelines.</I>&#160;&#160;Upon issuance, it is
    expected that any new series of preferred shares will be rated
    &#147;Aaa&#148; by Moody&#146;s
    <FONT style="white-space: nowrap">and/or</FONT>
    &#147;AAA&#148; by S&#038;P. The Fund expects that it will be
    required under Moody&#146;s and S&#038;P guidelines to maintain
    assets having in the aggregate a discounted value at least equal
    to the Basic Maintenance Amount (as defined below) for its
    outstanding preferred shares, with respect to the separate
    guidelines Moody&#146;s and S&#038;P has each established for
    determining discounted value. To the extent any particular
    portfolio holding does not satisfy the applicable rating
    agency&#146;s guidelines, all or a portion of such
    holding&#146;s value will not be included in the calculation of
    discounted value (as defined by such rating agency). The
    Moody&#146;s and S&#038;P guidelines also impose certain
    diversification requirements and industry concentration
    limitations on the Fund&#146;s overall portfolio, and apply
    specified discounts to securities held by the Fund (except
    certain money market securities). The &#147;Basic Maintenance
    Amount&#148; is equal to (i)&#160;the sum of (a)&#160;the
    aggregate liquidation preference of any preferred shares then
    outstanding plus (to the extent not included in the liquidation
    preference of such preferred shares) an amount equal to the
    aggregate accumulated but unpaid distributions (whether or not
    earned or declared) in respect of such preferred shares,
    (b)&#160;the total principal of any debt (plus accrued and
    projected interest), (c)&#160;certain Fund expenses and
    (d)&#160;certain other current liabilities (excluding any unmade
    distributions on the Fund&#146;s common shares) less
    (ii)&#160;the Fund&#146;s (a)&#160;cash and (b)&#160;assets
    consisting of indebtedness which (y)&#160;mature prior to or on
    the date of redemption or repurchase of the preferred shares and
    are U.S.&#160;government securities or evidences of indebtedness
    rated at least &#147;Aaa,&#148;
    <FONT style="white-space: nowrap">&#147;P-1&#148;,</FONT>
    &#147;VMIG-1&#148; or &#147;MIG-1&#148; by Moody&#146;s or
    &#147;AAA&#148;, &#147;S&#038;P -/+&#148; or &#147;A-/+&#148; by
    S&#038;P, and (z)&#160;is held by the Fund for distributions,
    the redemption or repurchase of preferred shares or the
    Fund&#146;s liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the Fund does not cure in a timely manner a failure to
    maintain a discounted value of its portfolio equal to the Basic
    Maintenance Amount in accordance with the requirements of the
    applicable rating agency or agencies then rating the preferred
    shares at the request of the Fund, the Fund may, and in certain
    circumstances will be required to, mandatorily redeem preferred
    shares, as described below under &#147;&#151;Redemption.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may, but is not required to, adopt any modifications to
    the rating agency guidelines that may hereafter be established
    by Moody&#146;s and S&#038;P (or such other rating agency then
    rating the preferred shares at
</DIV>
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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    the request of the Fund). Failure to adopt any such
    modifications, however, may result in a change in the relevant
    rating agency&#146;s ratings or a withdrawal of such ratings
    altogether. In addition, any rating agency providing a rating
    for the preferred shares at the request of the Fund may, at any
    time, change or withdraw any such rating. The Board, without
    further action by the shareholders, may amend, alter, add to or
    repeal certain of the definitions and related provisions that
    have been adopted by the Fund pursuant to the rating agency
    guidelines if the Board determines that such modification is
    necessary to prevent a reduction in rating of the preferred
    shares by Moody&#146;s and S&#038;P, as the case may be, is in
    the best interests of the holders of common shares and is not
    adverse to the holders of preferred shares in view of advice to
    the Fund by Moody&#146;s and S&#038;P (or such other rating
    agency then rating the preferred shares at the request of the
    Fund) that such modification would not adversely affect, as the
    case may be, its then current rating of the preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Board may amend the Articles&#160;Supplementary definition
    of &#147;Maximum Rate&#148; (the &#147;maximum rate&#148; as
    defined below under &#147;&#151;Maximum Rate&#148;) to increase
    the percentage amount by which the applicable reference rate is
    multiplied to determine the maximum rate without the vote or
    consent of the holders of the preferred shares or any other
    shareholder of the Fund, but only after consultation with the
    broker-dealers and with confirmation from each applicable rating
    agency that the Fund could meet applicable rating agency asset
    coverage tests immediately following any such increase.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As described by Moody&#146;s and S&#038;P, the ratings assigned
    to the preferred shares are assessments of the capacity and
    willingness of the Fund to pay the obligations of each of the
    preferred shares. The ratings on the preferred shares are not
    recommendations to purchase, hold or sell shares of either
    series, inasmuch as the ratings do not comment as to market
    price or suitability for a particular investor. The rating
    agency guidelines also do not address the likelihood that an
    owner of preferred shares will be able to sell such shares on an
    exchange, in an auction or otherwise. The ratings are based on
    current information furnished to Moody&#146;s and S&#038;P by
    the Fund and the Investment Adviser and information obtained
    from other sources. The ratings may be changed, suspended or
    withdrawn as a result of changes in, or the unavailability of,
    such information.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The rating agency guidelines will apply to the preferred shares,
    as the case may be, only so long as such rating agency is rating
    such shares at the request of the Fund. The Fund will pay fees
    to Moody&#146;s and S&#038;P for rating the preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Asset Maintenance Requirements.</I>&#160;&#160;In addition to
    the requirements summarized under &#147;&#151;Rating Agency
    Guidelines&#148; above, the Fund must also satisfy asset
    maintenance requirements under the 1940 Act with respect to its
    preferred shares. Under the 1940 Act, such debt or preferred
    shares may be issued only if immediately after such issuance the
    value of the Fund&#146;s total assets (less ordinary course
    liabilities) is at least 300% of the amount of any debt
    outstanding and at least 200% of the amount of any preferred
    shares and debt outstanding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund will be required under the preferred shares&#146;
    Articles&#160;Supplementary (the
    &#147;Articles&#160;Supplementary&#148;) to determine whether it
    has, as of the last business day of each March, June, September
    and December of each year, an &#147;asset coverage&#148; (as
    defined in the 1940 Act) of at least 200% (or such higher or
    lower percentage as may be required at the time under the 1940
    Act) with respect to all outstanding senior securities of the
    Fund that are debt or stock, including any outstanding preferred
    shares. If the Fund fails to maintain the asset coverage
    required under the 1940 Act on such dates and such failure is
    not cured within 60 calendar days, the Fund may, and in certain
    circumstances will be required to, mandatorily redeem the number
    of preferred shares sufficient to satisfy such asset coverage.
    See &#147;&#151;Redemption&#148; below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Distributions.</I>&#160;&#160;In connection with the offering
    of one or more series of preferred shares, an accompanying
    Prospectus Supplement will specify whether dividends on such
    preferred shares will be based on a fixed or variable rate. If
    such Prospectus Supplement specifies that dividends will be paid
    at a fixed rate (&#147;Fixed Rate Preferred Shares&#148;),
    holders of such preferred shares will be entitled to receive,
    when, as and if declared by the Board, out of funds legally
    available therefor, cumulative cash distributions, at an annual
    rate set forth in the applicable Prospectus Supplement, payable
    with such frequency as set forth in the applicable Prospectus
    Supplement. Such distributions will accumulate from the date on
    which such shares are issued.
</DIV>
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    <BR>
    47
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In the alternative, the Prospectus Supplement may state that the
    holders of one or more series of the preferred shares are
    entitled to receive cash distributions at annual rates stated as
    a percentage of liquidation preference, that will vary from
    dividend period to dividend period (&#147;Variable Rate
    Preferred Shares&#148;). The liquidation preference per share
    and the dividend rate for the initial dividend period for any
    such series of preferred shares will be the rate set out in the
    Prospectus Supplement for such series. For subsequent dividend
    periods, each such series of preferred shares will pay
    distributions based on a rate set at an auction, normally held
    weekly, but not in excess of a maximum rate. Dividend periods
    generally will be seven days, and the dividend periods generally
    will begin on the first business day after an auction. In most
    instances, distributions are also paid weekly, on the business
    day following the end of the dividend period. The Fund, subject
    to some limitations, may change the length of the dividend
    periods, designating them as &#147;special dividend
    periods,&#148; as described below under &#147;&#151;Designation
    of Special Dividend Periods&#148;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Distribution Payments.</I>&#160;&#160;Except as described
    below, the dividend payment date for a series of Variable Rate
    Preferred Shares will be the first business day after the
    dividend period ends. The dividend payment dates for special
    dividend periods of more (or less) than seven days will be set
    out in the notice designating a special dividend period. See
    &#147;&#151;Designation of Special Dividend Periods&#148; for a
    discussion of payment dates for a special dividend period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If a dividend payment date for a series of Variable Rate
    Preferred Shares is not a business day because the NYSE is
    closed for business for more than three consecutive business
    days due to an act of God, natural disaster, act of war, civil
    or military disturbance, act of terrorism, sabotage, riots or a
    loss or malfunction of utilities or communications services, or
    the dividend payable on such date can not be paid for any such
    reason, then:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the dividend payment date for the affected dividend period will
    be the next business day on which the Fund and its paying agent,
    if any, are able to cause the distributions to be paid using
    their reasonable best efforts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the affected dividend period will end on the day it would have
    ended had such event not occurred and the dividend payment date
    had remained the scheduled date;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the next dividend period will begin and end on the dates on
    which it would have begun and ended had such event not occurred
    and the dividend payment date remained the scheduled date.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Determination of Dividend Rates.</I>&#160;&#160;The Fund
    computes the distributions per share for a series of Variable
    Rate Preferred Shares by multiplying the applicable rate
    determined at the auction by a fraction, the numerator of which
    normally is the number of days in such dividend period and the
    denominator of which is 360. This applicable rate is then
    multiplied by the liquidation preference per share of such
    series to arrive at the distribution per share.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Maximum Rate.</I>&#160;&#160;The dividend rate for a series
    of Variable Rate Preferred Shares that results from an auction
    for such shares will not be greater than the applicable
    &#147;maximum rate.&#148; The maximum rate for any standard
    dividend period will be the applicable percentage of the
    reference rate. The reference rate will be the applicable LIBOR
    Rate (as defined below) for a dividend period of fewer than
    365&#160;days or the Treasury Index Rate (as defined below) for
    a dividend period of 365&#160;days or more. The applicable
    percentage will be determined based on the lower of the credit
    ratings assigned to such series of preferred shares by
    Moody&#146;s and S&#038;P on the auction date for such period
    (as set forth in the table below). If Moody&#146;s
    <FONT style="white-space: nowrap">and/or</FONT>
    S&#038;P do not make such rating available, the rate will be
    determined by reference to equivalent ratings issued by a
    substitute rating agency. In the case of a special dividend
    period, (1)&#160;the Fund will communicate the maximum
    applicable rate in a notice of special rate period for such
    dividend payment period, (2)&#160;the applicable percentage will
    be determined on the date two business days before the first day
    of such special dividend period and (3)&#160;the reference rate
    will be the applicable LIBOR Rate for a dividend period of fewer
    than 365&#160;days or the Treasury Index Rate for a dividend
    period of 365&#160;days or more.
</DIV>
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    <BR>
    48
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The &#147;LIBOR Rate,&#148; as described in greater detail in
    the Articles&#160;Supplementary, is the applicable London
    Inter-Bank Offered Rate for deposits in U.S.&#160;dollars for
    the period most closely approximating the applicable dividend
    period for the preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The &#147;Treasury Index Rate,&#148; as described in greater
    detail in the Articles&#160;Supplementary, is the average yield
    to maturity for certain U.S.&#160;Treasury securities having
    substantially the same length to maturity as the applicable
    dividend period for the preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="15%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="15%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Credit Ratings</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Applicable<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Moody&#146;s</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>S&#038;P</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percentage</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Aa3 or higher
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    AA- or higher
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    150%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    A3 to A1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    A- to A+
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    175%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Baa3 to Baa1
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="bottom">
    BBB- to BBB+
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    250%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Below Baa3
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    Below BBB-
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    275%
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    There is no minimum dividend rate in respect of any dividend
    period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Effect of Failure to Pay Distributions in a Timely
    Manner.</I>&#160;&#160;If the Fund fails to pay the paying agent
    the full amount of any distribution or redemption price, as
    applicable, for a series of Variable Rate Preferred Shares in a
    timely manner, the dividend rate for the dividend period
    following such a failure to pay (such period referred to as the
    default period) and any subsequent dividend period for which
    such default is continuing will be the default rate. In the
    event that the Fund fully pays all default amounts due during a
    dividend period, the dividend rate for the remainder of that
    dividend period will be, as the case may be, the applicable rate
    (for the first dividend period following a dividend default) or
    the then maximum rate (for any subsequent dividend period for
    which such default is continuing).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The default rate is 550% of the applicable LIBOR Rate for a
    dividend period of 364&#160;days or fewer and 550% of the
    applicable Treasury Index Rate for a dividend period of longer
    than 364&#160;days.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Designation of Special Dividend Periods.</I>&#160;&#160;The
    Fund may instruct the auction agent to hold auctions more or
    less frequently than weekly and may designate dividend periods
    longer or shorter than one week. The Fund may do this if, for
    example, the Fund expects that short-term rates might increase
    or market conditions otherwise change, in an effort to optimize
    the potential benefit of the Fund&#146;s leverage for holders of
    its common shares. The Fund does not currently expect to hold
    auctions and pay distributions less frequently than weekly or
    establish dividend periods longer or shorter than one week. If
    the Fund designates a special dividend period, changes in
    interest rates could affect the price received if preferred
    shares are sold in the secondary market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any designation of a special dividend period for a series of
    Variable Rate Preferred Shares will be effective only if
    (i)&#160;notice thereof has been given as provided for in the
    governing documents, (ii)&#160;any failure to pay in a timely
    manner to the auction agent the full amount of any distribution
    on, or the redemption price of, any preferred shares has been
    cured as provided for in the governing documents, (iii)&#160;the
    auction immediately preceding the special dividend period was
    not a failed auction, (iv)&#160;if the Fund has mailed a notice
    of redemption with respect to any preferred shares, the Fund has
    deposited with the paying agent all funds necessary for such
    redemption and (v)&#160;the Fund has confirmed that as of the
    auction date next preceding the first day of such special
    dividend period, it has assets with an aggregate discounted
    value at least equal to the Basic Maintenance Amount, and the
    Fund has provided notice of such designation and a Basic
    Maintenance Report to each rating agency then rating the
    preferred shares at the request of the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The dividend payment date for any such special dividend period
    will be set out in the notice designating the special dividend
    period. In addition, for special dividend periods of at least
    91&#160;days, dividend payment dates will occur on the first
    business day of each calendar month within such dividend period
    and on the business day following the last day of such dividend
    period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Before the Fund designates a special dividend period:
    (i)&#160;at least seven business days (or two business days in
    the event the duration of the dividend period prior to such
    special dividend period is less than eight
</DIV>
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    <BR>
    49
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    days) and not more than 30 business days before the first day of
    the proposed special dividend period, the Fund will issue a
    press release stating its intention to designate a special
    dividend period and inform the auction agent of the proposed
    special dividend period by telephonic or other means and confirm
    it in writing promptly thereafter and (ii)&#160;the Fund must
    inform the auction agent of the proposed special dividend period
    by 3:00&#160;p.m., New York City time on the second business day
    before the first day of the proposed special dividend period.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Restrictions
    on Dividends and Other Distributions for the Preferred
    Shares.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    So long as any preferred shares are outstanding, the Fund may
    not pay any dividend or distribution (other than a dividend or
    distribution paid in common shares or in options, warrants or
    rights to subscribe for or purchase common shares) in respect of
    the common shares or call for redemption, redeem, purchase or
    otherwise acquire for consideration any common shares (except by
    conversion into or exchange for shares of the Fund ranking
    junior to the preferred shares as to the payment of dividends
    and the distribution of assets upon liquidation), unless:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Fund has declared and paid (or provided to the relevant
    dividend paying agent) all cumulative distributions on the
    Fund&#146;s outstanding preferred shares due on or prior to the
    date of such common share dividend or distribution;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Fund has redeemed the full number of preferred shares to be
    redeemed pursuant to any mandatory redemption provision in the
    Fund&#146;s governing documents;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    after making the distribution, the Fund meets applicable asset
    coverage requirements described under &#147;&#151;Rating Agency
    Guidelines&#148; and &#147;&#151;Asset Maintenance
    Requirements.&#148;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    No full distribution will be declared or made on any series of
    the preferred shares for any dividend period, or part thereof,
    unless full cumulative distributions due through the most recent
    dividend payment dates therefor for all outstanding series of
    preferred shares of the Fund ranking on a parity with such
    series as to distributions have been or contemporaneously are
    declared and made. If full cumulative distributions due have not
    been made on all outstanding preferred shares of the Fund
    ranking on a parity with such series of preferred shares as to
    the payment of distributions, any distributions being paid on
    the preferred shares will be paid as nearly pro rata as possible
    in proportion to the respective amounts of distributions
    accumulated but unmade on each such series of preferred shares
    on the relevant dividend payment date. The Fund&#146;s
    obligation to make distributions on the preferred shares will be
    subordinate to its obligations to pay interest and principal,
    when due, on any of the Fund&#146;s senior securities
    representing debt.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Mandatory Redemption&#160;Relating to Asset Coverage
    Requirements.</I>&#160;&#160;The Fund may, at its option,
    consistent with its Governing Documents and the 1940 Act, and in
    certain circumstances will be required to, mandatorily redeem
    preferred shares in the event that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Fund fails to maintain the asset coverage requirements
    specified under the 1940 Act on a quarterly valuation date and
    such failure is not cured on or before 60&#160;days, in the case
    of the Fixed Rate Preferred Shares, or 10 business days, in the
    case of the Variable Rate Preferred Shares, following such
    failure;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Fund fails to maintain the asset coverage requirements as
    calculated in accordance with the applicable rating agency
    guidelines as of any monthly valuation date, and such failure is
    not cured on or before 10 business days after such valuation
    date.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The redemption price for preferred shares subject to mandatory
    redemption will be the liquidation preference, as stated in the
    Prospectus Supplement accompanying the issuance of such
    preferred shares, plus an amount equal to any accumulated but
    unpaid distributions (whether or not earned or declared) to the
    date fixed for redemption, plus (in the case of Variable Rate
    Preferred Shares having a dividend period of more than one year)
    any applicable redemption premium determined by the Board and
    included in the Articles&#160;Supplementary.
</DIV>
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    <BR>
    50
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The number of preferred shares that will be redeemed in the case
    of a mandatory redemption will equal the minimum number of
    outstanding preferred shares, the redemption of which, if such
    redemption had occurred immediately prior to the opening of
    business on the applicable cure date, would have resulted in the
    relevant asset coverage requirement having been met or, if the
    required asset coverage cannot be so restored, all of the
    preferred shares. In the event that preferred shares are
    redeemed due to a failure to satisfy the 1940&#160;Act asset
    coverage requirements, the Fund may, but is not required to,
    redeem a sufficient number of preferred shares so that the
    Fund&#146;s assets exceed the asset coverage requirements under
    the 1940 Act after the redemption by 10% (that is, 220% asset
    coverage). In the event that preferred shares are redeemed due
    to a failure to satisfy applicable rating agency guidelines, the
    Fund may, but is not required to, redeem a sufficient number of
    preferred shares so that the Fund&#146;s discounted portfolio
    value (as determined in accordance with the applicable rating
    agency guidelines) after redemption exceeds the asset coverage
    requirements of each applicable rating agency by up to 10% (that
    is, 110% rating agency asset coverage). In addition, as
    discussed under &#147;&#151;Optional Redemption of Variable Rate
    Preferred Shares&#148; below, the Fund generally may redeem
    Variable Rate Preferred Shares subject to a variable rate, in
    whole or in part, at its option at any time (usually on a
    dividend or distribution payment date), other than during a
    non-call period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the Fund does not have funds legally available for the
    redemption of, or is otherwise unable to redeem, all the
    preferred shares to be redeemed on any redemption date, the Fund
    will redeem on such redemption date that number of shares for
    which it has legally available funds, or is otherwise able to
    redeem, from the holders whose shares are to be redeemed ratably
    on the basis of the redemption price of such shares, and the
    remainder of those shares to be redeemed will be redeemed on the
    earliest practicable date on which the Fund will have funds
    legally available for the redemption of, or is otherwise able to
    redeem, such shares upon written notice of redemption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If fewer than all of the Fund&#146;s outstanding preferred
    shares are to be redeemed, the Fund, at its discretion and
    subject to the limitations of its Governing Documents and the
    1940 Act, will select the one or more series of preferred shares
    from which shares will be redeemed and the amount of preferred
    shares to be redeemed from each such series. If less than all
    preferred shares of a series are to be redeemed, such redemption
    will be made as among the holders of that series pro rata in
    accordance with the respective number of shares of such series
    held by each such holder on the record date for such redemption
    (or by such other equitable method as the Fund may determine).
    If fewer than all the preferred shares held by any holder are to
    be redeemed, the notice of redemption mailed to such holder will
    specify the number of shares to be redeemed from such holder,
    which may be expressed as a percentage of shares held on the
    applicable record date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Optional Redemption of Fixed Rate Preferred
    Shares.</I>&#160;&#160;Fixed Rate Preferred Shares will not be
    subject to optional redemption by the Fund until the date, if
    any, specified in the applicable Prospectus Supplement, unless
    such redemption is necessary, in the judgment of the Fund, to
    maintain the Fund&#146;s status as a regulated investment
    company under the Code. Commencing on such date and thereafter,
    the Fund may at any time redeem such Fixed Rate Preferred Shares
    in whole or in part for cash at a redemption price per share
    equal to the initial liquidation preference per share plus
    accumulated and unpaid distributions (whether or not earned or
    declared) to the redemption date. Such redemptions are subject
    to the notice requirements set forth under
    &#147;&#151;Redemption&#160;Procedures&#148; and the limitations
    of the Governing Documents and 1940 Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Optional Redemption of Variable Rate Preferred
    Shares.</I>&#160;&#160;The Fund generally may redeem Variable
    Rate Preferred Shares, if issued, in whole or in part, at its
    option at any time (usually on a dividend or distribution
    payment date), other than during a non-call period. The Fund may
    designate a non-call period during a dividend period of more
    than seven days. In the case of such preferred shares having a
    dividend period of one year or less, the redemption price per
    share will equal the initial liquidation preference plus an
    amount equal to any accumulated but unpaid distributions thereon
    (whether or not earned or declared) to the redemption date, and
    in the case of such preferred shares having a dividend period of
    more than one year, the redemption price per share will equal
    the initial liquidation preference plus any redemption premium
    applicable during such dividend period. Such redemptions are
    subject to the notice requirements set forth under
    &#147;&#151;Redemption&#160;Procedures&#148; and the limitations
    of the Governing Documents and 1940 Act.
</DIV>
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    51
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Redemption&#160;Procedures.</I>&#160;&#160;A notice of
    redemption with respect to an optional redemption will be given
    to the holders of record of preferred shares selected for
    redemption not less than 15&#160;days (subject to NYSE
    requirements), in the case of Fixed Rate Preferred Shares, and
    not less than seven days in the case of Variable Rate Preferred
    Shares, nor, in both cases, more than 40&#160;days prior to the
    date fixed for redemption. Preferred shareholders may receive
    shorter notice in the event of a mandatory redemption. Each
    notice of redemption will state (i)&#160;the redemption date,
    (ii)&#160;the number or percentage of preferred shares to be
    redeemed (which may be expressed as a percentage of such shares
    outstanding), (iii)&#160;the CUSIP number(s) of such shares,
    (iv)&#160;the redemption price (specifying the amount of
    accumulated distributions to be included therein), (v)&#160;the
    place or places where such shares are to be redeemed,
    (vi)&#160;that distributions on the shares to be redeemed will
    cease to accumulate on such redemption date, (vii)&#160;the
    provision of the Articles&#160;Supplementary, as applicable,
    under which the redemption is being made and (viii)&#160;any
    conditions precedent to such redemption. No defect in the notice
    of redemption or in the mailing thereof will affect the validity
    of the redemption proceedings, except as required by applicable
    law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The holders of any preferred shares, whether subject to a
    variable or fixed rate, will not have the right to redeem any of
    their shares at their option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Liquidation Preference.</I>&#160;&#160;In the event of any
    voluntary or involuntary liquidation, dissolution or winding up
    of the affairs of the Fund, the holders of preferred shares will
    be entitled to receive a preferential liquidating distribution,
    which is expected to equal the original purchase price per
    preferred share plus accumulated and unpaid dividends, whether
    or not declared, before any distribution of assets is made to
    holders of common shares. After payment of the full amount of
    the liquidating distribution to which they are entitled, the
    holders of preferred shares will not be entitled to any further
    participation in any distribution of assets by the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Voting Rights.</I>&#160;&#160;The 1940 Act requires that the
    holders of any preferred shares, voting separately as a single
    class, have the right to elect at least two Directors at all
    times. The remaining Directors will be elected by holders of
    common shares and preferred shares, voting together as a single
    class. In addition, subject to the prior rights, if any, of the
    holders of any other class of senior securities outstanding, the
    holders of any preferred shares have the right to elect a
    majority of the Directors at any time two years&#146; dividends
    on any preferred shares are unpaid. The 1940 Act also requires
    that, in addition to any approval by shareholders that might
    otherwise be required, the approval of the holders of a majority
    of any outstanding preferred shares, voting separately as a
    class, would be required to (i)&#160;adopt any plan of
    reorganization that would adversely affect the preferred shares,
    and (ii)&#160;take any action requiring a vote of security
    holders under Section&#160;13(a) of the 1940 Act, including,
    among other things, changes in the Fund&#146;s subclassification
    as a closed-end investment company to an open-end company or
    changes in its fundamental investment restrictions. As a result
    of these voting rights, the Fund&#146;s ability to take any such
    actions may be impeded to the extent that there are any
    preferred shares outstanding. The Board presently intends that,
    except as otherwise indicated in this Prospectus and except as
    otherwise required by applicable law, holders of preferred
    shares will have equal voting rights with holders of common
    shares (one vote per share, unless otherwise required by the
    1940 Act) and will vote together with holders of common shares
    as a single class.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The affirmative vote of the holders of a majority of the
    outstanding preferred shares, voting as a separate class, will
    be required to amend, alter or repeal any of the preferences,
    rights or powers of holders of preferred shares so as to affect
    materially and adversely such preferences, rights or powers, or
    to increase or decrease the authorized number of preferred
    shares. The class vote of holders of preferred shares described
    above will in each case be in addition to any other vote
    required to authorize the action in question.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The foregoing voting provisions will not apply to any preferred
    shares if, at or prior to the time when the act with respect to
    which such vote otherwise would be required will be effected,
    such shares will have been redeemed or called for redemption and
    sufficient cash or cash equivalents provided to the applicable
    paying agent to effect such redemption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Book Entry.</I>&#160;&#160;Fixed Rate Preferred Shares will
    initially be held in the name of Cede&#160;&#038; Co. as nominee
    for DTC. The Fund will treat Cede&#160;&#038; Co. as the holder
    of record of preferred shares for all purposes. In
</DIV>
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    <BR>
    52
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    accordance with the procedures of DTC, however, purchasers of
    Fixed Rate Preferred Shares will be deemed the beneficial owners
    of stock purchased for purposes of dividends, voting and
    liquidation rights.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any future series of Variable Rate Preferred Shares will
    initially be held by the auction agent as custodian for
    Cede&#160;&#038; Co., in whose name the Variable Rate Preferred
    Shares will be registered. The Fund will treat Cede&#160;&#038;
    Co. as the holder of record of the Variable Rate Preferred
    Shares for all purposes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Notes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>General.</I>&#160;&#160;Under Maryland law and our Charter,
    we may borrow money without prior approval of holders of common
    and preferred shares. We may issue debt securities, including
    notes, or other evidence of indebtedness and may secure any such
    notes or borrowings by mortgaging, pledging or otherwise
    subjecting as security our assets to the extent permitted by the
    1940 Act or rating agency guidelines. Any borrowings, including
    without limitation the notes, will rank senior to the preferred
    shares and the common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Under the 1940 Act, we may only issue one class of senior
    securities representing indebtedness, which in the aggregate,
    must have asset coverage immediately after the time of issuance
    of at least 300%. So long as notes are outstanding, additional
    debt securities must rank on a parity with notes with respect to
    the payment of interest and upon the distribution of our assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A prospectus supplement relating to any notes will include
    specific terms relating to the offering. The terms to be stated
    in a prospectus <I>supplement </I>will include the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the form and title of the security;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the aggregate principal amount of the securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the interest rate of the securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    whether the interest rate for the securities will be determined
    by auction or remarketings;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the maturity dates on which the principal of the securities will
    be payable;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the frequency with which auctions or remarketings, if any, will
    be held;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any changes to or additional events of default or covenants;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any optional or mandatory redemption provisions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the credit rating of the notes;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other terms of the securities.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Interest.</I>&#160;&#160;The prospectus supplement will
    describe the interest payment provisions relating to notes.
    Interest on notes will be payable when due as described in the
    related prospectus supplement. If we do not pay interest when
    due, it will trigger an event of default and we will be
    restricted from declaring dividends and making other
    distributions with respect to our common shares and preferred
    shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Limitations.</I>&#160;&#160;Under the requirements of the
    1940 Act, immediately after issuing any senior securities
    representing indebtedness, we must have an asset coverage of at
    least 300%. Asset coverage means the ratio which the value of
    our total assets, less all liabilities and indebtedness not
    represented by senior securities, bears to the aggregate amount
    of senior securities representing indebtedness. Other types of
    borrowings also may result in our being subject to similar
    covenants in credit agreements.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Events of
    Default and Acceleration of Maturity of Notes.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Unless <I>stated </I>otherwise in the related Prospectus
    Supplement, any one of the following events will constitute an
    &#147;event of default&#148; for that series under the Indenture
    relating to the notes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    default in the payment of any interest upon a series of notes
    when it becomes due and payable and the continuance of such
    default for 30&#160;days;
</TD>
</TR>

</TABLE>
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    <BR>
    53
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    default in the payment of the principal of, or premium on, a
    series of notes at its stated maturity;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    default in the performance, or breach, of any covenant or
    warranty of ours in the Indenture, and continuance of such
    default or breach for a period of 90&#160;days after written
    notice has been given to us by the trustee;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    certain voluntary or involuntary proceedings involving us and
    relating to bankruptcy, insolvency or other similar laws;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    if, on the last business day of each of twenty-four consecutive
    calendar months, the notes have a 1940&#160;Act asset coverage
    of less than 100%;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    any other &#147;event of default&#148; provided with respect to
    a series, including a default in the payment of any redemption
    price payable on the redemption date.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Upon the occurrence and continuance of an event of default, the
    holders of a majority in principal amount of a series of
    outstanding notes or the trustee will be able to declare the
    principal amount of that series of notes immediately due and
    payable upon written notice to us. A default that relates only
    to one series of notes does not affect any other series and the
    holders of such other series of notes will not be entitled to
    receive notice of such a default under the Indenture. Upon an
    event of default relating to bankruptcy, insolvency or other
    similar laws, acceleration of maturity will occur automatically
    with respect to all series. At any time after a declaration of
    acceleration with respect to a series of notes has been made,
    and before a judgment or decree for payment of the money due has
    been obtained, the holders of a majority in principal amount of
    the outstanding notes of that series, by written notice to us
    and the trustee, may rescind and annul the declaration of
    acceleration and its consequences if all events of default with
    respect to that series of notes, other than the non-payment of
    the principal of that series of notes which has become due
    solely by such declaration of acceleration, have been cured or
    waived and other conditions have been met.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Liquidation Rights.</I>&#160;&#160;In the event of
    (a)&#160;any insolvency or bankruptcy case or proceeding, or any
    receivership, liquidation, reorganization or other similar case
    or proceeding in connection therewith, relative to us or to our
    creditors, as such, or to our assets, or (b)&#160;any
    liquidation, dissolution or other winding up of us, whether
    voluntary or involuntary and whether or not involving insolvency
    or bankruptcy, or (c)&#160;any assignment for the benefit of
    creditors or any other marshalling of assets and liabilities of
    ours, then (after any payments with respect to any secured
    creditor of ours outstanding at such time) and in any such event
    the holders of notes shall be entitled to <I>receive </I>payment
    in full of all amounts due or to become due on or in respect of
    all notes (including any interest accruing thereon after the
    commencement of any such case or proceeding), or provision shall
    be made for such payment in cash or cash equivalents or
    otherwise in a manner satisfactory to the holders of the notes,
    before the holders of any of our common or preferred shares are
    entitled to receive any payment on account of any redemption
    proceeds, liquidation preference or dividends from such shares.
    The holders of notes shall be entitled to receive, for
    application to the payment thereof, any payment or distribution
    of any kind or character, whether in cash, property or
    securities, including any such payment or distribution which may
    be payable or deliverable by reason of the payment of any other
    indebtedness of ours being subordinated to the payment of the
    notes, which may be payable or deliverable in respect of the
    notes in any such case, proceeding, dissolution, liquidation or
    other winding up event.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Unsecured creditors of ours may include, without limitation,
    service providers including our Investment Adviser, custodian,
    administrator, auction agent, broker-dealers and the trustee,
    pursuant to the terms of various contracts with us. Secured
    creditors of ours may include without limitation parties
    entering into any interest rate swap, floor or cap transactions,
    or other similar transactions with us that create liens,
    pledges, charges, security interests, security agreements or
    other encumbrances on our assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A consolidation, reorganization or merger of us with or into any
    other company, or a sale, lease or exchange of all or
    substantially all of our assets in consideration for the
    issuance of equity securities of another company shall not be
    deemed to be a liquidation, dissolution or winding up of us.
</DIV>
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    <BR>
    54
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Voting Rights.</I>&#160;&#160;The notes have no voting
    rights, except as mentioned below and to the extent required by
    law or as otherwise provided in the Indenture relating to the
    acceleration of maturity upon the occurrence and continuance of
    an event of default. In connection <I>with </I>the notes or
    other borrowings (if any), the 1940 Act does in certain
    circumstances grant to the noteholders or lenders certain voting
    rights in the event of default in the payment of interest on or
    repayment of principal. In the event the Fund fails to maintain
    100% asset coverage of any notes outstanding, the holders of the
    notes will have the right to elect a majority of the Fund&#146;s
    directors.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Market.</I>&#160;&#160;Our notes are not likely to be listed
    on an exchange or automated quotation system. The details on how
    to buy and sell such notes, along with the other terms of the
    notes, will be described in a Prospectus Supplement. We cannot
    assure you that any market will exist for our notes or if a
    market does exist, whether it will provide holders with
    liquidity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Book-Entry, Delivery and Form.</I>&#160;&#160;Unless
    otherwise stated in the related Prospectus Supplement, the notes
    will be issued in book-entry form and will be represented by one
    or more notes in registered global form. The global notes will
    be deposited with the trustee as custodian for DTC and
    registered in the name of Cede&#160;&#038; Co., as nominee of
    DTC. DTC will maintain the notes in designated denominations
    through its book-entry facilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Under the terms of the Indenture, we and the trustee may treat
    the persons in whose names any notes, including the global
    notes, are registered as the owners thereof for the purpose of
    receiving payments and for any and all other purposes
    whatsoever. Therefore, so long as DTC or its nominee is the
    registered owner of the global notes, DTC or such nominee will
    be considered the sole holder of outstanding notes under the
    Indenture. We or the trustee may give effect to any written
    certification, proxy or other authorization furnished by DTC or
    its nominee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A global note may not be transferred except as a whole by DTC,
    its successors or their respective nominees. Interests of
    beneficial owners in the global note may be transferred or
    exchanged for definitive securities in accordance with the rules
    and procedures of DTC. In addition, a global note may be
    exchangeable for notes in definitive form if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    DTC notifies us that it is unwilling or unable to continue as a
    depository and we do not appoint a successor within 60&#160;days;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    we, at our option, notify the trustee in writing that we elect
    to cause the issuance of notes in definitive form under the
    Indenture;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    an event of default has occurred and is continuing.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In each instance, upon surrender by DTC or its nominee of the
    global note, notes in definitive form will be issued to each
    person that DTC or its nominee identifies as being the
    beneficial owner of the related notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Under the Indenture, the holder of any global note may grant
    proxies and otherwise authorize any person, including its
    participants and persons who may hold interests through DTC
    participants, to take any action which a holder is entitled to
    take under the Indenture.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Trustee, Transfer Agent, Registrar, Paying Agent and
    Redemption&#160;Agent.</I>&#160;&#160;Information regarding the
    trustee under the Indenture, which may also act as transfer
    agent, registrar, paying agent and redemption agent with respect
    to our notes, will be set forth in the related prospectus
    supplement.
</DIV>
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    <BR>
    55
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Outstanding
    Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following information regarding the Fund&#146;s authorized
    shares is as of March&#160;31, 2011.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="59%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Amount<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Outstanding<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Amount Held<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exclusive of<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Amount<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>by Fund or<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Amount Held<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title of Class</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Authorized</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>for its Account</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>by Fund</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Common Shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    998,000,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    [&#160;&#160;&#160;&#160;&#160;]
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    13,445,171
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Series B Cumulative Preferred Shares
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,995,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    [&#160;&#160;&#160;&#160;&#160;]
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    965,548
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<A name='Y91316113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TAXATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following discussion is a brief summary of certain
    U.S.&#160;federal income tax considerations affecting the Fund
    and its shareholders and noteholders (as the case may be). A
    more complete discussion of the tax rules applicable to the
    Fund, its shareholders and its noteholders can be found in the
    SAI that is incorporated by reference into this prospectus. This
    discussion assumes you are a U.S.&#160;person (as defined for
    U.S.&#160;federal income tax purposes) and that you hold your
    shares or notes as capital assets (generally, for investment).
    The discussion reflects applicable tax laws of the United States
    as of the date of this prospectus, which tax laws may be changed
    or subject to new interpretations by the courts or the Internal
    Revenue Service (the &#147;IRS&#148;) retroactively or
    prospectively. No assurance can be given that the IRS would not
    assert, or that a court would not sustain, a position different
    from any of the tax aspects set forth below. No attempt is made
    to present a detailed explanation of all U.S.&#160;federal,
    state, local and foreign tax concerns affecting the Fund and its
    shareholders and noteholders (including shareholders and
    noteholders subject to special tax rules and shareholders owning
    large positions in the Fund), and the discussion set forth
    herein does not constitute tax advice. Investors are urged to
    consult their own tax advisers to determine the tax consequences
    to them of investing in the Fund.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund has elected to be treated and has qualified as, and
    intends to continue to qualify as, a regulated investment
    company under Subchapter M of the Internal Revenue Code of 1986,
    as amended (the &#147;Code&#148;). Accordingly, the Fund must,
    among other things,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (i)&#160;derive in each taxable year at least 90% of its gross
    income from (a)&#160;dividends, interest (including tax-exempt
    interest), payments with respect to certain securities loans,
    and gains from the sale or other disposition of stock,
    securities or foreign currencies, or other income (including but
    not limited to gain from options, futures and forward contracts)
    derived with respect to its business of investing in such stock,
    securities or currencies and (b)&#160;net income derived from
    interests in certain publicly traded partnerships that are
    treated as partnerships for U.S.&#160;federal income tax
    purposes and that derive less than 90% of their gross income
    from the items described in (a)&#160;above (each a
    &#147;Qualified Publicly Traded Partnership&#148;);&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (ii)&#160;diversify its holdings so that, at the end of each
    quarter of each taxable year (a)&#160;at least 50% of the value
    of the Fund&#146;s total assets is represented by cash and cash
    items, U.S.&#160;government securities, the securities of other
    regulated investment companies and other securities, with such
    other securities limited, in respect of any one issuer, to an
    amount not greater than 5% of the value of the Fund&#146;s total
    assets and not more than 10% of the outstanding voting
    securities of such issuer, (b)&#160;not more than 25% of the
    value of the Fund&#146;s total assets is invested in the
    securities of (I)&#160;any one issuer (other than
    U.S.&#160;government securities and the securities of other
    regulated investment companies), (II)&#160;any two or more
    issuers that the Fund controls and that are determined to be
    engaged in the same business or similar or related trades or
    businesses or (III)&#160;any one or more Qualified Publicly
    Traded Partnerships.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As a regulated investment company, the Fund generally is not
    subject to U.S.&#160;federal income tax on income and gains that
    it distributes each taxable year to shareholders, if it
    distributes at least 90% of the sum
</DIV>
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    <BR>
    56
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    of the Fund&#146;s (i)&#160;investment company taxable income
    (which includes, among other items, dividends, interest and the
    excess of any net short-term capital gains over net long-term
    capital losses and other taxable income other than any net
    capital gain (as defined below) reduced by deductible expenses)
    determined without regard to the deduction for dividends and
    distributions paid and (ii)&#160;its net tax-exempt interest
    income (the excess of its gross tax-exempt interest income over
    certain disallowed deductions). The Fund intends to distribute
    at least annually substantially all of such income. The Fund
    will be subject to income tax at regular corporate rates on any
    investment company taxable income and net capital gain that it
    does not distribute to its shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Amounts not distributed on a timely basis in accordance with a
    calendar year distribution requirement are subject to a
    nondeductible 4% excise tax at the Fund level. To avoid the tax,
    the Fund must distribute during each calendar year an amount at
    least equal to the sum of (i)&#160;98% of its ordinary income
    (not taking into account any capital gains or losses) for the
    calendar year, (ii)&#160;98.2% of its capital gains in excess of
    its capital losses (adjusted for certain ordinary losses) for a
    one-year period generally ending on October 31 of the calendar
    year (unless an election is made to use the Fund&#146;s fiscal
    year), and (iii)&#160;certain undistributed amounts from
    previous years on which the Fund paid no U.S.&#160;federal
    income tax. While the Fund intends to distribute any income and
    capital gains in the manner necessary to minimize imposition of
    the 4% excise tax, there can be no assurance that sufficient
    amounts of the Fund&#146;s ordinary income and capital gains
    will be distributed to avoid entirely the imposition of the tax.
    In that event, the Fund will be liable for the tax only on the
    amount by which it does not meet the foregoing distribution
    requirement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If for any taxable year the Fund does not qualify as a regulated
    investment company, all of its taxable income (including its net
    capital gain) will be subject to tax at regular corporate rates
    without any deduction for distributions to shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund intends to take the position that under present law
    both the fixed rate preferred shares and variable rate preferred
    shares will constitute equity rather than debt of the Fund for
    federal income tax purposes. It is possible, however, that the
    Internal Revenue Service (the &#147;IRS&#148;) could take a
    contrary position asserting, for example, that the fixed rate
    preferred shares and variable rate preferred shares constitute
    debt of the Fund. The Fund believes this position, if asserted,
    would be unlikely to prevail. If that position were upheld
    distributions on the fixed rate preferred shares and variable
    rate preferred shares would be considered interest, taxable as
    ordinary income regardless of the taxable income of the Fund.
    The following discussion assumes the fixed rate preferred shares
    and auction-rate preferred shares are treated as equity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Distributions paid to you by the Fund from its investment
    company taxable income, which includes the excess of net
    short-term capital gains over net long-term capital losses
    (together referred to hereinafter as &#147;ordinary income
    dividends&#148;) are generally taxable to you as ordinary income
    to the extent of the Fund&#146;s earnings and profits. Provided
    that certain holding period and other requirements are met, such
    distributions (if designated by the Fund) may qualify
    (i)&#160;for the dividends received deduction in the case of
    corporate shareholders to the extent that the Fund&#146;s income
    consists of dividend income from U.S.&#160;corporations, and
    (ii)&#160;for taxable years beginning on or before
    December&#160;31, 2012, as qualified dividend income eligible
    for the reduced maximum U.S.&#160;federal income tax rate to
    individuals of generally 15% to the extent that the Fund
    receives qualified dividend income. Qualified dividend income
    is, in general, dividend income from taxable domestic
    corporations and certain foreign corporations (e.g., generally,
    foreign corporations incorporated in a possession of the United
    States or in certain countries with a qualified comprehensive
    tax treaty with the United States, or whose stock with respect
    to which such dividend is paid is readily tradable on an
    established securities market in the United States). There can
    be no assurance as to what portion of the Fund&#146;s ordinary
    income dividends will constitute qualified dividend income. In
    addition, the favorable treatment currently afforded to
    qualified dividend income will not apply to taxable years
    beginning after December&#160;31, 2012, unless extended by
    legislation.
</DIV>
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    <BR>
    57
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Distributions made to you from net capital gain, which is the
    excess of net long-term capital gains over net short-term
    capital losses (&#147;capital gain dividends&#148;), including
    capital gain dividends credited to you but retained by the Fund,
    are taxable to you as long-term capital gains if they have been
    properly designated by the Fund, regardless of the length of
    time you have owned Fund shares. The maximum U.S.&#160;federal
    income tax rate on net long-term capital gain of individuals is
    generally 15% for taxable years beginning before January&#160;1,
    2013. Distributions in excess of the Fund&#146;s earnings and
    profits will first reduce the adjusted tax basis of your shares
    and, after such adjusted tax basis is reduced to zero, will
    constitute capital gains to you (assuming the shares are held as
    a capital asset). Generally, not later than 60&#160;days after
    the close of its taxable year, the Fund will provide you with a
    written notice designating the amount of any qualified dividend
    income or capital gain dividends and other distributions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The sale or other disposition of shares of the Fund will
    generally result in capital gain or loss to you, and will be
    long-term capital gain or loss if the shares have been held for
    more than one year at the time of sale and are a capital asset
    in your hands. Any loss upon the sale or exchange of Fund shares
    held for six months or less will be treated as long-term capital
    loss to the extent of any capital gain dividends received
    (including amounts credited as an undistributed capital gain
    dividends) by you. A loss realized on a sale or exchange of
    shares of the Fund will be disallowed if other substantially
    identical shares are acquired (whether through the automatic
    reinvestment of dividends or otherwise) within a
    <FONT style="white-space: nowrap">61-day</FONT>
    period beginning 30&#160;days before and ending 30&#160;days
    after the date that the shares are disposed of. In such case,
    the basis of the shares acquired will be adjusted to reflect the
    disallowed loss. Present law taxes both long-term and short-term
    capital gains of corporations at the rates applicable to
    ordinary income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Dividends and other taxable distributions are taxable to you
    even though they are reinvested in additional shares of the
    Fund. If the Fund pays you a dividend or makes a distribution in
    January that was declared in the previous October, November or
    December to shareholders of record on a specified date in one of
    such months, then such dividend or distribution will be treated
    for tax purposes as being paid by the Fund and received by you
    on December 31 of the year in which the dividend or distribution
    was declared.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund is required in certain circumstances to backup withhold
    on taxable dividends or distributions and certain other payments
    paid to non-corporate holders of the Fund&#146;s shares who do
    not furnish the Fund with their correct taxpayer identification
    number (in the case of individuals, their social security
    number) and certain certifications, or who are otherwise subject
    to backup withholding. Backup withholding is not an additional
    tax. Any amounts withheld from payments made to you may be
    refunded or credited against your U.S.&#160;federal income tax
    liability, if any, provided that the required information is
    furnished to the IRS.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Noteholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This discussion assumes that the notes will not be issued with
    original issue discount for U.S.&#160;federal income tax
    purposes. Accordingly, noteholders will be required to include
    payments of interest on the notes in their gross income in
    accordance with their method of accounting for U.S.&#160;federal
    income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any gain from the disposition of the notes will be treated as
    capital gain for noteholders who hold the notes as capital
    assets and as long-term capital gain if the notes have been held
    for more than one year as of the date of disposition. However, a
    portion of such gain may be required to be treated as ordinary
    income under special rules of the Code governing the treatment
    of market discount. A noteholder who acquires a note at a market
    discount (i.e., at a price less than the principal amount or the
    &#147;adjusted issue price&#148; as determined for tax purposes,
    if relevant), such as a subsequent purchaser of the notes, will
    be required to treat as ordinary income a portion of any gain
    realized upon a disposition of the note equal to the amount of
    market discount deemed to have been accrued as of the date of
    disposition unless an election is made to include such discount
    in income on a current basis. A noteholder who acquires a note
    at a market discount and does not elect to include such discount
    in income on a current basis will be required to defer deduction
    of a portion of interest paid or accrued on debt incurred or
    continue to purchase or carry the note until the noteholder
    disposes of the note. These rules may have an effect on the
    price that can be obtained upon the sale of a note. Amounts
</DIV>
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    <BR>
    58
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    received upon a sale or redemption of the notes will be subject
    to tax as ordinary income to the extent of any accrued and
    unpaid interest on the notes as of the date of redemption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund is required in certain circumstances to backup
    withholding on interest distributions paid to non-corporate
    holders of the Fund&#146;s notes who do not furnish the Fund
    with their correct taxpayer identification number (in the case
    of individuals, their social security number) and certain
    certifications, or who are otherwise subject to backup
    withholding. Backup withholding is not an additional tax. Any
    amounts withheld from payments made to you may be refunded or
    credited against your U.S.&#160;federal income tax liability, if
    any, provided that the required information is furnished to the
    IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>The foregoing is a general and abbreviated summary of the
    provisions of the Code and the Treasury regulations in effect as
    they directly govern the taxation of the Fund, its shareholders
    and its noteholders. These provisions are subject to change by
    legislative or administrative action, and any such change may be
    retroactive. A more complete discussion of the tax rules
    applicable to the Fund, its shareholders and its noteholders can
    be found in the Statement of Additional Information that is
    incorporated by reference into this prospectus. Shareholders and
    noteholders are urged to consult their tax advisers regarding
    specific questions as to U.S.&#160;federal, foreign, state,
    local income or other taxes.</B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">ANTI-TAKEOVER
    PROVISIONS OF THE FUND&#146;S GOVERNING DOCUMENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund presently has provisions in its Governing Documents
    which could have the effect of limiting, in each case:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability of other entities or persons to acquire control of
    the Fund&#146;s Board;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the Fund&#146;s freedom to engage in certain
    transactions;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the ability of the Fund&#146;s Directors or shareholders to
    amend the Governing Documents or effectuate changes in the
    Fund&#146;s management.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    These provisions of the Governing Documents of the Fund may be
    regarded as &#147;anti-takeover&#148; provisions. The Board of
    the Fund is divided into three classes, each having a term of
    three years. Each year the term of one class of Directors will
    expire. Accordingly, only those Directors in one class may be
    changed in any one year, and it would require a minimum of two
    years to change a majority of the Board. Such system of electing
    Directors may have the effect of maintaining the continuity of
    management and, thus, make it more difficult for the
    shareholders of the Fund to change the majority of Directors.
    See &#147;Management of the Fund&#151;Directors and
    Officers&#148; in the SAI. A Director of the Fund may be removed
    with cause by a vote of a majority of the votes entitled to be
    cast for the election of Directors of the Fund. A Director of
    the Fund may not be removed without cause. In addition, the
    affirmative vote of the holders of 75% of the outstanding shares
    of the Fund, and the vote of a majority (as defined in the 1940
    Act) of the holders of preferred shares, voting as a single
    class, is required to authorize its conversion from a closed-end
    to an open-end investment company, or to amend certain
    provisions of the Charter involving conversion to an open-end
    fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Further, unless a higher percentage is provided for under the
    Charter, the affirmative vote of a majority (as defined in the
    1940 Act) of the votes entitled to be cast by holders of
    outstanding shares of the Fund&#146;s preferred stock, voting as
    a separate class, will be required to approve any plan of
    reorganization adversely affecting such stock or any action
    requiring a vote of security holders under Section&#160;13(a) of
    the 1940 Act, including, among other things, open-ending the
    Fund and changing the Fund&#146;s investment objective or
    changing the investment restrictions described as fundamental
    policies under &#147;Investment Restrictions&#148; in
    the&#160;SAI.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Maryland corporations that are subject to the 1934&#160;Act and
    have at least three outside directors, such as the Fund, may by
    board resolution elect to become subject to certain corporate
    governance provisions set forth in the Maryland corporate law,
    even if such provisions are inconsistent with the
    corporation&#146;s charter and by-
</DIV>
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    <BR>
    59
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    laws. Accordingly, notwithstanding its Governing Documents,
    under Maryland law the Fund&#146;s Board may elect by resolution
    to, among other things:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    require that special meetings of stockholders be called only at
    the request of stockholders entitled to cast at least a majority
    of the votes entitled to be cast at such meeting;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    reserve for the Board the right to fix the number of
    Fund&#160;Directors;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    provide that Directors are subject to removal only by the vote
    of the holders of two-thirds of the stock entitled to
    vote;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    retain for the Board sole authority to fill vacancies created by
    the death, removal or resignation of a Director, with any
    Director so appointed to serve for the balance of the unexpired
    term rather than only until the next annual meeting of
    stockholders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Board may make any of the foregoing elections without
    amending the Governing Documents and without stockholder
    approval. Though a corporation&#146;s charter or a resolution by
    its board may prohibit its Directors from making the elections
    set forth above, the Fund&#146;s Board currently is not
    prohibited from making any such elections.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The provisions of the Governing Documents and Maryland law
    described above could have the effect of depriving the owners of
    stock in the Fund of opportunities to sell their 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 overall effect of these
    provisions is to render more difficult the accomplishment of a
    merger or the assumption of control by a principal stockholder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Governing Documents of the Fund are on file with the SEC.
</DIV>

<A name='Y91316114'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">CLOSED-END
    FUND&#160;STRUCTURE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund is a diversified, closed-end management investment
    company (commonly referred to as a closed-end fund). Closed-end
    funds differ from open-end funds (which are generally referred
    to as mutual funds) in that closed-end funds generally list
    their shares for trading on a stock exchange and do not redeem
    their shares at the request of the shareholder. This means that
    if you wish to sell your shares of a closed-end fund you must
    trade them on the market like any other stock at the prevailing
    market price at that time. In a mutual fund, if the shareholder
    wishes to sell shares of the fund, the mutual fund will redeem
    or buy back the shares at &#147;net asset value.&#148; Also,
    mutual funds generally offer new shares on a continuous basis to
    new investors, and closed-end funds generally do not. The
    continuous inflows and outflows of assets in a mutual fund can
    make it difficult to manage the fund&#146;s investments. By
    comparison, closed-end funds are generally able to stay more
    fully invested in securities that are consistent with their
    investment objectives, to have greater flexibility to make
    certain types of investments and to use certain investment
    strategies such as financial leverage and investments in
    illiquid securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Shares of closed-end funds often trade at a discount to their
    net asset value. Because of this possibility and the recognition
    that any such discount may not be in the interest of
    shareholders, the Fund&#146;s Board might consider from time to
    time engaging in open-market repurchases, tender offers for
    shares or other programs intended to reduce a discount. We
    cannot guarantee or assure, however, that the Fund&#146;s Board
    will decide to engage in any of these actions. Nor is there any
    guarantee or assurance that such actions, if undertaken, would
    result in the shares trading at a price equal or close to net
    asset value per share. The Board might also consider converting
    the Fund to an open-end mutual fund, which would also require a
    supermajority vote of the shareholders of the Fund and a
    separate vote of any outstanding preferred shares. We cannot
    assure you that the Fund&#146;s common shares will not trade at
    a discount.
</DIV>
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    <BR>
    60
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='Y91316115'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">REPURCHASE
    OF SHARES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund is a diversified, closed-end management investment
    company and as such its shareholders do not, and will not, have
    the right to require the Fund to repurchase their shares. The
    Fund, however, may repurchase its common shares from time to
    time as and when it deems such a repurchase advisable. The
    Fund&#146;s Board has determined that such repurchase, up to
    500,000 common shares, may be made when the Fund&#146;s common
    shares are trading at a discount of 10% or more from net asset
    value (or such other percentage as the Board may determine from
    time to time). The Fund may also repurchase any preferred shares
    it issues. Although the Board has authorized such repurchases,
    the Fund is not required to repurchase its shares. Pursuant to
    the 1940 Act, the Fund may repurchase its shares on a securities
    exchange (provided that the Fund has informed its shareholders
    within the preceding six months of its intention to repurchase
    such shares) or pursuant to tenders and may also repurchase
    shares privately if the Fund meets certain conditions regarding,
    among other things, distribution of net income for the preceding
    fiscal year, status of the seller, price paid, brokerage
    commissions, prior notice to shareholders of an intention to
    purchase shares and purchasing in a manner and on a basis that
    does not discriminate unfairly against the other shareholders
    through their interest in the Fund. Any repurchase of common
    shares by the Fund will also be subject to Maryland corporate
    law, which requires that immediately following such repurchase
    the total assets of the Fund must be equal to or greater than
    the sum of the Fund&#146;s total liabilities plus the aggregate
    liquidation preference of its outstanding preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    When the Fund repurchases its common shares for a price below
    net asset value or preferred shares at a price below net asset
    value, the net asset value of the common shares that remain
    outstanding shares will be enhanced, but this does not
    necessarily mean that the market price of the outstanding common
    shares will be affected, either positively or negatively. The
    repurchase of common shares will reduce the total assets of the
    Fund available for investment and may increase the Fund&#146;s
    expense ratio.
</DIV>

<A name='Y91316116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">NET ASSET
    VALUE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The net asset value of the Fund&#146;s shares will be computed
    based on the market value of the securities it holds and will
    generally be determined daily as of the close of regular trading
    on the NYSE.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Portfolio instruments of the Fund which are traded in a market
    subject to government regulation on which trades are reported
    contemporaneously generally will be valued at the last sale
    price on the principal market for such instruments as of the
    close of regular trading on the day the instruments are being
    valued, or lacking any sales, at the average of the bid and
    asked price on the principal market for such instruments on the
    most recent date on which bid and asked prices are available.
    Initial public offering securities are initially valued at cost,
    and thereafter as any other equity security. Other readily
    marketable assets will be valued at the average of quotations
    provided by dealers maintaining an active market in such
    instruments. Short-term debt instruments that are credit
    impaired or mature in more than 60&#160;days for which market
    quotations are available are valued at the latest average of the
    bid and asked prices obtained from a dealer maintaining an
    active market in that security. Short-term investments that are
    not credit impaired and mature in 60&#160;days or fewer are
    valued at amortized cost from purchase price or value on the
    61st&#160;day prior to maturity. Securities and other assets for
    which market quotations are not readily available will be valued
    at fair value as determined in good faith by or under the
    direction of the Investment Adviser in accordance with
    guidelines adopted by the Fund. The Fund may employ recognized
    pricing services from time to time for the purpose of pricing
    portfolio instruments (including
    <FONT style="white-space: nowrap">non-U.S.&#160;dollar</FONT>
    denominated assets and futures and options).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Trading takes place in various foreign markets on days which are
    not Business Days and on which therefore the Fund&#146;s net
    asset value per share is not calculated. The calculation of the
    Fund&#146;s net asset value may not take place contemporaneously
    with the determination of the prices of portfolio securities
    held by the Fund. Events affecting the values of portfolio
    securities that occur between the time their prices are
    determined and the close of the NYSE will not be reflected in
    the Fund&#146;s calculation of net asset value unless the Board
    deems that the particular event would materially affect the net
    asset value, in which case the fair
</DIV>
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    <BR>
    61
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    value of those securities will be determined by consideration of
    other factors by or under the direction of the Board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Net asset value per share is calculated by dividing the value of
    the securities held plus any cash or other assets minus all
    liabilities, including accrued expenses, by the total number of
    shares outstanding at such time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>NYSE Closings.</I>&#160;&#160;The holidays (as observed) on
    which the NYSE is closed, and therefore days upon which
    shareholders cannot purchase or sell shares, currently are: New
    Year&#146;s Day, Martin Luther King,&#160;Jr. Day,
    Presidents&#146; Day, Good Friday, Memorial Day, Independence
    Day, Labor Day, Thanksgiving Day and Christmas Day and on the
    preceding Friday or subsequent Monday when a holiday falls on a
    Saturday or Sunday, respectively.
</DIV>

<A name='Y91316117'>
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">CUSTODIAN,
    TRANSFER AGENT, AUCTION AGENT AND DIVIDEND-DISBURSING
    AGENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    State Street Bank and Trust&#160;Company, located at 1776
    Heritage Drive, North Quincy, Massachusetts 02171, serves as the
    custodian of the Fund&#146;s assets pursuant to a custody
    agreement. Under the custody agreement, the Custodian holds the
    Fund&#146;s assets in compliance with the 1940 Act. For its
    services, the Custodian receives a monthly fee based upon, among
    other things, the average value of the total assets of the Fund,
    plus certain charges for securities transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Computershare Trust&#160;Company, N.A., located at 250 Royall
    Street, Canton, Massachusetts 02021, serves as the Fund&#146;s
    dividend disbursing agent, as agent under the Fund&#146;s
    automatic dividend reinvestment and voluntary cash purchase plan
    and as transfer agent and registrar for the common shares of the
    Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Computershare also serves as the Fund&#146;s transfer agent,
    registrar, dividend paying agent and redemption agent with
    respect to the Series&#160;B Preferred.
</DIV>

<A name='Y91316118'>
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PLAN OF
    DISTRIBUTION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We may sell our shares or notes through underwriters or dealers,
    directly to one or more purchasers, through agents, to or
    through underwriters or dealers, or through a combination of any
    such methods of sale. The applicable Prospectus Supplement will
    identify any underwriter or agent involved in the offer and sale
    of our shares or notes, any sales loads, discounts, commissions,
    fees or other compensation paid to any underwriter, dealer or
    agent, the offering price, net proceeds and use of proceeds and
    the terms of any sale.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The distribution of our shares or notes may be effected from
    time to time in one or more transactions at a fixed price or
    prices, which may be changed, at prevailing market prices at the
    time of sale, at prices related to such prevailing market
    prices, or at negotiated prices, provided, however, that the
    offering price per share in the case of common shares, must
    equal or exceed the net asset value per share, exclusive of any
    underwriting commissions or discounts, of our common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We may sell our shares or notes directly to, and solicit offers
    from, institutional investors or others who may be deemed to be
    underwriters as defined in the 1933&#160;Act for any resales of
    the securities. In this case, no underwriters or agents would be
    involved. We may use electronic media, including the Internet,
    to sell offered securities directly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In connection with the sale of our shares or notes, underwriters
    or agents may receive compensation from us in the form of
    discounts, concessions or commissions. Underwriters may sell our
    shares or notes to or through dealers, and such dealers may
    receive compensation in the form of discounts, concessions or
    commissions from the underwriters
    <FONT style="white-space: nowrap">and/or</FONT>
    commissions from the purchasers for whom they may act as agents.
    Underwriters, dealers and agents that participate in the
    distribution of our shares or notes may be deemed to be
    underwriters under the 1933&#160;Act, and any discounts and
    commissions they receive from us and any profit realized by them
    on the resale of our shares or notes may be deemed to be
    underwriting discounts and commissions under the 1933&#160;Act.
    Any such underwriter or agent will be identified and any such
    compensation received from us will be described in the
    applicable Prospectus Supplement. The maximum commission or
</DIV>
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    <BR>
    62
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    discount to be received by any FINRA member or independent
    broker-dealer will not exceed eight percent. We will not pay any
    compensation to any underwriter or agent in the form of
    warrants, options, consulting or structuring fees or similar
    arrangements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If a Prospectus Supplement so indicates, we may grant the
    underwriters an option to purchase additional shares or notes at
    the public offering price, less the underwriting discounts and
    commissions, within 45&#160;days from the date of the Prospectus
    Supplement, to cover any overallotments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    To facilitate an offering of shares or notes in an underwritten
    transaction and in accordance with industry practice, the
    underwriters may engage in transactions that stabilize,
    maintain, or otherwise affect the market price of the shares or
    notes. Those transactions may include overallotment, entering
    stabilizing bids, effecting syndicate covering transactions, and
    reclaiming selling concessions allowed to an underwriter or a
    dealer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    An overallotment in connection with an offering creates a short
    position in the shares or notes for the underwriter&#146;s own
    account.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    An underwriter may place a stabilizing bid to purchase the
    shares or notes for the purpose of pegging, fixing, or
    maintaining the price of the shares or notes.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Underwriters may engage in syndicate covering transactions to
    cover overallotments or to stabilize the price of the shares or
    notes subject to the offering by bidding for, and purchasing,
    the shares or notes or any other securities in the open market
    in order to reduce a short position created in connection with
    the offering.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The managing underwriter may impose a penalty bid on a syndicate
    member to reclaim a selling concession in connection with an
    offering when the shares or notes originally sold by the
    syndicate member are purchased in syndicate covering
    transactions or otherwise.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any of these activities may stabilize or maintain the market
    price of the securities above independent market levels. The
    underwriters are not required to engage in these activities, and
    may end any of these activities at any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any underwriters to whom the offered securities are sold for
    offering and sale may make a market in the offered securities,
    but the underwriters will not be obligated to do so and may
    discontinue any market-making at any time without notice. The
    offered securities may or may not be listed on a securities
    exchange. We cannot assure you that there will be a liquid
    trading market for the offered securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any Fixed Rate Preferred Shares sold pursuant to a Prospectus
    Supplement will likely be listed on the NYSE.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Under agreements into which we may enter, underwriters, dealers
    and agents who participate in the distribution of our shares or
    notes may be entitled to indemnification by us against certain
    liabilities, including liabilities under the 1933&#160;Act.
    Underwriters, dealers and agents may engage in transactions with
    us, or perform services for us, in the ordinary course of
    business.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If so indicated in the applicable Prospectus Supplement, we will
    ourselves, or will authorize underwriters or other persons
    acting as our agents to solicit offers by certain institutions
    to purchase our shares or notes from us pursuant to contracts
    providing for payment and delivery on a future date.
    Institutions with which such contacts may be made include
    commercial and savings banks, insurance companies, pension
    funds, investment companies, educational and charitable
    institutions and others, but in all cases such institutions must
    be approved by us. The obligation of any purchaser under any
    such contract will be subject to the condition that the purchase
    of the shares or notes shall not at the time of delivery be
    prohibited under the laws of the jurisdiction to which such
    purchaser is subject. The underwriters and such other agents
    will not have any responsibility in respect of the validity or
    performance of such contracts. Such contracts will be subject
    only to those conditions set forth in the Prospectus Supplement,
    and the Prospectus Supplement will set forth the commission
    payable for solicitation of such contracts.
</DIV>
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    <BR>
    63
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    To the extent permitted under the 1940 Act and the rules and
    regulations promulgated thereunder, the underwriters may from
    time to time act as brokers or dealers and receive fees in
    connection with the execution of our portfolio transactions
    after the underwriters have ceased to be underwriters and,
    subject to certain restrictions, each may act as a broker while
    it is an underwriter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A Prospectus and accompanying Prospectus Supplement in
    electronic form may be made available on the websites maintained
    by underwriters. The underwriters may agree to allocate a number
    of securities for sale to their online brokerage account
    holders. Such allocations of securities for Internet
    distributions will be made on the same basis as other
    allocations. In addition, securities may be sold by the
    underwriters to securities dealers who resell securities to
    online brokerage account holders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In order to comply with the securities laws of certain states,
    if applicable, our shares or notes offered hereby will be sold
    in such jurisdictions only through registered or licensed
    brokers or dealers.
</DIV>

<A name='Y91316119'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Certain legal matters will be passed on by Skadden, Arps, Slate,
    Meagher&#160;&#038; Flom LLP, counsel to the Fund in connection
    with the offering of the preferred shares.
</DIV>

<A name='Y91316120'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">INDEPENDENT
    REGISTERED PUBLIC ACCOUNTING FIRM</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;]
    serves as the independent registered public accounting firm of
    the Fund and audits the financial statements of the Fund.
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;]
    is located at
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;].
</DIV>

<A name='Y91316121'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">ADDITIONAL
    INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund is subject to the informational requirements of the
    1934&#160;Act and the 1940 Act and in accordance therewith files
    reports and other information with the SEC. Reports, proxy
    statements and other information filed by the Fund with the SEC
    pursuant to the informational requirements of the 1934&#160;Act
    and the 1940 Act can be inspected and copied at the public
    reference facilities maintained by the Securities and Exchange
    Commission, 450&#160;Fifth Street, N.W., Washington,&#160;D.C.
    20549. The SEC maintains a web site at
    <FONT style="white-space: nowrap">http://www.sec.gov</FONT>
    containing reports, proxy and information statements and other
    information regarding registrants, including the Fund, that file
    electronically with the SEC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s common shares are listed on the NYSE under the
    symbol &#147;GCV&#148; and the Series&#160;B Preferred is listed
    on the NYSE under the symbol &#147;GCV Pr B&#148;. Reports,
    proxy statements and other information concerning the Fund and
    filed with the SEC by the Fund will be available for inspection
    at the NYSE, 20&#160;Broad Street, New York, New York 10005, as
    the case may be.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This prospectus constitutes part of a Registration Statement
    filed by the Fund with the SEC under the 1933&#160;Act and the
    1940 Act. This prospectus omits certain of the information
    contained in the Registration Statement, and reference is hereby
    made to the Registration Statement and related exhibits for
    further information with respect to the Fund and the shares or
    notes offered hereby. Any statements contained herein concerning
    the provisions of any document are not necessarily complete,
    and, in each instance, reference is made to the copy of such
    document filed as an exhibit to the Registration Statement or
    otherwise filed with the SEC. Each such statement is qualified
    in its entirety by such reference. The complete Registration
    Statement may be obtained from the SEC upon payment of the fee
    prescribed by its rules and regulations or free of charge
    through the SEC&#146;s web site
    <FONT style="white-space: nowrap">(http://www.sec.gov).</FONT>
</DIV>

<A name='Y91316122'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PRIVACY
    PRINCIPLES OF THE FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund is committed to maintaining the privacy of its
    shareholders and to safeguarding their non-public personal
    information. The following information is provided to help you
    understand what personal information
</DIV>
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    <BR>
    64
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    the Fund collects, how the Fund protects that information and
    why, in certain cases, the Fund may share information with
    select other parties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Generally, the Fund does not receive any non-public personal
    information relating to its shareholders, although certain
    non-public personal information of its shareholders may become
    available to the Fund. The Fund does not disclose any non-public
    personal information about its shareholders or former
    shareholders to anyone, except as permitted by law or as is
    necessary in order to service shareholder accounts (for example,
    to a transfer agent or third party administrator).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund restricts access to non-public personal information
    about its shareholders to employees of the Fund&#146;s
    Investment Adviser and its affiliates with a legitimate business
    need for the information. The Fund maintains physical,
    electronic and procedural safeguards designed to protect the
    non-public personal information of its shareholders.
</DIV>

<A name='Y91316123'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">SPECIAL
    NOTE&#160;REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Certain statements in this prospectus constitute forward-looking
    statements, which involve known and unknown risks, uncertainties
    and other factors that may cause the actual results, levels of
    activity, performance or achievements of the Fund to be
    materially different from any future results, levels of
    activity, performance or achievements expressed or implied by
    such forward-looking statements. Such factors include, among
    others, those listed under &#147;Risk Factors and Special
    Considerations&#148; and elsewhere in this prospectus. As a
    result of the foregoing and other factors, no assurance can be
    given as to the future results, levels of activity or
    achievements, and neither the Fund nor any other person assumes
    responsibility for the accuracy and completeness of such
    statements.
</DIV>
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    <BR>
    65
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316124'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    An SAI dated as of May&#160;17, 2011, has been filed with the
    SEC and is incorporated by reference in this prospectus. An SAI
    may be obtained without charge by writing to the Fund at its
    address at One Corporate Center, Rye, New York
    <FONT style="white-space: nowrap">10580-1422</FONT>
    or by calling the Fund toll-free at (800)&#160;GABELLI
    <FONT style="white-space: nowrap">(422-3554).</FONT>
    The Table of Contents of the SAI is as follows:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="Y91316tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="95%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Page</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316145'>The Fund</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316126'>Investment Objective and Policies</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316127'>Investment Restrictions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316128'>Management of The Fund</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316129'>Auctions for Auction Rate Preferred Shares</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316130'>Portfolio Transactions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316131'>Portfolio Turnover</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316132'>Taxation</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316133'>Net Asset Value</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    39
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316134'>Beneficial Owners</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316135'>General Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316136'>Financial Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    No person has been authorized to give any information or to make
    any representations in connection with this offering other than
    those contained in this prospectus in connection with the offer
    contained herein, and, if given or made, such other information
    or representations must not be relied upon as having been
    authorized by the Fund, the Investment Adviser or the
    underwriters. Neither the delivery of this prospectus nor any
    sale made hereunder will, under any circumstances, create any
    implication that there has been no change in the affairs of the
    Fund since the date hereof or that the information contained
    herein is correct as of any time subsequent to its date. This
    prospectus does not constitute an offer to sell or a
    solicitation of an offer to buy any securities other than the
    securities to which it relates. This prospectus does not
    constitute an offer to sell or the solicitation of an offer to
    buy such securities in any circumstance in which such an offer
    or solicitation is unlawful.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    66
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316125'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">APPENDIX&#160;A<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">CORPORATE
    BOND RATINGS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">MOODY&#146;S
    INVESTORS SERVICE, INC.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="4%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="94%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Aaa
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bonds that are rated Aaa are judged to be of the best quality.
    They carry the smallest degree of investment risk and are
    generally referred to as &#147;gilt edge.&#148; Interest
    payments are protected by a large or 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.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Aa
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bonds that are 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
    that make the long-term risk appear somewhat larger than in Aaa
    Securities.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    A
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bonds that are 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 that
    suggest a susceptibility to impairment some time in the future.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Baa
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bonds that are 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.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ba
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bonds that are 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.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    B
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bonds that are 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. Moody&#146;s applies
    numerical modifiers (1, 2, and 3) with respect to the bonds
    rated Aa through B. The modifier 1 indicates that the company
    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 company ranks in the lower end of its generic
    rating category.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Caa
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bonds that are rated Caa are of poor standing. These issues may
    be in default or there may be present elements of danger with
    respect to principal or interest.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ca
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bonds that are rated Ca represent obligations that are
    speculative in a high degree. Such issues are often in default
    or have other marked shortcomings.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    C
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bonds that are 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.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">STANDARD&#160;&#038;
    POOR&#146;S RATINGS SERVICES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="5%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="93%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    AAA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    This is the highest rating assigned by S&#038;P to a debt
    obligation and indicates an extremely strong capacity to pay
    interest and repay principal.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    AA
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Debt rated AA has a very strong capacity to pay interest and
    repay principal and differs from AAA issues only in small degree.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    A
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Principal and interest payments on bonds in this category are
    regarded as safe.  Debt rated A has 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 debt in higher rated categories.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    BBB
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    This is the lowest investment grade.  Debt rated BBB has an
    adequate capacity to pay interest and repay principal.  Whereas
    it normally exhibits adequate protection parameters, adverse
    economic conditions or changing circumstances are more likely to
    lead to a weakened capacity to pay interest and repay principal
    for debt in this category than in higher rated categories.
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    1
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Speculative
    Grade</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Debt rated BB, 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 debt will likely
    have some quality and protective characteristics, these are
    outweighed by large uncertainties or major exposures to adverse
    conditions. Debt rated C 1 is reserved for income bonds on which
    no interest is being paid and debt rated D is in payment default.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In July 1994, S&#038;P initiated an &#147;r&#148; symbol to its
    ratings. The &#147;r&#148; symbol is attached to derivatives,
    hybrids and certain other obligations that S&#038;P believes may
    experience high variability in expected returns due to noncredit
    risks created by the terms of the obligations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    AA to CCC may be modified by the addition of a plus or minus
    sign to show relative standing within the major categories.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    &#147;NR&#148; indicates that no public rating has been
    requested, that there is insufficient information on which to
    base a rating, or that S&#038;P does not rate a particular type
    of obligation as a matter of policy.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <IMG src="y91316y9131600.gif" alt="(GABELLI LOGO)">
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 18pt">The Gabelli Convertible and
    Income Securities Fund&#160;Inc.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 14pt">Common Shares</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 14pt">Preferred Shares</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 14pt">Notes</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>PROSPECTUS</B>
</DIV>

<CENTER style="font-size: 1pt; width: 15%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2011</B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUPPLEMENT
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-family: 'Times New Roman', Times"> Filed
    Pursuant to Rule&#160;497
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-family: 'Times New Roman', Times">(To
    Prospectus
    dated&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2011)
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-family: 'Times New Roman', Times">
    Registration Statement
    <FONT style="white-space: nowrap">No.&#160;333-&#160;&#160;&#160;&#160;&#160;&#160;</FONT>
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 12pt">Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 16pt">The Gabelli Convertible and
    Income Securities Fund&#160;Inc.</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 14pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Shares of Beneficial Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We are offering for
    sale&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our common shares. Our common stock is listed on the New York
    Stock Exchange (the &#147;NYSE&#148;) under the symbol
    &#147;GCV&#148; and our Series&#160;B Preferred Stock
    (&#147;Series&#160;B Preferred Shares&#148;) is listed on the
    NYSE under the symbol &#147;GCV Pr B&#148;.
    On&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    the last reported sale price of our common shares was
    $&#160;&#160;&#160;&#160;&#160; and the last reported sale
    prices of our Series&#160;B Preferred Shares was
    $&#160;&#160;&#160;&#160;&#160; .
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    You should review the information set forth under &#147;Risk
    Factors and Special Considerations&#148; on page&#160;27 of the
    accompanying Prospectus before investing in our common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total(1)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discounts and commissions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds, before expenses, to us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    The aggregate expenses of the offering are estimated to be
    $&#160;&#160;&#160;&#160;&#160; , which represents approximately
    $&#160;&#160;&#160;&#160;&#160; per share.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [The underwriters may also purchase up to an additional
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;]
    common shares from us at the public offering price, less
    underwriting discounts and commissions, to cover
    over-allotments, if any, within 30&#160;days after the date of
    this Prospectus Supplement. If the over-allotment option is
    exercised in full, the total proceeds, before expenses, to the
    Fund would be $&#160;&#160;&#160;&#160;&#160; and the total
    underwriting discounts and commissions would be
    $&#160;&#160;&#160;&#160;&#160; . The common shares will be
    ready for delivery on or
    about&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.]
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    You should read this Prospectus Supplement and the accompanying
    Prospectus before deciding whether to invest in our common
    shares and retain it for future reference. The Prospectus
    Supplement and the accompanying Prospectus contain important
    information about us. Material that has been incorporated by
    reference and other information about us can be obtained from us
    by calling 1-800-GABELLI
    <FONT style="white-space: nowrap">(422-3554)</FONT>
    or from the Securities and Exchange Commission&#146;s
    (&#147;SEC&#148;) website
    <FONT style="white-space: nowrap">(http://www.sec.gov).</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Neither the SEC nor any state securities commission has approved
    or disapproved these securities or determined if this Prospectus
    Supplement is truthful or complete. Any representation to the
    contrary is a criminal offense.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><U><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</FONT></U><FONT style="font-family: 'Times New Roman', Times">,
    <U>&#160;&#160;</U></FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>You should rely only on the information contained or
    incorporated by reference in this Prospectus Supplement and the
    accompanying Prospectus. We have not authorized any other person
    to provide you with different information. If anyone provides
    you with different or inconsistent information, you should not
    rely on it. We are not making an offer to sell these securities
    in any jurisdiction in which the offer or sale is not
    permitted.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In this Prospectus Supplement and in the accompanying
    Prospectus, unless otherwise indicated, &#147;Fund,&#148;
    &#147;us,&#148; &#147;our&#148; and &#147;we&#148; refer to The
    Gabelli Convertible and Income Securities Fund&#160;Inc. . This
    Prospectus Supplement also includes trademarks owned by other
    persons.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    S-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Prospectus
    Supplement</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="Y91316tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316137'>Table of Fees and Expenses</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316138'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-4
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316139'>Price Range of Common Shares</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-4
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316140'>Plan of Distribution</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-5
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316141'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    S-5
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    S-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316137'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    FEES AND EXPENSES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following tables are intended to assist you in understanding
    the various costs and expenses directly or indirectly associated
    with investing in our common shares as a percentage of net
    assets attributable to common shares. Amounts are for the
    current fiscal year after giving effect to anticipated net
    proceeds of the offering, assuming that we incur the estimated
    offering expenses, including preferred share offering expenses.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Shareholder
    Transaction Expenses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="93%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Sales Load (as a percentage of offering price)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    [&#160;&#160;&#160;&#160;&#160;]
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Offering Expenses Borne by the Fund (as a percentage of offering
    price)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    [&#160;&#160;&#160;&#160;&#160;]
</TD>
<TD nowrap align="left" valign="bottom">
    %
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dividend Reinvestment Plan Fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    [&#160;&#160;&#160;&#160;&#160;]
</TD>
<TD nowrap align="left" valign="bottom">
    (1)
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="75%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="11%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Percentage of Net Assets<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Attributable to Common Shares</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Annual Expenses</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Management Fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    %&#160;(2)
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Interest on Borrowed Funds
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Other Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    %&#160;(2)
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Annual Expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    %&#160;(2)
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    You will be charged a $1.00 service charge and pay brokerage
    charges if you direct the plan agent to sell your common shares
    held in a dividend reinvestment account.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Investment Adviser&#146;s fee is 1.00% annually of the
    Fund&#146;s average weekly net assets Fund (which includes for
    this purpose assets attributable to outstanding preferred
    shares, if any, with no deduction for the liquidation preference
    of such preferred shares). The fee paid by the Fund may be
    higher when leverage in the form of preferred shares is
    utilized, giving the Investment Adviser an incentive to utilize
    such leverage. However, the Investment Adviser has agreed to
    reduce the management fee on the incremental assets attributable
    to the currently outstanding preferred shares during the fiscal
    year if the total return of the net asset value of the common
    shares of the Fund, including distributions and advisory fees
    subject to reduction for that year, does not exceed the stated
    dividend rate or corresponding swap rate of each particular
    series of currently outstanding preferred shares for the period.
    The Fund&#146;s total return on the net asset value of the
    common shares is monitored on a monthly basis to assess whether
    the total return on the net asset value of the common shares
    exceeds the stated dividend rate or corresponding swap rate of
    each particular series of preferred shares for the period. The
    test to confirm the accrual of the management fee on the assets
    attributable to each particular series of preferred shares is
    annual. The Fund will accrue for the management fee on these
    assets during the fiscal year if it appears probable that the
    Fund will incur the management fee on those additional assets.
    &#147;Other Expenses&#148; are based on estimated amounts for
    the current year assuming completion of the proposed issuances.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Example</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following example illustrates the expenses you would pay on
    a $1,000 investment in common shares, assuming a 5% annual
    portfolio total return.*
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="65%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="4%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>1&#160;Year</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>3&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>5&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>10&#160;Years</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total Expenses Incurred
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    <B>The example should not be considered a representation of
    future expenses</B>. The example assumes that the amounts set
    forth in the Annual Expenses table are accurate and that all
    distributions are reinvested at net asset value. Actual expenses
    may be greater or less than those assumed. Moreover, the
    Fund&#146;s actual rate of return may be greater or less than
    the hypothetical 5% return shown in the example.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    S-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316138'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We estimate the total net proceeds of the offering to be
    $&#160;&#160;&#160;&#160;&#160; based on the public offering
    price of $&#160;&#160;&#160;&#160;&#160; per share and after
    deducting underwriting discounts and commissions and estimated
    offering expenses payable by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser expects that it will initially invest the
    proceeds of the offering in high-quality short-term debt
    securities and instruments. The Investment Adviser anticipates
    that the investment of the proceeds will be made in accordance
    with the Fund&#146;s investment objectives and policies as
    appropriate investment opportunities are identified.
</DIV>

<A name='Y91316139'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PRICE
    RANGE OF COMMON SHARES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following table sets forth for the quarters indicated, the
    high and low sale prices on the NYSE per share of our common
    shares and the net asset value and the premium or discount from
    net asset value per share at which the common shares were
    trading, expressed as a percentage of net asset value, at each
    of the high and low sale prices provided.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="44%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="10%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="8%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
    <TD width="8%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=07 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=07 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=07 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=07 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Corresponding<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Corresponding<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Net Asset Value<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom">
    <B>Premium or Discount<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Market Price</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>(&#147;NAV&#148;) Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="7" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>as a % of NAV</B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Quarter Ended</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>High</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Low</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    03.31.06
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9.50
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.96
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10.62
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    06.30.06
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9.20
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.85
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    12.75
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;3.09
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    9.30.06
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9.19
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.89
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.21
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.89
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    12.31.06
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9.20
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.60
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.08
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.11
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.44
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    03.31.07
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9.20
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.78
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9.52
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.34
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    06.30.07
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9.59
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.83
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.59
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.44
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4.62
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    09.30.07
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9.57
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.58
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11.54
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;8.89
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    12.31.07
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.74
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.28
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.88
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    5.55
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;6.09
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    03.31.08
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8.08
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.61
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    6.18
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;4.53
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    06.30.08
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.62
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.00
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.13
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.71
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;1.82
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    9.30.08
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7.06
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.41
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.23
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1.73
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;13.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    12.31.08
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.71
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.66
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.49
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14.66
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;32.42
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    03.31.09
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    3.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4.38
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28.55
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;10.04
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    06.30.09
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.29
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4.60
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.72
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;4.17
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    9.30.09
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.70
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;2.40
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;4.95
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    12.31.09
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.91
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.51
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.96
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.82
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;0.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;5.33
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    03.31.10
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.55
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.71
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.09
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    7.44
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;2.23
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    06.30.10
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.80
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.60
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.24
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.72
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.97
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;2.10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    9.30.10
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.94
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.53
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.98
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.68
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;0.67
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;2.64
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    12.31.10
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.15
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.84
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.02
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    5.88
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2.16
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#8722;0.68
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    03.31.11
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.82
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.07
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.27
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    6.05
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8.77
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    0.33
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The last reported price for our common shares
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2011 was $&#160;&#160;&#160;&#160;&#160; per share.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    S-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316140'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PLAN OF
    DISTRIBUTION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>[To be provided.]</B>
</DIV>

<A name='Y91316141'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Certain legal matters will be passed on by Skadden, Arps, Slate,
    Meagher&#160;&#038; Flom LLP, New York, New&#160;York, counsel
    to the Fund in connection with the offering of the common shares.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    S-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 16pt">The Gabelli Convertible and
    Income Securities Fund&#160;Inc.<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 16pt">Common Shares</FONT></B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 31%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 21pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>PROSPECTUS SUPPLEMENT</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>&#160;&#160;&#160;&#160;&#160;, 2011</B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 31%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUPPLEMENT
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-family: 'Times New Roman', Times"> Filed
    Pursuant to Rule&#160;497
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-family: 'Times New Roman', Times">(To
    Prospectus
    dated&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2011)
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-family: 'Times New Roman', Times">
    Registration Statement
    <FONT style="white-space: nowrap">No.&#160;333-&#160;&#160;&#160;&#160;&#160;&#160;</FONT>
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 12pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 16pt">[GRAPHIC OMITTED]</FONT></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 14pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Series
    [&#160;&#160;] Preferred Stock</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We are offering for
    sale&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;shares
    of our Series&#160;&#160; Preferred Stock, par value $0.001 per
    share (the &#147;Series&#160;&#160; Preferred Shares&#148;). Our
    common stock (&#147;common shares&#148;) is listed on the New
    York Stock Exchange (the &#147;NYSE&#148;) under the symbol
    &#147;GCV&#148; and our Series&#160;B Preferred Stock
    (&#147;Series&#160;B Preferred Shares&#148;) is listed on the
    NYSE under the symbol &#147;GCV Pr B&#148;.
    On&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    the last reported sale price of our common shares was
    $&#160;&#160;&#160;&#160;&#160; and the last reported sale
    prices of our Series&#160;B Preferred Shares was
    $&#160;&#160;&#160;&#160;&#160;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    You should review the information set forth under &#147;Risk
    Factors and Special Considerations&#148; on
    page&#160;&#160;&#160; of the accompanying Prospectus before
    investing in our preferred stock (&#147;preferred shares&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total(1)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discounts and commissions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds, before expenses, to us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    The aggregate expenses of the offering are estimated to be
    $&#160;&#160;&#160;&#160;&#160;, which represents approximately
    $&#160;&#160;&#160;&#160;&#160; per share.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Series&#160;&#160; Preferred Shares will be ready for
    delivery on or
    about&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    You should read this Prospectus Supplement and the accompanying
    Prospectus before deciding whether to invest in our preferred
    shares and retain it for future reference. The Prospectus
    Supplement and the accompanying Prospectus contain important
    information about us. Material that has been incorporated by
    reference and other information about us can be obtained from us
    by calling 800-GABELLI
    <FONT style="white-space: nowrap">(422-3554)</FONT>
    or from the Securities and Exchange Commission&#146;s
    (&#147;SEC&#148;) website
    <FONT style="white-space: nowrap">(http://www.sec.gov).</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Neither the SEC nor any state securities commission has approved
    or disapproved these securities or determined if this Prospectus
    Supplement is truthful or complete. Any representation to the
    contrary is a criminal offense.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><U><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</FONT></U><FONT style="font-family: 'Times New Roman', Times">,
    <U>&#160;&#160;</U></FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>You should rely only on the information contained or
    incorporated by reference in this Prospectus Supplement and the
    accompanying Prospectus. We have not authorized any other person
    to provide you with different information. If anyone provides
    you with different or inconsistent information, you should not
    rely on it. We are not making an offer to sell these securities
    in any jurisdiction in which the offer or sale is not
    permitted.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In this Prospectus Supplement and in the accompanying
    Prospectus, unless otherwise indicated, &#147;Fund,&#148;
    &#147;us,&#148; &#147;our&#148; and &#147;we&#148; refer to The
    Gabelli Dividend and Income Trust. This Prospectus Supplement
    also includes trademarks owned by other persons.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    P-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Prospectus
    Supplement</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316150'>Terms of the Series&#160;&#160;Preferred
    Shares</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    P-3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316151'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    P-4
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316152'>Capitalization</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    P-5
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316153'>Asset Coverage Ratio</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    P-6
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316154'>Special Characteristics and Risks of the
    Preferred Shares</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    P-7
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316155'>Taxation</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    P-8
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316156'>Underwriting</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    P-9
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316157'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    P-9
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    P-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316150'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TERMS OF
    THE SERIES&#160;&#160; PREFERRED SHARES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    Dividend Rate </TD>
    <TD></TD>
    <TD valign="bottom">
    The dividend rate [for the initial dividend
    period]<SUP style="font-size: 85%; vertical-align: top">1</SUP>

    will be&#160;&#160;&#160;&#160;&#160;%.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Dividend Payment Rate </TD>
    <TD></TD>
    <TD valign="bottom">
    [Dividends will be paid when, as and if declared
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    and&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    commencing&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.]<SUP style="font-size: 85%; vertical-align: top">2</SUP>

    [The payment date for the initial dividend period will
    be&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.]<SUP style="font-size: 85%; vertical-align: top">1</SUP></TD>

</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    [Regular Dividend Period </TD>
    <TD></TD>
    <TD valign="bottom">
    Regular dividend periods will be&#160;&#160;
    days.]<SUP style="font-size: 85%; vertical-align: top">1</SUP></TD>

</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    [Regular Auction Date </TD>
    <TD></TD>
    <TD valign="bottom">
    Auctions will be held
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.]<SUP style="font-size: 85%; vertical-align: top">1</SUP></TD>

</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Liquidation Preference </TD>
    <TD></TD>
    <TD valign="bottom">
    $&#160;&#160;&#160;&#160;&#160; per share</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    [Non-Call Period </TD>
    <TD></TD>
    <TD valign="bottom">
    The shares may not be called for redemption at the option of the
    Fund prior
    to&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.]<SUP style="font-size: 85%; vertical-align: top">2</SUP></TD>

</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    [Stock Exchange
    Listing]<SUP style="font-size: 85%; vertical-align: top">2</SUP></TD>

    <TD></TD>
    <TD valign="bottom">
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Rating </TD>
    <TD></TD>
    <TD valign="bottom">
    It is a condition of issuance that the preferred shares be rated
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;]
    by
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;].</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    1 </TD>
    <TD></TD>
    <TD valign="bottom">
    Applicable only if the preferred shares being offered are
    auction rate preferred shares.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    2 </TD>
    <TD></TD>
    <TD valign="bottom">
    Applicable only if the preferred shares being offered are fixed
    rate preferred shares.</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    P-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316151'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We estimate the total net proceeds of the offering to be
    $&#160;&#160;&#160;&#160;&#160;, based on the public offering
    price of $&#160;&#160;&#160;&#160;&#160; per share and after
    deduction of the underwriting discounts and commissions and
    estimated offering expenses payable by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser expects that it will initially invest the
    proceeds of the offering in high-quality short-term income
    securities and instruments. The Investment Adviser anticipates
    that the investment of the proceeds will be made in accordance
    with the Fund&#146;s investment objective and policies as
    appropriate investment opportunities are identified, which is
    expected to be substantially completed within three months;
    however, changes in market conditions could result in the
    Fund&#146;s anticipated investment period extending to as long
    as six months.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    P-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316152'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [To be provided.]
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    P-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316153'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">ASSET
    COVERAGE RATIO</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [To be provided.]
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    P-6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316154'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">SPECIAL
    CHARACTERISTICS AND RISKS OF THE PREFERRED SHARES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [To be provided.]
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    P-7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TAXATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Please refer to the Taxation sections in the
    Fund&#160;Prospectus and Fund&#160;Statement of Additional
    Information for a description of the tax consequences of
    investing in the preferred shares of the Fund.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    P-8
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='Y91316156'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">UNDERWRITING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [To be provided.]
</DIV>

<A name='Y91316157'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Certain legal matters will be passed on by Skadden, Arps, Slate,
    Meagher&#160;&#038; Flom LLP, New York, New&#160;York counsel to
    the Fund in connection with the offering of the
    Series&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    Preferred Shares. Certain legal matters in connection with this
    offering will be passed on for the underwriters
    by&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    P-9
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 17pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Gabelli Convertible and Income Securities
    Fund&#160;Inc.</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 16pt">Preferred Shares</FONT></B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 31%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 21pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>PROSPECTUS SUPPLEMENT</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>&#160;&#160;&#160;&#160;&#160;, 2011</B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 31%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUPPLEMENT
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-family: 'Times New Roman', Times"> Filed
    Pursuant to Rule&#160;497
    </FONT></TD>
</TR>

</TABLE>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <FONT style="font-family: 'Times New Roman', Times">(To
    Prospectus
    dated&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    2011)
    </FONT></TD>
    <TD nowrap align="right">    <FONT style="font-family: 'Times New Roman', Times">
    Registration Statement
    <FONT style="white-space: nowrap">No.&#160;333-&#160;&#160;&#160;&#160;&#160;&#160;</FONT>
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 16pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">[GRAPHIC
    OMITTED]<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 16pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-size: 14pt; font-family: 'Times New Roman', Times">Notes&#160;[Specify
    Title]</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We are offering for
    sale&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;
    promissory notes. Our common shares are listed on the New York
    Stock Exchange (the &#147;NYSE&#148;) under the symbol
    &#147;GCV&#148; and our Series&#160;B Preferred Shares are
    listed on the NYSE under the symbol &#147;GCV Pr B&#148;.
    On&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    the last reported sale price of our common shares was
    $&#160;&#160;&#160;&#160;&#160; and the last reported sale
    prices of our Series&#160;B Preferred Shares was
    $&#160;&#160;&#160;&#160;&#160;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    You should review the information set forth under &#147;Risk
    Factors and Special Considerations&#148; on
    page&#160;&#160;&#160; of the accompanying Prospectus before
    investing in our notes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="85%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="2%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="2%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Note</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total(1)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discounts and commissions
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds, before expenses, to us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    The aggregate expenses of the offering are estimated to be
    $&#160;&#160;&#160;&#160;&#160;, which represents approximately
    $&#160;&#160;&#160;&#160;&#160; per note.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The notes will be ready for delivery on or
    about&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    You should read this Prospectus Supplement and the accompanying
    Prospectus before deciding whether to invest in our notes and
    retain it for future reference. The Prospectus Supplement and
    the accompanying Prospectus contain important information about
    us. Material that has been incorporated by reference and other
    information about us can be obtained from us by calling
    800-GABELLI
    <FONT style="white-space: nowrap">(422-3554)</FONT>
    or from the Securities and Exchange Commission&#146;s
    (&#147;SEC&#148;) website
    <FONT style="white-space: nowrap">(http://www.sec.gov).</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Neither the SEC nor any state securities commission has approved
    or disapproved these securities or determined if this Prospectus
    Supplement is truthful or complete. Any representation to the
    contrary is a criminal offense.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><U><FONT style="font-family: 'Times New Roman', Times">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;</FONT></U><FONT style="font-family: 'Times New Roman', Times">,
    <U>&#160;&#160;</U></FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>You should rely only on the information contained or
    incorporated by reference in this Prospectus Supplement and the
    accompanying Prospectus. We have not authorized any other person
    to provide you with different information. If anyone provides
    you with different or inconsistent information, you should not
    rely on it. We are not making an offer to sell these securities
    in any jurisdiction in which the offer or sale is not
    permitted.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In this Prospectus Supplement and in the accompanying
    Prospectus, unless otherwise indicated, &#147;Fund,&#148;
    &#147;us,&#148; &#147;our&#148; and &#147;we&#148; refer to The
    Gabelli Dividend and Income Trust. This Prospectus Supplement
    also includes trademarks owned by other persons.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Prospectus
    Supplement</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="Y91316tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316158'>Terms of the Notes</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N-3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316159'>Use of Proceeds</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N-4
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316160'>Capitalization</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N-5
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316161'>Asset Coverage Ratio</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N-6
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316162'>Special Characteristics and Risks of the Notes</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N-7
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316163'>Taxation</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N-9
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316164'>Underwriting</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N-10
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316165'>Legal Matters</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    N-10
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV align="left">
<!-- /TOC -->
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316158'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TERMS OF
    THE NOTES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    Principal Amount </TD>
    <TD></TD>
    <TD valign="bottom">
    The principal amount of the notes is
    $&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;in
    the aggregate.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Maturity </TD>
    <TD></TD>
    <TD valign="bottom">
    The principal amount of the notes will become due and payable
    on&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,&#160;&#160;&#160;&#160;&#160;.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Interest Rate </TD>
    <TD></TD>
    <TD valign="bottom">
    The interest rate will be&#160;&#160;&#160;&#160;&#160;%.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Frequency of payment </TD>
    <TD></TD>
    <TD valign="bottom">
    Interest will be
    paid&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;commencing&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Prepayment Protections </TD>
    <TD></TD>
    <TD valign="bottom">
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    [Stock Exchange Listing] </TD>
    <TD></TD>
    <TD valign="bottom">
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    Rating </TD>
    <TD></TD>
    <TD valign="bottom">
    It is a condition of issuance that the notes be rated
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;]
    by
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;].</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316159'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We estimate the total net proceeds of the offering to be
    $&#160;&#160;&#160;&#160;&#160;, based on the public offering
    price of $&#160;&#160;&#160;&#160;&#160; per note and after
    deduction of the underwriting discounts and commissions and
    estimated offering expenses payable by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser expects that it will initially invest the
    proceeds of the offering in high-quality short-term income
    securities and instruments. The Investment Adviser anticipates
    that the investment of the proceeds will be made in accordance
    with the Fund&#146;s investment objective and policies as
    appropriate investment opportunities are identified, which is
    expected to be substantially completed within three months;
    however, changes in market conditions could result in the
    Fund&#146;s anticipated investment period extending to as long
    as six months.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316160'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [To be provided.]
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316161'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">ASSET
    COVERAGE RATIO</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [To be provided.]
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-6
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316162'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">SPECIAL
    CHARACTERISTICS AND RISKS OF THE NOTES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [To be provided.]
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-7
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TERMS OF
    THE NOTES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [To be provided.]
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-8
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316163'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TAXATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Please refer to the Taxation sections in the
    Fund&#160;Prospectus and Fund&#160;Statement of Additional
    Information for a description of investing in notes of the Fund.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-9
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316164'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">UNDERWRITING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    [To be provided.]
</DIV>

<A name='Y91316165'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Certain legal matters will be passed on by Skadden, Arps, Slate,
    Meagher&#160;&#038; Flom LLP, New York, New York, counsel to the
    Fund in connection with the offering of the notes. Certain legal
    matters in connection with this offering will be passed on for
    the underwriters
    by&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    N-10
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 16pt">The Gabelli Convertible and
    Income Securities Fund&#160;Inc.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><FONT style="font-size: 12pt">Notes</FONT></B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 31%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 21pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>PROSPECTUS SUPPLEMENT</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>&#160;&#160;&#160;&#160;&#160;, 2011</B>
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 31%; border-bottom: 1pt solid #000000"></CENTER>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">SUBJECT
    TO COMPLETION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Dated
    May&#160;17, 2011</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    GABELLI CONVERTIBLE AND INCOME SECURITIES
    FUND&#160;INC.</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">STATEMENT
    OF ADDITIONAL INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    THE INFORMATION IN THIS STATEMENT OF ADDITIONAL INFORMATION IS
    NOT COMPLETE AND MAY BE CHANGED. THE FUND&#160;MAY NOT SELL
    THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
    SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS STATEMENT
    OF ADDITIONAL INFORMATION 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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Gabelli Convertible and Income Securities Fund&#160;Inc.
    (the &#147;Fund&#148;) is a diversified, closed-end management
    investment company registered under the Investment Company Act
    of 1940, as amended (the &#147;1940 Act&#148;). The Fund seeks a
    high level of total return on its assets through a combination
    of current income and capital appreciation. The Fund invests
    primarily in a portfolio of convertible and income producing
    securities selected by Gabelli Funds, LLC, the investment
    adviser to the Fund (the &#147;Investment Adviser&#148;). It is
    the policy of the Fund, under normal market conditions, to
    invest at least 80% of the value of its total assets in
    &#147;Convertible Securities,&#148; i.e., debt or equity
    securities (bonds, debentures, notes, stocks and other similar
    securities) that are convertible into common stock or other
    equity securities, and &#147;Income Securities,&#148; i.e.,
    securities that are expected to periodically accrue or generate
    income for securities holders, including short-term discounted
    Treasury Bills. The Fund expects to continue its practice of
    focusing on Convertible Securities to the extent attractive
    opportunities are available.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This Statement of Additional Information (the &#147;SAI&#148;)
    does not constitute a Prospectus, but should be read in
    conjunction with the Fund&#146;s Prospectus relating thereto
    dated May&#160;17, 2011, and as it may be supplemented. This SAI
    does not include all information that a prospective investor
    should consider before investing in the Fund&#146;s stock, and
    investors should obtain and read the Fund&#146;s Prospectus
    prior to purchasing such stock. A copy of the Fund&#146;s
    Registration Statement, including the Prospectus and any
    supplement, may be obtained from the Securities and Exchange
    Commission (the &#147;SEC&#148;) upon payment of the fee
    prescribed, or inspected at the SEC&#146;s office or via its
    website (www.sec.gov) at no charge.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This SAI is dated May&#160;17, 2011.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    1
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="Y91316tocpage"></A>
</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="97%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316145'>The Fund</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316126'>Investment Objective and Policies</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316127'>Investment Restrictions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    15
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316128'>Management of the Fund</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316129'>Auctions for Auction Rate Preferred Shares</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    28
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316130'>Portfolio Transactions</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    31
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316131'>Portfolio Turnover</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316132'>Taxation</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    32
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316133'>Net Asset Value</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    39
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316134'>Beneficial Owners</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316135'>General Information</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#Y91316136'>Financial Statements</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    42
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

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</DIV>

<DIV align="left">
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    <BR>
    2
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='Y91316145'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">THE
    FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Gabelli Convertible and Income Securities Fund&#160;Inc. is
    a diversified, closed-end management investment company
    organized under the laws of the State of Maryland. The Fund was
    incorporated in Maryland on December&#160;19, 1988 as an
    open-end, diversified, management investment company, and
    converted to closed-end status after receiving shareholder
    approval of its Charter on February&#160;21, 1995 and filing the
    Charter in Maryland on March&#160;31, 1995. The Fund&#146;s
    common stock (&#147;common shares&#148;) is listed on the New
    York Stock Exchange (the &#147;NYSE&#148;) under the symbol
    &#147;GCV.&#148; Certain series of the Fund&#146;s preferred
    stock (&#147;preferred shares&#148;) are listed on an exchange.
    The Fund&#146;s 6% Series&#160;B Cumulative Preferred Stock,
    liquidation preference $25 per share (the &#147;Series&#160;B
    Preferred&#148;) is traded on the NYSE under the symbol
    &#147;GCV Pr B&#148;. The Fund previously had
    600,000&#160;shares of Series&#160;A Preferred Stock outstanding
    and 1,000 Series&#160;C Auction Rate Cumulative Preferred Stock,
    liquidation preference $25,000 per share (the
    &#147;Series&#160;C Auction Rate Preferred&#148;) outstanding;
    however, all 600,000&#160;shares of the Series&#160;A Preferred
    were redeemed by the Fund on February&#160;11, 2003, and all
    1,000&#160;shares of Series&#160;C Auction Rate Preferred were
    redeemed by the Fund on June&#160;25, 2008.
</DIV>

<A name='Y91316126'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">INVESTMENT
    OBJECTIVE AND POLICIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Objective</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s investment objective is to seek a high level of
    total return on its assets. Under normal market conditions, the
    Fund will invest at least 80% of the value of its total assets
    in &#147;Convertible Securities,&#148; i.e., securities (bonds,
    debentures, notes, stocks and other similar securities) that are
    convertible into common stock or other equity securities, and
    &#147;Income Securities,&#148; i.e., securities that are
    expected to periodically accrue or generate income for their
    holders, including short-term discounted Treasury Bills. The
    Fund expects to continue its practice of focusing on Convertible
    Securities to the extent attractive opportunities are available.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Additional
    Investment Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Convertible Securities.</I>&#160;&#160;A Convertible Security
    entitles the holder to exchange such security for a fixed number
    of shares of common stock or other equity security, usually of
    the same company, at fixed prices within a specified period of
    time and to receive the fixed income of a bond or the dividend
    preference of a preferred stock until the holder elects to
    exercise the conversion privilege. The fixed income or dividend
    component of a Convertible Security is referred to as the
    security&#146;s &#147;investment value.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A Convertible Security&#146;s position in a company&#146;s
    capital structure depends upon its particular provisions. In the
    case of subordinated convertible debentures, the holder&#146;s
    claims on assets and earnings are subordinated to the claims of
    others and are senior to the claims of common stockholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    To the degree that the price of a Convertible Security rises
    above its investment value because of a rise in price of the
    underlying common stock, the value of such security is
    influenced more by price fluctuations of the underlying common
    stock and less by its investment value. The price of a
    Convertible Security that is supported principally by its
    conversion value will rise along with any increase in the price
    of the common stock, and such price generally will decline along
    with any decline in the price of the common stock except that
    the security will receive additional support as its price
    approaches investment value. A Convertible Security purchased or
    held at a time when its price is influenced by its conversion
    value will produce a lower yield than nonconvertible senior
    securities with comparable investment values. Convertible
    Securities may be purchased by the Fund at varying price levels
    above their investment values
    <FONT style="white-space: nowrap">and/or</FONT> their
    conversion values in keeping with the Fund&#146;s investment
    objective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Many Convertible Securities in which the Fund will invest have
    call provisions entitling the issuer to redeem the security at a
    specified time and at a specified price. This is one of the
    features of a Convertible Security which affects valuation.
    Calls may vary from absolute calls to provisional calls.
    Convertible Securities with superior call protection usually
    trade at a higher premium. If long-term interest rates decline,
</DIV>
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    <BR>
    3
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    the interest rates of new Convertible Securities will also
    decline. Therefore, in a falling interest rate environment
    companies may be expected to call Convertible Securities with
    high coupons and the Fund would have to invest the proceeds from
    such called issues in securities with lower coupons. Thus,
    Convertible Securities with superior call protection will permit
    the Fund to maintain a higher yield than with issues without
    call protection.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Income Securities.</I>&#160;&#160;Although it is the
    Fund&#146;s policy to invest in Convertible Securities to the
    extent attractive opportunities are available, the Fund may also
    invest in Income Securities other than Convertible Securities
    that are expected to periodically accrue or generate income for
    their holders. Such Income Securities include (i)&#160;fixed
    income securities such as bonds, debentures, notes, stock,
    short-term discounted Treasury Bills or certain securities of
    U.S.&#160;government sponsored instrumentalities, as well as
    money market mutual funds that invest in those securities,
    which, in the absence of an applicable exemptive order, will not
    be affiliated with the Investment Adviser, and (ii)&#160;common
    stocks of issuers that have historically paid dividends. Fixed
    income securities obligate the issuer to pay to the holder of
    the security a specified return, which may be either fixed or
    reset periodically in accordance with the terms of the security.
    Fixed income securities generally are senior to an issuer&#146;s
    common stock and their holders generally are entitled to receive
    amounts due before any distributions are made to common
    stockholders. Common stocks generally do not obligate an issuer
    to make periodic distributions to holders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The market value of fixed income securities, especially those
    that provide a fixed rate of return, may be expected to rise and
    fall inversely with interest rates and in general is affected by
    the credit rating of the issuer, the issuer&#146;s performance
    and perceptions of the issuer in the market place. The market
    value of callable or redeemable fixed income securities may also
    be affected by the issuer&#146;s call and redemption rights. It
    is possible that the issuer of fixed income securities may not
    be able to meet its payment obligations on interest or principal
    to holders. Further, holders of non-convertible fixed income
    securities do not participate in any capital appreciation of the
    issuer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may also invest in obligations of U.S.&#160;government
    sponsored instrumentalities. Unlike
    <FONT style="white-space: nowrap">non-U.S.&#160;government</FONT>
    securities, obligations of certain agencies and
    instrumentalities of the U.S.&#160;government, such as the
    Government National Mortgage Association, are supported by the
    &#147;full faith and credit&#148; of the U.S.&#160;government;
    others, such as those of the Export-Import Bank of the U.S., are
    supported by the right of the issuer to borrow from the
    U.S.&#160;Treasury; others, such as those of the Federal
    National Mortgage Association, are supported by the
    discretionary authority of the U.S.&#160;government to purchase
    the agency&#146;s obligations; and still others, such as those
    of the Student Loan Marketing Association, are supported only by
    the credit of the instrumentality. No assurance can be given
    that the U.S.&#160;government would provide financial support to
    U.S.&#160;government sponsored instrumentalities if it is not
    obligated to do so by law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund also may invest in common stock of issuers that have
    historically paid dividends or otherwise made distributions to
    common stockholders. Unlike payments on fixed income securities,
    common stock dividend payments generally are not guaranteed and
    so may be discontinued by the issuer at its discretion or
    because of the issuer&#146;s inability to satisfy its
    liabilities. Further, an issuer&#146;s history of paying
    dividends does not guarantee that it will continue to pay
    dividends in the future. In addition to dividends, under certain
    circumstances the holders of common stock may benefit from the
    capital appreciation of the issuer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Other Investments.</I>&#160;&#160;The Fund may without limit
    invest in securities of companies for which a tender or exchange
    offer has been made or announced and in securities of companies
    for which a merger, consolidation, liquidation or reorganization
    proposal has been announced if, in the judgment of the
    Investment Adviser, there is a reasonable prospect of capital
    appreciation significantly greater than the brokerage and other
    transaction expenses involved.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In general, securities which are the subject of such an offer or
    proposal sell at a premium to their historic market price
    immediately prior to the announcement of the offer or may also
    discount what the stated or appraised value of the security
    would be if the contemplated transaction were approved or
    consummated. Such investments may be advantageous when: the
    discount significantly overstates the risk of the contingencies
    involved; the market significantly undervalues the securities,
    assets or cash to be received by stockholders of
</DIV>
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    <BR>
    4
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    the prospective portfolio company as a result of the
    contemplated transaction; or the market fails adequately to
    recognize the possibility that the offer or proposal may be
    replaced or superseded by an offer or proposal of greater value.
    The evaluation of such contingencies requires unusually broad
    knowledge and experience on the part of the Investment Adviser
    which must appraise not only the value of the issuer and its
    component businesses as well as the assets or securities to be
    received as a result of the contemplated transaction but also
    the financial resources and business motivation of the offeror
    and the dynamics and business climate when the offer or proposal
    is in process.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In making the investments, the Fund will not violate any of its
    investment restrictions (see below, &#147;Investment
    Restrictions&#148;) including the requirement that, (i)&#160;as
    to 75% of its total assets, it will not invest more than 5% of
    its total assets in the securities of any one issuer and
    (ii)&#160;it will not invest more than 25% of its total assets
    in any one industry. Certain investments are short-term in
    nature and will tend to increase the turnover ratio of the Fund
    thereby increasing its brokerage and other transaction expenses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Unregistered Convertible Securities and Other Illiquid
    Investments.</I>&#160;&#160;As set forth in the Prospectus, the
    Fund is not subject to an independent limitation on the amount
    it may invest in unregistered securities and other illiquid
    investments, including repurchase agreements having a maturity
    of longer than seven days.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The staff of the SEC has taken the position that purchased
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    (&#147;OTC&#148;) options and the assets used as
    &#147;cover&#148; for written OTC options are illiquid. The
    assets used as cover for OTC options written by the Fund will be
    considered illiquid unless the OTC options are sold to qualified
    dealers who agree that the Fund may repurchase any OTC option it
    writes at a maximum price to be calculated by a formula set
    forth in the option agreement. The cover for an OTC option
    written subject to this procedure will be considered illiquid
    only to the extent that the maximum repurchase price under the
    option formula exceeds the intrinsic value of the option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>When Issued and Delayed Delivery Securities and Forward
    Commitments.</I>&#160;&#160;As discussed in the Prospectus, the
    Fund may purchase securities on a &#147;when, as and if
    issued&#148; basis under which the issuance of the security
    depends upon the occurrence of a subsequent event, such as
    approval of a merger, corporate reorganization or debt
    restructuring. The commitment for the purchase of any such
    security will not be recognized in the portfolio of the Fund
    until the Investment Adviser determines that issuance of the
    security is probable. At such time, the Fund will record the
    transaction and, in determining its net asset value, will
    reflect the value of the security daily. At such time, the Fund
    will also establish a segregated account with its custodian bank
    in which it will maintain cash or liquid high-grade debt
    securities at least equal in value to the amount of its
    commitments. The Investment Adviser does not believe that the
    net asset value of the Fund will be adversely affected by its
    purchase of securities on this basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Foreign Securities.</I>&#160;&#160;Subject to the limitations
    described in the Prospectus, the Fund may invest in foreign
    securities which involve certain risks not associated with
    domestic investments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Among other risks, foreign markets have different clearance and
    settlement procedures, and in certain markets there have been
    times when settlements have failed to keep pace with the volume
    of securities transactions, making it difficult to conduct such
    transactions. Delays in settlements could result in temporary
    periods when assets of the Fund are uninvested and no return is
    earned thereon. The inability of the Fund to make intended
    security purchases due to settlement problems could cause the
    Fund to miss attractive investment opportunities. Inability to
    dispose of a portfolio security due to settlement problems could
    result either in losses to the Fund due to subsequent declines
    in the value of such portfolio security or, if the Fund has
    entered into a contract to sell the security, could result in
    possible liability to the purchaser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>High Yield/High Risk Securities.</I>&#160;&#160;Subject to
    the limitations described in the Prospectus, the Fund may invest
    in high yielding, lower rated bonds, commonly called &#147;junk
    bonds.&#148; Bonds that are rated Ba or lower by Moody&#146;s
    Investors Services, Inc. (&#147;Moody&#146;s&#148;) or BB or
    lower by Standard&#160;&#038; Poor&#146;s Rating Services
    (&#147;S&#038;P&#148;), or unrated bonds of comparable quality,
    are generally considered to be high yield bonds. These high
    yield bonds are subject to greater risks than lower yielding,
    higher rated debt securities.
</DIV>
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    <BR>
    5
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Lower rated securities are subject to risk factors such as:
    (i)&#160;vulnerability to economic downturns and changes in
    interest rates; (ii)&#160;sensitivity to adverse economic
    changes and corporate developments; (iii)&#160;redemption or
    call provisions which may be exercised at inopportune times;
    (iv)&#160;difficulty in accurately valuing or disposing of such
    securities; (v)&#160;federal legislation which could affect the
    market for such securities; and (vi)&#160;special adverse tax
    consequences associated with investments in certain high yield,
    high risk bonds structured as zero coupon or
    <FONT style="white-space: nowrap">pay-in-kind</FONT>
    securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    High yield bonds, like other bonds, may contain redemption or
    call provisions. If an issuer exercises these provisions in a
    declining interest rate market, the Fund would have to replace
    the security with a lower yielding security, resulting in lower
    return for investors. Conversely, a high yield bond&#146;s value
    will decrease in a rising interest rate market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The market for high yield bonds is in some cases more thinly
    traded than the market for investment grade bonds, and recent
    market quotations may not be available for some of these bonds.
    Market quotations are generally available only from a limited
    number of dealers and may not represent firm bids from such
    dealers or prices for actual sales. As a result, the Fund may
    have greater difficulty valuing the high yield bonds in its
    portfolio accurately and disposing of these bonds at the time or
    price desired.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Ratings assigned by Moody&#146;s and S&#038;P to high yield
    bonds, like other bonds, attempt to evaluate the timeliness of
    principal and interest payments on those bonds. However, such
    ratings do not assess the risk of a decline in the market value
    of those bonds. In addition, ratings may fail to reflect recent
    events in a timely manner and are subject to change. If a rating
    with respect to a portfolio security is changed, the Investment
    Adviser will determine whether the security will be retained
    based upon the factors the Investment Adviser considers in
    acquiring or holding other securities in the portfolio.
    Investment in high yield bonds may make achievement of the
    Fund&#146;s investment objective more dependent on the
    Investment Adviser&#146;s own credit analysis than is the case
    for higher rated bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Market prices for high yield bonds tend to be more sensitive
    than those for higher rated securities due to many of the
    factors described above, including the creditworthiness of the
    issuer, redemption or call provisions, the liquidity of the
    secondary trading market and changes in credit ratings, as well
    as interest rate movements and general economic conditions. In
    addition, yields on such bonds will fluctuate over time. An
    economic downturn could severely disrupt the market for high
    yield bonds.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The risk of default in payment of principal and interest on high
    yield bonds is significantly greater than with higher rated debt
    securities because high yield bonds are generally unsecured and
    are often subordinated to other obligations of the issuer, and
    because the issuers of high yield bonds usually have high levels
    of indebtedness and are more sensitive to adverse economic
    conditions, such as recession or increasing interest rates. Upon
    a default, bondholders may incur additional expenses in seeking
    recovery.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As a result of all these factors, the net asset value of the
    Fund to the extent it invests in high yield bonds, is expected
    to be more volatile than the net asset value of funds which
    invest solely in higher rated debt securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Options.</I>&#160;&#160;The Fund may, from time to time,
    subject to guidelines of the Board of Directors (the
    &#147;Board&#148;) and the limitations set forth in the
    prospectus, purchase or sell (i.e., write) options on
    securities, securities indices and foreign currencies which are
    listed on a national securities exchange or in the OTC market,
    as a means of achieving additional return or of hedging the
    value of the Fund&#146;s portfolio. The Fund may write covered
    call options on common stock that it owns or has an immediate
    right to acquire through conversion or exchange of other
    securities in an amount not to exceed 25% of total assets or
    invest up to 10% of its total assets in the purchase of put
    options on common stocks that the Fund owns or may acquire
    through the conversion or exchange of other securities that it
    owns. The Fund may not write covered call options in an amount
    exceeding 25% of the value of its total assets. The Fund&#146;s
    investment in OTC options is limited to 5% of its total asset.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A call option is a contract that gives the holder of the option
    the right to buy from the writer of the call option, in return
    for a premium, the security or currency underlying the option at
    a specified exercise price at
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    any time during the term of the option. The writer of the call
    option has the obligation, upon exercise of the option, to
    deliver the underlying security or currency upon payment of the
    exercise price during the option period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A put option is a contract that gives the holder of the option
    the right, in return for a premium, to sell to the seller the
    underlying security at a specified price. The seller of the put
    option has the obligation to buy the underlying security upon
    exercise at the exercise price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A call option is &#147;covered&#148; if the Fund owns the
    underlying instrument covered by the call or has an absolute and
    immediate right to acquire that instrument without additional
    cash consideration (or for additional cash consideration held in
    a segregated account by its custodian) upon conversion or
    exchange of other instruments held in its portfolio. A call
    option is also covered if the Fund holds a call on the same
    instrument as the call written where the exercise price of the
    call held is (i)&#160;equal to or less than the exercise price
    of the call written or (ii)&#160;greater than the exercise price
    of the call written if the difference is maintained by the Fund
    in cash, U.S.&#160;government securities or other high-grade
    short-term obligations in a segregated account with its
    custodian. A put option is &#147;covered&#148; if the Fund
    maintains cash or other high grade short-term obligations with a
    value equal to the exercise price in a segregated account with
    its custodian, or else holds a put on the same instrument as the
    put written where the exercise price of the put held is equal to
    or greater than the exercise price of the put written.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the Fund has written an option, it may terminate its
    obligation by effecting a closing purchase transaction. This is
    accomplished by purchasing an option of the same series as the
    option previously written. However, once the Fund has been
    assigned an exercise notice, the Fund will be unable to effect a
    closing purchase transaction. Similarly, if the Fund is the
    holder of an option it may liquidate its position by effecting a
    closing sale transaction. This is accomplished by selling an
    option of the same series as the option previously purchased.
    There can be no assurance that either a closing purchase or sale
    transaction can be effected when the Fund so desires.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund will realize a profit from a closing transaction if the
    price of the transaction is less than the premium received from
    writing the option or is more than the premium paid to purchase
    the option; the Fund will realize a loss from a closing
    transaction if the price of the transaction is more than the
    premium received from writing the option or is less than the
    premium paid to purchase the option. Since call option prices
    generally reflect increases in the price of the underlying
    security, any loss resulting from the repurchase of a call
    option may also be wholly or partially offset by unrealized
    appreciation of the underlying security. Other principal factors
    affecting the market value of a put or a call option include
    supply and demand, interest rates, the current market price and
    price volatility of the underlying security and the time
    remaining until the expiration date. Gains and losses on
    investments in options depend, in part, on the ability of the
    Investment Adviser to predict correctly the effect of these
    factors. The use of options cannot serve as a complete hedge
    since the price movement of securities underlying the options
    will not necessarily follow the price movements of the portfolio
    securities subject to the hedge.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    An option position may be closed out only on an exchange which
    provides a secondary market for an option of the same series or
    in a private transaction. Although the Fund will generally
    purchase or write only those options for which there appears to
    be an active secondary market, there is no assurance that a
    liquid secondary market on an exchange or otherwise will exist
    for any particular option. In such event it might not be
    possible to effect closing transactions in particular options,
    so that the Fund would have to exercise its options in order to
    realize any profit and would incur brokerage commissions upon
    the exercise of call options and upon the subsequent disposition
    of underlying securities for the exercise of put options. If the
    Fund, as a covered call option writer, is unable to effect a
    closing purchase transaction in a secondary market, it will not
    be able to sell the underlying security until the option expires
    or it delivers the underlying security upon exercise or
    otherwise covers the position.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Options on Securities Indices.</I>&#160;&#160;The Fund may
    purchase and sell securities index options. One effect of such
    transactions may be to hedge all or part of the Fund&#146;s
    securities holdings against a general decline in the securities
    market or a segment of the securities market. Options on
    securities indices are similar to options on
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    stocks except that, rather than the right to take or make
    delivery of stock at a specified price, an option on a
    securities index gives the holder the right to receive, upon
    exercise of the option, an amount of cash if the closing level
    of the securities index upon which the option is based is
    greater than, in the case of a call, or less than, in the case
    of a put, the exercise price of the option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s successful use of options on indices depends
    upon its ability to predict the direction of the market and is
    subject to various additional risks. The correlation between
    movements in the index and the price of the securities being
    hedged against is imperfect and the risk from imperfect
    correlation increases as the composition of the Fund diverges
    from the composition of the relevant index. Accordingly, a
    decrease in the value of the securities being hedged against may
    not be wholly offset by a gain on the exercise or sale of a
    securities index put option held by the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Options on Foreign Currencies.</I>&#160;&#160;Instead of
    purchasing or selling currency futures (as described below), the
    Fund may attempt to accomplish similar objectives by purchasing
    put or call options on currencies or by writing put options or
    call options on currencies either on exchanges or in OTC
    markets. A put option gives the Fund the right to sell a
    currency at the exercise price until the option expires. A call
    option gives the Fund the right to purchase a currency at the
    exercise price until the option expires. Both types of options
    serve to insure against adverse currency price movements in the
    underlying portfolio assets designated in a given currency. The
    Fund&#146;s use of options on currencies will be subject to the
    same limitations as its use of options on securities, described
    above and in the Prospectus. Currency options may be subject to
    position limits which may limit the ability of the Fund to fully
    hedge its positions by purchasing the options.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As in the case of interest rate futures contracts and options
    thereon, described below, the Fund may hedge against the risk of
    a decrease or increase in the U.S.&#160;dollar value of a
    foreign currency denominated debt security which the Fund owns
    or intends to acquire by purchasing or selling options
    contracts, futures contracts or options thereon with respect to
    a foreign currency other than the foreign currency in which such
    debt security is denominated, where the values of such different
    currencies (vis-&#224;-vis the U.S.&#160;dollar) historically
    have a high degree of positive correlation.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Futures Contracts and Options on Futures.</I>&#160;&#160;The
    Fund may enter into futures contracts or options on futures
    contracts. It is anticipated that these investments, if any,
    will be made by the Fund primarily for the purpose of hedging
    against changes in the value of its portfolio securities and in
    the value of securities it intends to purchase. Such investments
    will only be made if they are economically appropriate to the
    reduction of risks involved in the management of the Fund. In
    this regard, the Fund may enter into futures contracts or
    options on futures for the purchase or sale of securities
    indices or other financial instruments including but not limited
    to U.S.&#160;government securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A &#147;sale&#148; of a futures contract (or a &#147;short&#148;
    futures position) means the assumption of a contractual
    obligation to deliver the securities underlying the contract at
    a specified price at a specified future time. A
    &#147;purchase&#148; of a futures contract (or a
    &#147;long&#148; futures position) means the assumption of a
    contractual obligation to acquire the securities underlying the
    contract at a specified price at a specified future time.
    Certain futures contracts, including stock and bond index
    futures, are settled on a net cash payment basis rather than by
    the sale and delivery of the securities underlying the futures
    contracts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    No consideration will be paid or received by the Fund upon the
    purchase or sale of a futures contract. Initially, the Fund will
    be required to deposit with the broker an amount of cash or cash
    equivalents equal to approximately 1% to 10% of the contract
    amount (this amount is subject to change by the exchange or
    board of trade on which the contract is traded and brokers or
    members of such board of trade may charge a higher amount). This
    amount is known as the &#147;initial margin&#148; and is in the
    nature of a performance bond or good faith deposit on the
    contract. Subsequent payments, known as &#147;variation
    margin,&#148; to and from the broker will be made daily as the
    price of the index or security underlying the futures contract
    fluctuates. At any time prior to the expiration of the futures
    contract, the Fund may elect to close the position by taking an
    opposite position, which will operate to terminate its existing
    position in the contract.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    An option on a futures contract gives the purchaser the right,
    in return for the premium paid, to assume a position in a
    futures contract at a specified exercise price at any time prior
    to the expiration of the option. Upon exercise of an option, the
    delivery of the futures position by the writer of the option to
    the holder of the option will be accompanied by delivery of the
    accumulated balance in the writer&#146;s futures margin account
    attributable to that contract, which represents the amount by
    which the market price of the futures contract exceeds, in the
    case of a call, or is less than, in the case of a put, the
    exercise price of the option on the futures contract. The
    potential loss related to the purchase of an option on futures
    contracts is limited to the premium paid for the option (plus
    transaction costs). Because the value of the option purchased is
    fixed at the point of sale, there are no daily cash payments by
    the purchaser to reflect changes in the value of the underlying
    contract; however, the value of the option does change daily and
    that change would be reflected in the net assets of the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Futures and options on futures entail certain risks, including
    but not limited to the following: no assurance that futures
    contracts or options on futures can be offset at favorable
    prices, possible reduction of the yield of the Fund due to the
    use of hedging, possible reduction in value of both the
    securities hedged and the hedging instrument, possible lack of
    liquidity due to daily limits on price fluctuations, imperfect
    correlation between the contracts and the securities being
    hedged, losses from investing in futures transactions that are
    potentially unlimited and the segregation requirements described
    below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In the event the Fund sells a put option or enters into long
    futures contracts, under current interpretations of the
    Investment Company Act of 1940 (the &#147;1940 Act&#148;), an
    amount of cash, U.S.&#160;Government Securities or other liquid
    securities equal to the market value of the contract must be
    deposited and maintained in a segregated account with the
    Fund&#146;s custodian to collateralize the positions, in order
    for the Fund to avoid being treated as having issued a senior
    security in the amount of its obligations. For short positions
    in futures contracts and sales of call options, the Fund may
    establish a segregated account (not with a futures commission
    merchant or broker) with cash, U.S.&#160;Government Securities
    or other high grade debt securities that, when added to amounts
    deposited with a futures commission merchant or a broker as
    margin, equal the market value of the instruments or currency
    underlying the futures contracts or call options, respectively
    (but are no less than the stock price of the call option or the
    market price at which the short positions were established).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Interest Rate Futures Contracts and Options
    Thereon.</I>&#160;&#160;The Fund may purchase or sell interest
    rate futures contracts to take advantage of or to protect the
    Fund against fluctuations in interest rates affecting the value
    of debt securities which the Fund holds or intends to acquire.
    For example, if interest rates are expected to increase, the
    Fund might sell futures contracts on debt securities, the values
    of which historically have a high degree of positive correlation
    to the values of the Fund&#146;s portfolio securities. Such a
    sale would have an effect similar to selling an equivalent value
    of the Fund&#146;s portfolio securities. If interest rates
    increase, the value of the Fund&#146;s portfolio securities will
    decline, but the value of the futures contracts to the Fund will
    increase at approximately an equivalent rate thereby keeping the
    net asset value of the Fund from declining as much as it
    otherwise would have. The Fund could accomplish similar results
    by selling debt securities with longer maturities and investing
    in debt securities with shorter maturities when interest rates
    are expected to increase. However, since the futures market may
    be more liquid than the cash market, the use of futures
    contracts as a risk management technique allows the Fund to
    maintain a defensive position without having to sell its
    portfolio securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Similarly, the Fund may purchase interest rate futures contracts
    when it is expected that interest rates may decline. The
    purchase of futures contracts for this purpose constitutes a
    hedge against increases in the price of debt securities (caused
    by declining interest rates) which the Fund intends to acquire.
    Since fluctuations in the value of appropriately selected
    futures contracts should approximate that of the debt securities
    that will be purchased, the Fund can take advantage of the
    anticipated rise in the cost of the debt securities without
    actually buying them. Subsequently, the Fund can make its
    intended purchase of the debt securities in the cash market and
    liquidate its futures position. To the extent the Fund enters
    into futures contracts for this purpose, it will maintain in a
    segregated asset account with the Fund&#146;s custodian, assets
    sufficient to cover the Fund&#146;s obligations with respect to
    such futures contracts, which will consist of cash or other
    liquid securities from its
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    portfolio in an amount equal to the difference between the
    fluctuating market value of such futures contracts and the
    aggregate value of the initial margin deposited by the Fund with
    its custodian with respect to such futures contracts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The purchase of a call option on a futures contract is similar
    in some respects to the purchase of a call option on an
    individual security. Depending on the pricing of the option
    compared to either the price of the futures contract upon which
    it is based or the price of the underlying debt securities, it
    may or may not be less risky than ownership of the futures
    contract or underlying debt securities. As with the purchase of
    futures contracts, when the Fund is not fully invested it may
    purchase a call option on a futures contract to hedge against a
    market advance due to declining interest rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The purchase of a put option on a futures contract is similar to
    the purchase of protective put options on portfolio securities.
    The Fund will purchase a put option on a futures contract to
    hedge the Fund&#146;s portfolio against the risk of rising
    interest rates and consequent reduction in the value of
    portfolio securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The writing of a call option on a futures contract constitutes a
    partial hedge against declining prices of the securities which
    are deliverable upon exercise of the futures contract. If the
    futures price at expiration of the option is below the exercise
    price, the Fund will retain the full amount of the option
    premium which provides a partial hedge against any decline that
    may have occurred in the Fund&#146;s portfolio holdings. The
    writing of a put option on a futures contract constitutes a
    partial hedge against increasing prices of the securities that
    are deliverable upon exercise of the futures contract. If the
    futures price at expiration of the option is higher than the
    exercise price, the Fund will retain the full amount of the
    option premium, which provides a partial hedge against any
    increase in the price of debt securities that the Fund intends
    to purchase. If a put or call option the Fund has written is
    exercised, the Fund will incur a loss which will be reduced by
    the amount of the premium it received. Depending on the degree
    of correlation between changes in the value of its portfolio
    securities and changes in the value of its futures positions,
    the Fund&#146;s losses from options on futures it has written
    may to some extent be reduced or increased by changes in the
    value of its portfolio securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Currency Futures and Options
    Thereon.</I>&#160;&#160;Generally, foreign currency futures
    contracts and options thereon are similar to the interest rate
    futures contracts and options thereon discussed previously. By
    entering into currency futures and options thereon, the Fund
    will seek to establish the rate at which it will be entitled to
    exchange U.S.&#160;dollars for another currency at a future
    time. By selling currency futures, the Fund will seek to
    establish the number of dollars it will receive at delivery for
    a certain amount of a foreign currency. In this way, whenever
    the Fund anticipates a decline in the value of a foreign
    currency against the U.S.&#160;dollar, the Fund can attempt to
    &#147;lock in&#148; the U.S.&#160;dollar value of some or all of
    the securities held in its portfolio that are denominated in
    that currency. By purchasing currency futures, the Fund can
    establish the number of dollars it will be required to pay for a
    specified amount of a foreign currency in a future month. Thus,
    if the Fund intends to buy securities in the future and expects
    the U.S.&#160;dollar to decline against the relevant foreign
    currency during the period before the purchase is effected, the
    Fund can attempt to &#147;lock in&#148; the price in
    U.S.&#160;dollars of the securities it intends to acquire.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The purchase of options on currency futures will allow the Fund,
    for the price of the premium and related transaction costs it
    must pay for the option, to decide whether or not to buy (in the
    case of a call option) or to sell (in the case of a put option)
    a futures contract at a specified price at any time during the
    period before the option expires. If the Investment Adviser, in
    purchasing an option, has been correct in its judgment
    concerning the direction in which the price of a foreign
    currency would move against the U.S.&#160;dollar, the Fund may
    exercise the option and thereby take a futures position to hedge
    against the risk it had correctly anticipated or close out the
    option position at a gain that will offset, to some extent,
    currency exchange losses otherwise suffered by the Fund. If
    exchange rates move in a way the Fund did not anticipate,
    however, the Fund will have incurred the expense of the option
    without obtaining the expected benefit; any such movement in
    exchange rates may also thereby reduce rather than enhance the
    Fund&#146;s profits on its underlying securities transactions.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Securities Index Futures Contracts and Options
    Thereon.</I>&#160;&#160;Purchases or sales of securities index
    futures contracts are used for hedging purposes to attempt to
    protect the Fund&#146;s current or intended investments from
    broad fluctuations in stock or bond prices. For example, the
    Fund may sell securities index futures contracts in anticipation
    of or during a market decline to attempt to offset the decrease
    in market value of the Fund&#146;s securities portfolio that
    might otherwise result. If such decline occurs, the loss in
    value of portfolio securities may be offset, in whole or part,
    by gains on the futures position. When the Fund is not fully
    invested in the securities market and anticipates a significant
    market advance, it may purchase securities index futures
    contracts in order to gain rapid market exposure that may, in
    part or entirely, offset increases in the cost of securities
    that the Fund intends to purchase. As such purchases are made,
    the corresponding positions in securities index futures
    contracts will be closed out. The Fund may write put and call
    options on securities index futures contracts for hedging
    purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Limitations on the Purchase and Sale of Futures Contracts and
    Options on Futures Contracts.</I>&#160;&#160;Subject to the
    guidelines of the Board, the Fund may engage in transactions in
    futures contracts and options hereon only for bona fide hedging,
    yield enhancement and risk management purposes, in each case in
    accordance with the rules and regulations of the CFTC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Regulations of the CFTC applicable to the Fund permit the
    Fund&#146;s futures and options on futures transactions to
    include (i)&#160;bona fide hedging transactions without regard
    to the percentage of the Fund&#146;s assets committed to margin
    and option premiums and (ii)&#160;non-hedging transactions,
    provided that the Fund not enter into such non-hedging
    transactions if, immediately thereafter, the sum of the amount
    of initial margin deposits on the Fund&#146;s existing futures
    positions and option premiums would exceed 5% of the market
    value of the Fund&#146;s liquidating value, after taking into
    account unrealized profits and unrealized losses on any such
    transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition, investment in future contracts and related options
    generally will be limited by the rating agency guidelines
    applicable to any of the Fund&#146;s outstanding preferred
    shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Forward Foreign Currency Exchange
    Contracts.</I>&#160;&#160;The Fund may enter into forward
    foreign currency exchange contracts to protect the value of its
    portfolio against uncertainty in the level of future currency
    exchange rates between a particular foreign currency and the
    U.S.&#160;dollar or between foreign currencies in which its
    securities are or may be denominated. The Fund may enter into
    such contracts on a spot, i.e., cash, basis at the rate then
    prevailing in the currency exchange market or on a forward
    basis, by entering into a forward contract to purchase or sell
    currency. A forward contract on foreign currency is an
    obligation to purchase or sell a specific currency at a future
    date, which may be any fixed number of days agreed upon by the
    parties from the date of the contract at a price set on the date
    of the contract. Forward currency contracts (i)&#160;are traded
    in a market conducted directly between currency traders
    (typically, commercial banks or other financial institutions)
    and their customers, (ii)&#160;generally have no deposit
    requirements and (iii)&#160;are typically consummated without
    payment of any commissions. The Fund, however, may enter into
    forward currency contracts requiring deposits or involving the
    payment of commissions. To assure that its forward currency
    contracts are not used to achieve investment leverage, the Fund
    will segregate liquid assets consisting of cash,
    U.S.&#160;Government Securities or other liquid securities with
    its custodian, or a designated
    <FONT style="white-space: nowrap">sub-custodian,</FONT>
    in an amount at all times equal to or exceeding its commitment
    with respect to the contracts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The dealings of the Fund in forward foreign exchange are limited
    to hedging involving either specific transactions or portfolio
    positions. Transaction hedging is the purchase or sale of one
    forward foreign currency for another currency with respect to
    specific receivables or payables of the Fund accruing in
    connection with the purchase and sale of its portfolio
    securities or its payment of distributions. Position hedging is
    the purchase or sale of one forward foreign currency for another
    currency with respect to portfolio security positions
    denominated or quoted in the foreign currency to offset the
    effect of an anticipated substantial appreciation or
    depreciation, respectively, in the value of the currency
    relative to the U.S.&#160;dollar. In this situation, the Fund
    also may, for example, enter into a forward contract to sell or
    purchase a different foreign currency for a fixed
    U.S.&#160;dollar amount where it is believed that the
    U.S.&#160;dollar value of the currency to be sold or bought
    pursuant to the forward contract will fall or rise, as the case
    may be, whenever there is a
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    decline or increase, respectively, in the U.S.&#160;dollar value
    of the currency in which its portfolio securities are
    denominated (this practice being referred to as a
    &#147;cross-hedge&#148;).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In hedging a specific transaction, the Fund may enter into a
    forward contract with respect to either the currency in which
    the transaction is denominated or another currency deemed
    appropriate by the Investment Adviser. The amount the Fund may
    invest in forward currency contracts is limited to the amount of
    its aggregate investments in foreign currencies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The use of forward currency contracts may involve certain risks,
    including the failure of the counterparty to perform its
    obligations under the contract, and such use may not serve as a
    complete hedge because of an imperfect correlation between
    movements in the prices of the contracts and the prices of the
    currencies hedged or used for cover. The Fund will only enter
    into forward currency contracts with parties which it believes
    to be creditworthy institutions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Under current interpretations of the SEC and its staff under the
    1940 Act, the Fund must segregate with its custodian liquid
    assets, or engage in other SEC or staff approved measures, to
    &#147;cover&#148; open positions in certain types of derivative
    instruments. The purpose of these requirements is to prevent the
    Fund from incurring excessive leverage through such instruments.
    In the case of futures and forward contracts, for example, that
    are not required as a result of one or more contractual
    arrangements to settle for cash only in an amount equal to the
    change in value of the contract over its term but rather may
    settle through physical delivery or in the notional amount, the
    Fund must segregate liquid assets equal to such contract&#146;s
    full notional value while its position is open. With respect to
    contracts that the Fund is contractionally obligated to settle
    for cash in an amount equal to the change in value of the
    contract, the Fund needs to segregate liquid assets only in an
    amount equal to the Fund&#146;s unpaid mark to market obligation
    rather than the entire notional amount. This is because the
    Fund&#146;s maximum potential obligation at that point in time
    is its net unpaid mark to market obligation rather than the full
    notional amount.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Securities of Investment Companies.</I>&#160;&#160;To the
    extent permitted by law, the Fund may invest in investment
    company securities, including preferred shares and the common
    equity of such companies. Investments in the common equity of
    investment companies will cause the Fund to bear a ratable share
    of any such investment company&#146;s expenses, including
    management fees. The Fund will also remain obligated to pay
    management fees to the Investment Adviser with respect to the
    assets invested in any securities of another investment company.
    In these circumstances, holders of the Fund&#146;s common shares
    will be subject to duplicative investment expenses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Warrants and Rights.</I>&#160;&#160;The Fund may invest
    without limit in warrants or rights (including those acquired in
    units or attached to other securities) that entitle the holder
    to buy equity securities at a specific price for a specific
    period of time but will do so only if such equity securities are
    deemed appropriate by the Investment Adviser for inclusion in
    the Fund&#146;s portfolio.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Asset-Backed and Mortgage-Backed
    Securities.</I>&#160;&#160;The Fund may invest in asset-backed
    and mortgage-backed securities. Mortgage-backed securities
    represents ownership of an undivided interest in a pool of
    mortgages. Aggregate principal and interest payments received
    from the pool are used to pay principal and interest on a
    mortgage-backed security. Asset-backed securities are similar to
    mortgage-backed securities except they represent ownership in a
    pool of notes or receivables on assets other than real estate,
    such as loans, leases, credit card receivables or royalties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Loans of Portfolio Securities.</I>&#160;&#160;Consistent with
    applicable regulatory requirements and the Fund&#146;s
    investment restrictions, the Fund may lend its portfolio
    securities to securities broker-dealers or financial
    institutions, provided that such loans are callable at any time
    by the Fund (subject to notice provisions described below), and
    are at all times supported by cash or cash equivalents, which
    are maintained for the benefit of the Fund in a segregated
    account pursuant to applicable regulations and that are at least
    equal to the market value, determined daily, of the loaned
    securities. The advantage of such loans is that the Fund
    continues to receive the income on the loaned securities while
    at the same time earns interest on the cash
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    amounts deposited as collateral, which will be invested in
    short-term obligations. The Fund&#146;s loans of portfolio
    securities will be collateralized in accordance with applicable
    regulatory requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A loan may generally be terminated by the borrower on one
    business day notice, or by the Fund on five business days
    notice. If the borrower fails to deliver the loaned securities
    within five days after receipt of notice, the Fund could use the
    collateral to replace the securities while holding the borrower
    liable for any excess of replacement cost over collateral. As
    with any extensions of credit, there are risks of delay in
    recovery and in some cases even loss of rights in the collateral
    should the borrower of the securities violate the terms of the
    loan or fail financially. However, these loans of portfolio
    securities will only be made to firms deemed by the Fund&#146;s
    management to be creditworthy and when the income which can be
    earned from such loans justifies the attendant risks. The Board
    will oversee the creditworthiness of the contracting parties on
    an ongoing basis. Upon termination of the loan, the borrower is
    required to return the securities to the Fund. Any gain or loss
    in the market price during the loan period would inure to the
    Fund. The risks associated with loans of portfolio securities
    are substantially similar to those associated with repurchase
    agreements. Thus, if the counter party to the loan petitions for
    bankruptcy or becomes subject to the United States Bankruptcy
    Code, the law regarding the rights of the Fund is unsettled. As
    a result, under extreme circumstances, there may be a
    restriction on the Fund&#146;s ability to sell the collateral
    and the Fund would suffer a loss. When voting or consent rights
    which accompany loaned securities pass to the borrower, the Fund
    will follow the policy of calling the loaned securities, to be
    delivered within one day after notice, to permit the exercise of
    such rights if the matters involved would have a material effect
    on the Fund&#146;s investment in such loaned securities. The
    Fund will pay reasonable finder&#146;s, administrative and
    custodial fees in connection with a loan of its securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Repurchase Agreements.</I>&#160;&#160;The Fund may engage in
    repurchase agreements as set forth in the Prospectus. A
    repurchase agreement is an instrument under which the purchaser,
    i.e., the Fund, acquires a debt security and the seller agrees,
    at the time of the sale, to repurchase the obligation at a
    mutually agreed upon time and price, thereby determining the
    yield during the purchaser&#146;s holding period. This results
    in a fixed rate of return insulated from market fluctuations
    during such period. The underlying securities are ordinarily
    U.S.&#160;Treasury or other government obligations or high
    quality money market instruments. The Fund will require that the
    value of such underlying securities, together with any other
    collateral held by the Fund, always equals or exceeds the amount
    of the repurchase obligations of the counter party. The
    Fund&#146;s risk is primarily that, if the seller defaults, the
    proceeds from the disposition of the underlying securities and
    other collateral for the seller&#146;s obligation are less than
    the repurchase price. If the seller becomes insolvent, the Fund
    might be delayed in or prevented from selling the collateral. In
    the event of a default or bankruptcy by a seller, the Fund will
    promptly seek to liquidate the collateral. To the extent that
    the proceeds from any sale of such collateral upon a default in
    the obligation to repurchase are less than the repurchase price,
    the Fund will experience a loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the financial institution which is a party to the repurchase
    agreement petitions for bankruptcy or becomes subject to the
    United States Bankruptcy Code, the law regarding the rights of
    the Fund is unsettled. As a result, under extreme circumstances,
    there may be a restriction on the Fund&#146;s ability to sell
    the collateral and the Fund would suffer a loss.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Additional
    Risks Relating to Derivative Investments</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Special Risk Considerations Relating to Futures and Options
    Thereon.</I>&#160;&#160;The Fund&#146;s ability to establish and
    close out positions in futures contracts and options thereon
    will be subject to the development and maintenance of liquid
    markets. Although the Fund generally will purchase or sell only
    those futures contracts and options thereon for which there
    appears to be a liquid market, there is no assurance that a
    liquid market on an exchange will exist for any particular
    futures contract or option thereon at any particular time. In
    the event no liquid market exists for a particular futures
    contract or option thereon in which the Fund maintains a
    position, it will not be possible to effect a closing
    transaction in that contract or to do so at a satisfactory price
    and the Fund would have to either make or take delivery under
    the futures contract or, in the case of a written option, wait
    to sell the underlying securities until the option expires or is
    exercised or, in the case of a purchased option, exercise the
    option. In the case of a futures contract or an option thereon
    which the Fund
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    has written and which the Fund is unable to close, the Fund
    would be required to maintain margin deposits on the futures
    contract or option thereon and to make variation margin payments
    until the contract is closed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Successful use of futures contracts and options thereon and
    forward contracts by the Fund is subject to the ability of the
    Investment Adviser to predict correctly movements in the
    direction of interest and foreign currency rates. If the
    Investment Adviser&#146;s expectations are not met, the Fund
    will be in a worse position than if a hedging strategy had not
    been pursued. For example, if the Fund has hedged against the
    possibility of an increase in interest rates that would
    adversely affect the price of securities in its portfolio and
    the price of such securities increases instead, the Fund will
    lose part or all of the benefit of the increased value of its
    securities because it will have offsetting losses in its futures
    positions. In addition, in such situations, if the Fund has
    insufficient cash to meet daily variation margin requirements,
    it may have to sell securities to meet the requirements. These
    sales may be, but will not necessarily be, at increased prices
    which reflect the rising market. The Fund may have to sell
    securities at a time when it is disadvantageous to do so.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Additional Risks of Foreign Options, Futures Contracts,
    Options on Futures Contracts and Forward
    Contracts</I>.&#160;&#160;Options, futures contracts and options
    thereon and forward contracts on securities and currencies may
    be traded on foreign exchanges. Such transactions may not be
    regulated as effectively as similar transactions in the United
    States, may not involve a clearing mechanism and related
    guarantees, and are subject to the risk of governmental actions
    affecting trading in, or the prices of, foreign securities. The
    value of such positions also could be adversely affected by
    (i)&#160;other complex foreign political, legal and economic
    factors, (ii)&#160;lesser availability than in the United States
    of data on which to make trading decisions, (iii)&#160;delays in
    the Fund&#146;s ability to act upon economic events occurring in
    the foreign markets during non-business hours in the United
    States, (iv)&#160;the imposition of different exercise and
    settlement terms and procedures and margin requirements than in
    the United States and (v)&#160;lesser trading volume.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Exchanges on which options, futures and options on futures are
    traded may impose limits on the positions that the Fund may take
    in certain circumstances.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Swaps.</I>&#160;&#160;The Fund may enter into total rate of
    return, credit default or other types of swaps and related
    derivatives for the purpose of hedging and risk management.
    These transactions generally provide for the transfer from one
    counterparty to another of certain risks inherent in the
    ownership of a financial asset such as a common stock or debt
    instrument. Such risks include, among other things, the risk of
    default and insolvency of the obligor of such asset, the risk
    that the credit of the obligor or the underlying collateral will
    decline or the risk that the common stock of the underlying
    issuer will decline in value. The transfer of risk pursuant to a
    derivative of this type may be complete or partial, and may be
    for the life of the related asset or for a shorter period. These
    derivatives may be used as a risk management tool for a pool of
    financial assets, providing the Fund with the opportunity to
    gain or reduce exposure to one or more reference securities or
    other financial assets (each, a &#147;Reference Asset&#148;)
    without actually owning or selling such assets in order, for
    example, to increase or reduce a concentration risk or to
    diversify a portfolio. Conversely, these derivatives may be used
    by the Fund to reduce exposure to an owned asset without
    selling&#160;it.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Because the Fund would not own the Reference Assets, the Fund
    may not have any voting rights with respect to the Reference
    Assets, and in such cases all decisions related to the obligors
    or issuers of the Reference Assets, including whether to
    exercise certain remedies, will be controlled by the swap
    counterparties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Total rate of return swaps and similar derivatives are subject
    to many risks, including the possibility that the market will
    move in a manner or direction that would have resulted in gain
    for the Fund had the swap or other derivative not been utilized
    (in which case it would have been better had the Fund not
    engaged in the interest rate hedging transactions), the risk of
    imperfect correlation between the risk sought to be hedged and
    the derivative transactions utilized, the possible inability of
    the counterparty to fulfill its obligations under the swap and
    potential illiquidity of the hedging instrument utilized, which
    may make it difficult for the Fund to close out or unwind one or
    more hedging transactions.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    14
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Total rate of return swaps and related derivatives are a
    relatively recent development in the financial markets.
    Consequently, there are certain legal, tax and market
    uncertainties that present risks in entering into such
    arrangements. There is currently little or no case law or
    litigation characterizing total rate of return swaps or related
    derivatives, interpreting their provisions, or characterizing
    their tax treatment. In addition, additional regulations and
    laws may apply to these types of derivatives that have not
    previously been applied. There can be no assurance that future
    decisions construing similar provisions to those in any swap
    agreement or other related documents or additional regulations
    and laws will not have an adverse effect on the Fund that
    utilizes these instruments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Risks of Currency Transactions.</I>&#160;&#160;Currency
    transactions are also subject to risks different from those of
    other portfolio transactions. Because currency control is of
    great importance to the issuing governments and influences
    economic planning and policy, purchases and sales of currency
    and related instruments can be adversely affected by government
    exchange controls, limitations or restrictions on repatriation
    of currency, and manipulation, or exchange restrictions imposed
    by governments. These forms of governmental action can result in
    losses to the Fund if it is unable to deliver or receive
    currency or monies in settlement of obligations and could also
    cause hedges it has entered into to be rendered useless,
    resulting in full currency exposure and incurring transaction
    costs.
</DIV>

<A name='Y91316127'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">INVESTMENT
    RESTRICTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The investment restrictions listed below have been adopted by
    the Fund as fundamental policies, except as otherwise indicated.
    Under the 1940 Act, a fundamental policy may not be changed
    without the vote of a majority of the outstanding voting
    securities of the Fund and the vote of a majority of the
    preferred shares, voting as a single class, as defined in the
    1940 Act. Such a majority is defined as the lesser of
    (i)&#160;67% or more of the shares present at a meeting of
    stockholders, if the holders of 50% of the outstanding shares of
    the Fund are present or represented by proxy or (ii)&#160;more
    than 50% of the outstanding shares of the Fund. The Fund may not:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    purchase the securities of any one issuer, other than the United
    States government or any of its agencies or instrumentalities,
    if immediately after such purchase more than 5% of the value of
    its total assets would be invested in such issuer or the Fund
    would own more than 10% of the outstanding voting securities of
    such issuer, except that up to 25% of the value of the
    Fund&#146;s total assets may be invested without regard to such
    5% and 10% limitations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    purchase or otherwise acquire real estate or interests therein,
    although the Fund may purchase securities of issuers which
    engage in real estate operations and securities secured by real
    estate or interests therein;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    purchase or otherwise acquire or sell commodities or commodity
    contracts except that the Fund may purchase or sell financial
    futures contracts and related options thereon;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    purchase oil, gas or other mineral leases, rights or royalty
    contracts, or exploration or development programs, except that
    the Fund may invest in the securities of companies which
    operate, invest in, or sponsor such programs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    purchase securities of other investment companies, except in
    connection with a merger, consolidation, reorganization or
    acquisition of assets, except that the Fund reserves the right
    to invest up to 5% of its total assets in not more than 3% of
    the securities of any one investment company including small
    business investment companies or invest up to 10% of its total
    assets in the securities of investment companies, nor make any
    such investments other than through purchases in the open market
    where to the best information of the Fund no commission or
    profit to a sponsor or dealer (other than the customary
    broker&#146;s commission) results from such purchase;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    issue senior securities except to the extent permitted by
    applicable law;
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    15
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make loans of money or securities, except: (a)&#160;that the
    Fund may engage in repurchase agreements as set forth in the
    Prospectus and (b)&#160;the Fund may lend its portfolio
    securities consistent with applicable regulatory requirements
    and as set forth in the Prospectus;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    make short sales of securities or maintain a short position,
    unless at all times when a short position is open, it either
    owns an equal amount of such securities or owns securities
    which, without payment of any further consideration, are
    convertible into or exchangeable for securities of the same
    issue as, and equal in amount to, the securities sold short;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    engage in the underwriting of securities, except insofar as the
    Fund may be deemed an underwriter under the Securities Act of
    1933, as amended, in disposing of a portfolio security;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    invest for the purpose of exercising control or management of
    any other issuer;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    invest more than 25% of the value of its total assets in any one
    industry.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If a percentage restriction is adhered to at the time of
    investment, a later increase or decrease in percentage resulting
    from a change in values of portfolio securities or amount of
    total or net assets will not be considered a violation of any of
    the foregoing restrictions.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    16
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='Y91316128'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT
    OF THE FUND</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Directors
    and Officers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Overall responsibility for management and supervision of the
    Fund rests with its Board. The Board approves all significant
    agreements between the Fund and the companies that furnish the
    Fund with services, including agreements with the Investment
    Adviser, the Fund&#146;s custodian and the Fund&#146;s transfer
    agent. The
    <FONT style="white-space: nowrap">day-to-day</FONT>
    operations of the Fund are delegated to the Investment Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The names and business addresses of the Directors and principal
    officers of the Fund are set forth in the following table,
    together with their positions and their principal occupations
    during the past five years and, in the case of the directors,
    their positions with certain other organizations and companies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="20%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="9%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="26%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="8%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="8%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Directorships<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Portfolios<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Term of Office <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Held by <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>in Fund
    Complex<SUP style="font-size: 85%; vertical-align: top">(3)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>and Length of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Principal Occupation(s)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Directors During Past <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Overseen by<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name, Position(s)
    Address<SUP style="font-size: 85%; vertical-align: top">(l)</SUP>

    and Age</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Time
    Served<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>During Past Five Years</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Five Years</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Director</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD colspan="11" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B>Interested
    Director/Nominee<SUP style="font-size: 85%; vertical-align: top">(4)</SUP>:</B>

</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Mario J. Gabelli <BR>
    Chairman and Chief<BR>
    Investment Officer<BR>
    Age: 68
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 1989<BR>
    ***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Chairman, Chief Executive Officer, and Chief Investment
    Officer&#160;&#151; Value Portfolios of GAMCO Investors, Inc.
    and Chief Investment Officer&#160;&#151; Value Portfolios of
    Gabelli Funds, LLC and GAMCO Asset Management Inc.;
    Director/Trustee or Chief Investment Officer of other registered
    investment companies in the Gabelli/GAMCO Funds Complex; Chief
    Executive Officer of GGCP, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Director of Morgan Group Holdings, Inc. (holding company);
    Chairman of the Board and Chief Executive Officer of LICT Corp.
    (multimedia and communication services company); Director of
    CIBL, Inc. (broadcasting and wireless communications); Director
    of RLJ Acquisition, Inc. (blank check company)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    26
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="11" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B>Independent
    Directors/Nominees<SUP style="font-size: 85%; vertical-align: top">(5)</SUP>:</B>

</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    E. Val Cerutti <BR>
    Director<BR>
    Age: 71
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 1989<BR>
    **
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Chief Executive Officer of Cerutti Consultants, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Director of The LGL Group, Inc. (diversified manufacturing)
    (1990-2009)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    7
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Anthony J.
    Colavita<SUP style="font-size: 85%; vertical-align: top">(6)<BR>

    </SUP>Director<BR>
    Age: 75
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 1989*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    President of the law firm of Anthony J. Colavita,&#160;P.C.
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    &#151;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    34
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Dugald A. Fletcher<BR>
    Director<BR>
    Age: 81
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 1989<BR>
    **
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    President of Fletcher &#038; Company, Inc.
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Director of Harris and Harris Group, Inc. (venture capital)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    2
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Anthony R. Pustorino <BR>
    Director<BR>
    Age: 85
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 1989<BR>
    **
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Certified Public Accountant; Professor Emeritus, Pace University
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Director of The LGL Group, Inc. (diversified manufacturing)
    (2002-2010)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    13
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Werner J.
    Roeder<SUP style="font-size: 85%; vertical-align: top">(6)<BR>

    </SUP>Director<BR>
    Age: 70
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 2001<BR>
    ***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Medical Director of Lawrence Hospital and practicing private
    physician
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    &#151;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    22
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    17
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
<!-- XBRL Table Pagebreak -->

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="20%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="9%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="26%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="8%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="14%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
    <TD width="8%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=05 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=05 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=05 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B> Directorships<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Portfolios<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Term of Office <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Held by <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>in Fund
    Complex<SUP style="font-size: 85%; vertical-align: top">(3)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>and Length of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Principal Occupation(s)<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Directors During Past <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Overseen by<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name, Position(s)
    Address<SUP style="font-size: 85%; vertical-align: top">(l)</SUP>

    and Age</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Time
    Served<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>During Past Five Years</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Five Years</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Director</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Anthonie C. van Ekris<BR>
    Director<BR>
    Age: 76
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 1992*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Chairman and Chief Executive Officer of BALMAC International,
    Inc. (commodities and futures trading)
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Director of Avrado Energy Inc. (oil and gas operations) through
    2005
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    20
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Salvatore J. Zizza<BR>
    Director<BR>
    Age: 65
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 1991*
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Chairman of Zizza &#038; Co., Ltd. (private holding company)
    since 1978; Chairman of Metropolitan Paper Recycling Inc.
    (recycling) since 2006; Chairman of BAM Inc. (manufacturing);
    Chairman of
    <FONT style="white-space: nowrap">E-Corp</FONT>
    English (global English instruction for corporate personnel)
    since 2009
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Non-executive Chairman and Director of Harbor BioSciences, Inc.
    (biotechnology); Vice- Chairman and Director of Trans- Lux
    Corporation (business services); Chairman, Chief Executive
    Officer, and Director of General Employment Enterprises, Inc.
    (staffing); Director of Bion Environmental Technologies
    (technology) (2005-2008); Director of Earl Scheib Inc.
    (automotive painting) through April 2009
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    28
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="29%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="16%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="53%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
    <B>Name, Position(s)
    Address<SUP style="font-size: 85%; vertical-align: top">(1)<BR>

    </SUP></B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Term of Office and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Principal Occupation(s)<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>and Age</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Length of Time
    Served<SUP style="font-size: 85%; vertical-align: top">(2)</SUP></B>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>During Past Five Years</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    <B>Officers<SUP style="font-size: 85%; vertical-align: top">(7)</SUP>:</B>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Bruce N. Alpert<BR>
    President<BR>
    Age: 59
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 2003
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Executive Vice President and Chief Operating Officer of Gabelli
    Funds, LLC since 1988; Officer of all of the registered
    investment companies in the Gabelli/GAMCO Funds Complex.
    Director of Teton Advisors, Inc. since 1998; Chairman of Teton
    Advisors, Inc. 2008 to 2010; President of Teton Advisors, Inc.
    1998 to 2008; Senior Vice President of GAMCO Investors, Inc.
    since 2008
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Peter D. Goldstein<BR>
    Chief Compliance Officer<BR>
    Age: 58
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 2004
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Director of Regulatory Affairs at GAMCO Investors, Inc. since
    2004; Chief Compliance Officer of all of the registered
    investment companies in the Gabelli/GAMCO Funds Complex
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Christopher Haydon<BR>
    Ombudsman<BR>
    Age: 28
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 2010
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Institutional sales representative 2007 through 2009; employed
    at Cendant Corporation 2005 through 2006
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Laurissa M. Martire<BR>
    Vice President<BR>
    Age: 34
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 2004
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Vice President or Ombudsman of the Fund since 2004; Vice
    President or Ombudsman of other closed-end funds in the
    Gabelli/GAMCO Funds Complex; Assistant Vice President of GAMCO
    Investors, Inc. since 2003
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Agnes Mullady<BR>
    Treasurer and Secretary<BR>
    Age: 52
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    Since 2006
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    President and Chief Operating Officer of the Open-End Fund
    Division of Gabelli Funds, LLC since September 2010; Senior Vice
    President of GAMCO Investors, Inc. since 2009; Vice President of
    Gabelli Funds, LLC since 2007; Officer of all of the registered
    investment companies in the Gabelli/GAMCO Funds Complex
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    18
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    Address: One Corporate Center, Rye, NY
    <FONT style="white-space: nowrap">10580-1422.</FONT></TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    The Fund&#146;s Board of Directors is divided into three
    classes, each class having a term of three years. Each year the
    term of office of one class expires and the successor or
    successors elected to such class serve for a three year term.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    The &#147;Fund&#160;Complex&#148; or the &#147;Gabelli/GAMCO
    Funds Complex&#148; includes all the registered funds that are
    considered part of the same fund complex as the Fund because
    they have common or affiliated investment advisers.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    &#147;Interested person&#148; of the Fund as defined in the 1940
    Act. Mr.&#160;Gabelli is considered an &#147;interested
    person&#148; of the Fund because of his affiliation with
    Fund&#146;s Adviser and Gabelli&#160;&#038; Company, Inc., which
    executes portfolio transactions for the Fund, and as a
    controlling shareholder because of the level of his ownership of
    shares of Common Stock of the Fund.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Directors who are not considered to be &#147;interested
    persons&#148; of the Fund as defined in the 1940 Act are
    considered to be &#147;Independent&#148; Directors.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Director elected solely by holders of the Fund&#146;s Preferred
    Stock.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    Each officer will hold office for an indefinite term until the
    date he or she resigns or retires or until his or her successor
    is elected and qualified.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    *&#160;</TD>
    <TD></TD>
    <TD valign="bottom">
    &#151;&#160;Term expires at the Fund&#146;s 2011 Annual Meeting
    of Shareholders or until their successors are duly elected and
    qualified.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    &#151;&#160;Term expires at the Fund&#146;s 2012 Annual Meeting
    of Shareholders or until their successors are duly elected and
    qualified.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    *** </TD>
    <TD></TD>
    <TD valign="bottom">
    &#151;&#160;Term expires at the Fund&#146;s 2013 Annual Meeting
    of Shareholders or until their successors are duly elected and
    qualified.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Board believes that each Director&#146;s experience,
    qualifications, attributes or skills on an individual basis and
    in combination with those of other Directors lead to the
    conclusion that each Director should serve in such capacity.
    Among the attributes or skills common to all Directors are their
    ability to review critically and to evaluate, question and
    discuss information provided to them, to interact effectively
    with the other Directors, the Adviser, the
    <FONT style="white-space: nowrap">sub-administrator,</FONT>
    other service providers, counsel and the Fund&#146;s independent
    registered public accounting firm, and to exercise effective and
    independent business judgment in the performance of their duties
    as Directors. Each Director&#146;s ability to perform
    <FONT style="white-space: nowrap">his/her</FONT>
    duties effectively has been attained in large part through the
    Director&#146;s business, consulting or public service positions
    and through experience from service as a member of the Board and
    one or more of the other funds in the Gabelli/GAMCO
    Fund&#160;Complex, public companies, or non-profit entities, or
    other organizations as set forth above and below. Each
    Director&#146;s ability to perform
    <FONT style="white-space: nowrap">his/her</FONT>
    duties effectively also has been enhanced by education,
    professional training, and experience.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Mario J. Gabelli.</I>&#160;&#160;Mr.&#160;Gabelli is Chairman
    of the Board of Directors and Chief Investment Officer of the
    Fund. Mr.&#160;Gabelli is a member of the Fund&#146;s <I>ad hoc
    </I>Pricing Committee (described below under
    &#147;Directors&#160;&#151; Leadership Structure and Oversight
    Responsibilities&#148;). He also currently serves as Chairman of
    the boards of other funds in the Fund&#160;Complex.
    Mr.&#160;Gabelli is Chairman, Chief Executive Officer, and Chief
    Investment Officer-Value Portfolios of GAMCO Investors, Inc.
    (&#147;GAMCO&#148;), a NYSE listed investment advisory firm. He
    is also the Chief Investment Officer of Value Portfolios of
    Gabelli Funds, LLC and GAMCO Asset Management, Inc., each of
    which are asset management subsidiaries of GAMCO. In addition,
    Mr.&#160;Gabelli is Chief Executive Officer and a director and
    the controlling shareholder of GGCP, Inc., an investment holding
    company that holds a majority interest in GAMCO.
    Mr.&#160;Gabelli also sits on the boards of other publicly
    traded companies and private firms and various charitable
    foundations and educational institutions, including the Board of
    Trustees of Boston College and Roger Williams University and
    Board of Overseers of Columbia University Graduate School of
    Business. Mr.&#160;Gabelli received his Bachelors degree from
    Fordham University and his Masters of Business Administration
    from Columbia University Graduate School of Business.
</DIV>
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    <BR>
    19
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>E.&#160;Val Cerutti.</I>&#160;&#160;Mr.&#160;Cerutti is Chief
    Executive Officer of Cerutti Consultants, Inc. Mr.&#160;Cerutti
    is a member of the Fund&#146;s Proxy Voting Committee. He is a
    member of the board of other funds in the Fund&#160;Complex. He
    formerly served as Director of The LGL Group, Inc., a
    diversified manufacturing company. He was President and Chief
    Operating Officer of Stella D&#146;oro Biscuit Co., and served
    on the board of advisers of the Hagan School of Business of Iona
    College. He has served as a consultant to several venture
    capital groups. Mr.&#160;Cerutti has a Bachelor of Science
    degree from Fordham University and a Masters degree in Business
    Administration from Iona College.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Anthony J.
    Colavita,&#160;Esq.</I>&#160;&#160;Mr.&#160;Colavita is a
    practicing attorney with over forty-nine years of experience,
    including the field of business law. He is the Chair of the
    Fund&#146;s Nominating Committee and a member of the Fund&#146;s
    Audit Committee. Mr.&#160;Colavita also serves on comparable or
    other board committees with respect to other funds in the
    Fund&#160;Complex on whose boards he sits. Mr.&#160;Colavita
    also serves as a Trustee of a charitable remainder unitrust. He
    formerly served as a Commissioner of the New York State Thruway
    Authority and as a Commissioner of the New York State Bridge
    Authority. He served for ten years as the elected Supervisor of
    the Town of Eastchester, New York, responsible for ten annual
    municipal budgets of approximately eight million dollars per
    year. Mr.&#160;Colavita formerly served as Special Counsel to
    the New York State Assembly for five years and as a Senior
    Attorney with the New York State Insurance Department. He is the
    former Chairman of the Westchester County Republican Party and
    the New York State Republican Party. Mr.&#160;Colavita received
    his Bachelor of Arts from Fairfield University and his Juris
    Doctor from Fordham University School of Law.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Dugald A. Fletcher.</I>&#160;&#160;Mr.&#160;Fletcher is
    president of Fletcher&#160;&#038; Company. Additionally, he
    currently serves as director of a venture capital firm.
    Mr.&#160;Fletcher is a member of the Fund&#146;s <I>ad hoc
    </I>Pricing Committee. He served as President and Director of
    Baker Weeks&#160;&#038; Co., Inc., a NYSE Member Firm, Senior
    Vice President of Booz-Allen&#160;&#038; Hamilton, Inc., a
    management consulting firm, President of Booz-Allen Acquisition
    Services, Director of Paine Webber, Inc., Executive Vice
    President of Paine, Webber, Jackson and Curtis, Inc. and Advisor
    to Gabelli/Rosenthal L P, a leveraged buyout fund. His
    industrial experience includes Chairman of Keller Industries,
    Inc., a building and consumer products company, Chairman of
    Binnings Building Products, Inc., and various positions with the
    United States Steel Corporation. Mr.&#160;Fletcher received his
    Bachelor of Arts from Harvard College, AB, and his Masters in
    Business Administration from Harvard Business School.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Anthony R. Pustorino.</I>&#160;&#160;Mr.&#160;Pustorino is a
    Certified Public Accountant (&#147;CPA&#148;) and Professor
    Emeritus of Pace University, with over fifty years of experience
    in public accounting. Mr.&#160;Pustorino is the lead independent
    Director and serves as Chairman of the Fund&#146;s Audit and
    Proxy Voting Committees and a member of both multi-fund <I>ad
    hoc </I>Compensation Committees. He has been designated the
    Fund&#146;s Audit Committee Financial Expert. He also serves on
    comparable committees of other boards in the Fund&#160;Complex.
    Mr.&#160;Pustorino was Chair of the Audit Committee and was a
    Director of The LGL Group, Inc., a diversified manufacturing
    company. He was previously the President and shareholder of a
    CPA firm and a Professor of accounting at both Fordham
    University and Pace University. He served as Chairman of the
    Board of Directors of the New York State Board of Public
    Accountancy and of the CPA Examination Review Board of the
    National Association of the State Board of Accountancy. He was
    Vice President and member of the Executive Committee of the New
    York State Society of CPAs, and was Chair or member of many of
    its technical committees. He was a member of the Council of the
    American Institute of CPAs. Mr.&#160;Pustorino is the recipient
    of numerous professional and teaching awards. He received a
    Bachelor of Science in Business from Fordham University and a
    Masters in Business Administration from New York University.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Werner J. Roeder.</I>&#160;&#160;Dr.&#160;Roeder is Vice
    President of Medical Affairs/Medical Director of Lawrence
    Hospital Center in Bronxville, New York. He has been a
    practicing surgeon for over forty-five years. As Vice President
    of Medical Affairs at Lawrence Hospital, he is actively involved
    in quality, personnel, and financial matters concerning the
    hospital&#146;s $140&#160;million budget. He is a member of the
    Fund&#146;s Nominating and Proxy Voting Committees and is a
    member of both multi-fund <I>ad hoc </I>Compensation Committees
    and also serves on comparable or other board committees with
    respect to other funds in the Fund&#160;Complex on whose boards
    he sits. Dr.&#160;Roeder is board certified as a surgeon by The
    American Board of Surgery and presently serves in a
</DIV>
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    <BR>
    20
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    consulting capacity to Empire Blue Cross/Blue Shield. He
    obtained his Doctor in Medicine from New York Medical College.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Anthonie C. van Ekris.</I>&#160;&#160;Mr. van Ekris has been
    the Chairman and Chief Executive Officer of a global
    import/export company for nineteen years. Mr. van Ekris serves
    on the boards of other funds in the Fund&#160;Complex and is a
    member of the Proxy Voting Committee of some funds in the
    Fund&#160;Complex. He has over fifty-five years of experience as
    Chairman
    <FONT style="white-space: nowrap">and/or</FONT> Chief
    Executive Officer of public and private companies involved in
    the international trading or commodity trading, and served in
    both of these capacities for nearly twenty years for a large
    public jewelry chain. Mr. van Ekris is a former Director of an
    oil and gas operations company and served on the boards of a
    number of public companies, and for more than 10&#160;years on
    the Advisory Board of the Salvation Army of Greater New York.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Salvatore J. Zizza.</I>&#160;&#160;Mr.&#160;Zizza is the
    Chairman of a financial consulting firm. He also serves as
    Chairman to other companies involved in manufacturing,
    recycling, and real estate. Mr.&#160;Zizza is a member of the
    Fund&#146;s Audit and Nominating Committees, is a member of the
    Fund&#146;s <I>ad ho</I>c Pricing Committee, and is a member of
    both multi-fund <I>ad hoc </I>Compensation Committees. He serves
    on comparable or other board committees, including as lead
    independent director, with respect to other funds in the
    Fund&#160;Complex on whose boards he sits. Besides serving on
    the boards of many funds within the Fund&#160;Complex, he is
    currently a director of three other public companies and
    previously served on the boards of several other public
    companies. He also previously served as the Chief Executive of a
    large NYSE listed construction company. Mr.&#160;Zizza received
    his Bachelor of Arts and his Master of Business Administration
    in Finance from St. John&#146;s University, which awarded him an
    Honorary Doctorate in Commercial Sciences.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Directors&#160;&#151;
    Leadership Structure and Oversight Responsibilities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Overall responsibility for general oversight of the Fund rests
    with the Board. The Board has appointed Mr.&#160;Pustorino as
    the lead independent Director. The lead independent Director
    presides over executive sessions of the Directors and also
    serves between meetings of the Board as a liaison with service
    providers, officers, counsel, and other Directors on a wide
    variety of matters including scheduling agenda items for Board
    meetings. Designation as such does not impose on the lead
    independent Director any obligations or standards greater than
    or different from other Directors. The Board has established a
    Nominating Committee and an Audit Committee to assist the Board
    in the oversight of the management and affairs of the Fund. The
    Board also has a Proxy Voting Committee that exercises
    beneficial ownership responsibilities on behalf of the Fund in
    selected situations. From time to time, the Board establishes
    additional committees or informal working groups, such as
    pricing committees related to securities offerings by the Fund,
    to address specific matters, or assigns one of its members to
    work with directors or trustees of other funds in the
    Gabelli/GAMCO Fund&#160;Complex on special committees or working
    groups that address complex-wide matters, such as the multi-fund
    <I>ad hoc </I>Compensation Committee relating to compensation of
    the Chief Compliance Officer for all the funds in the
    Fund&#160;Complex and a separate <I>ad hoc
    </I>multi-fund&#160;Compensation Committee relating to certain
    officers of the closed-end funds in the Fund&#160;Complex.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    All of the Fund&#146;s Directors other than Mr.&#160;Mario J.
    Gabelli are Independent Directors, and the Board believes they
    are able to provide effective oversight of the Fund&#146;s
    service providers. In addition to providing feedback and
    direction during Board meetings, the Directors meet regularly in
    executive session and chair all committees of the Board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s operations entail a variety of risks, including
    investment, administration, valuation, and a range of compliance
    matters. Although the Adviser, the
    <FONT style="white-space: nowrap">sub-administrator,</FONT>
    and the officers of the Fund are responsible for managing these
    risks on a day-
    <FONT style="white-space: nowrap">to-day</FONT> basis
    within the framework of their established risk management
    functions, the Board also addresses risk management of the Fund
    through its meetings and those of the committees and working
    groups. As part of its general oversight, the Board reviews with
    the Adviser at Board meetings the levels and types of risks
    being undertaken by the Fund, and the Audit Committee discusses
    the Fund&#146;s risk management and controls with the
    independent registered public accounting firm engaged by the
    Fund. The Board reviews valuation policies and procedures and
    the valuations of specific
</DIV>
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    <BR>
    21
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    illiquid securities. The Board also receives periodic reports
    from the Fund&#146;s Chief Compliance Officer regarding
    compliance matters relating to the Fund and its major service
    providers, including results of the implementation and testing
    of the Fund&#146;s and such providers&#146; compliance programs.
    The Board&#146;s oversight function is facilitated by management
    reporting processes designed to provide visibility to the Board
    regarding the identification, assessment, and management of
    critical risks, and the controls and policies and procedures
    used to mitigate those risks. The Board reviews its role in
    supervising the Fund&#146;s risk management from time to time
    and may make changes at its discretion at any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Board has determined that its leadership structure is
    appropriate for the Fund because it enables the Board to
    exercise informed and independent judgment over matters under
    its purview, allocates responsibility among committees in a
    manner that fosters effective oversight, and allows the Board to
    devote appropriate resources to specific issues in a flexible
    manner as they arise. The Board periodically reviews its
    leadership structure as well as its overall structure,
    composition, and functioning, and may make changes at its
    discretion at any time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Set forth in the table below is the dollar range of equity
    securities in the Fund beneficially owned by each Director and
    nominee for election as Director and the aggregate dollar range
    of equity securities in the Fund&#160;Complex beneficially owned
    by each Director and nominee for election as Director.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="62%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="13%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="9%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Aggregate Dollar Range<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>of Equity Securities <BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Dollar Range of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>in all Registered<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Equity<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Investment Companies <BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    <B>Securities in the<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>in the Gabelli Fund<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Director</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Fund*(1)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Complex* (1)(2)</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Interested Director:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Mario J. Gabelli
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    E
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    E
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Independent Directors:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    E. Val Cerutti**
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    E
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    E
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Anthony J. Colavita
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    E
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    E
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Dugald A. Fletcher
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    E
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    E
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Anthony R. Pustorino
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    C
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    E
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Werner J. Roeder
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    E
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    E
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Anthonie C. van Ekris**
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    B
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    E
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Salvatore J. Zizza
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
    E
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    E
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Key to Dollar Ranges</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A.&#160;None
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    B.&#160;$1&#160;&#151; $10,000
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    C.&#160;$10,001&#160;&#151; $50,000
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    D.&#160;$50,001&#160;&#151; $100,000
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    E.&#160;Over $100,000
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    All&#160;shares were valued as of December&#160;31, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    Mr. van Ekris beneficially owns less than 1% of the common stock
    of LICT Corp., having a value of $63,600 as of December&#160;31,
    2010. LICT Corp., may be deemed to be controlled by Mario J.
    Gabelli and in that event would be deemed to be under common
    control with the Fund&#146;s Adviser.</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    This information has been furnished by each Director as of
    December&#160;31, 2010. &#147;Beneficial Ownership&#148; is
    determined in accordance with
    <FONT style="white-space: nowrap">Rule&#160;16a-1(a)(2)</FONT>
    of the Securities Exchange Act of 1934, as amended (the
    &#147;1934&#160;Act&#148;).</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    The term &#147;Family of Investment Companies&#148; includes two
    or more registered funds that share the same investment adviser
    or principal underwriter and hold themselves out to investors as
    related companies for </TD>
</TR>
<!-- XBRL Paragraph Pagebreak -->

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    22
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    purposes of investment and investor services. Currently the
    registered funds that comprise the &#147;Fund&#160;Complex&#148;
    are identical to those that comprise the &#147;Family of
    Investment Companies.&#148;</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Directors serving on the Fund&#146;s Nominating Committee
    are Anthony J. Colavita (Chairman), Werner J. Roeder, and
    Salvatore J. Zizza. The Nominating Committee is responsible for
    recommending qualified candidates to the Board in the event that
    a position is vacated or created. The Nominating Committee would
    consider recommendations by shareholders if a vacancy were to
    exist. Such recommendations should be forwarded to the Secretary
    of the Fund. The Nominating Committee met once during the 2010
    fiscal year. The Fund does not have a standing compensation
    committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Anthony R. Pustorino (Chairman), Anthony J. Colavita, and
    Salvatore J. Zizza, who are not &#147;interested persons&#148;
    of the Fund as defined in the 1940 Act, serve on the Fund&#146;s
    Audit Committee. The Audit Committee is generally responsible
    for reviewing and evaluating issues related to the accounting
    and financial reporting policies and internal controls of the
    Fund and, as appropriate, the internal controls of certain
    service providers, overseeing the quality and objectivity of the
    Fund&#146;s financial statements and the audit thereof and to
    act as a liaison between the Board and the Fund&#146;s
    Independent Registered Public Accounting Firm. The Audit
    Committee met three times during the 2010 fiscal year.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Remuneration
    of Directors and Officers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund pays each Director who is not affiliated with the
    Adviser or its affiliates a fee of $5,000 per year plus $750 per
    Board meeting attended, $500 per standing Committee meeting
    attended, and $500 per telephonic meeting, together with the
    Director&#146;s actual
    <FONT style="white-space: nowrap">out-of-pocket</FONT>
    expenses relating to his attendance at such meetings. In
    addition, the lead independent Director receives an annual fee
    of $1,000, the Audit Committee Chairman receives an annual fee
    of $3,000 and the Nominating Committee Chairman receives an
    annual fee of $2,000. A director may receive a single meeting
    fee, allocated among the participating funds, for participation
    in certain meetings on behalf of multiple funds.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    23
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following table shows the compensation that the Directors
    earned in their capacity as Directors during the year ended
    December&#160;31, 2010. The table also shows, for the year ended
    December&#160;31, 2010, the compensation Directors earned in
    their capacity as directors for other funds in the Gabelli
    Fund&#160;Complex.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">COMPENSATION
    TABLE FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="68%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="10%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="13%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Total <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Compensation<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>from the Fund <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Aggregate<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>and <BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Compensation<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Fund Complex<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Person and Position</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>From the Fund</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Paid to Directors*</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Interested Director:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Mario J. Gabelli
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Director and Chief Investment Officer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    0
</TD>
<TD nowrap align="left" valign="bottom">
    (26)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Independent Directors:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    E. Val Cerutti
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    33,500
</TD>
<TD nowrap align="left" valign="bottom">
    (7)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Director
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Anthony J. Colavita
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    11,611
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    254,500
</TD>
<TD nowrap align="left" valign="bottom">
    (33)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Director
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Dugald A. Fletcher
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    19,500
</TD>
<TD nowrap align="left" valign="bottom">
    (2)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Director
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Anthony R. Pustorino
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    13,462
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    164,500
</TD>
<TD nowrap align="left" valign="bottom">
    (13)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Director
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Werner J. Roeder
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    120,500
</TD>
<TD nowrap align="left" valign="bottom">
    (22)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Director
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Anthonie C. van Ekris
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    8,250
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    124,000
</TD>
<TD nowrap align="left" valign="bottom">
    (19)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Director
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Salvatore J. Zizza
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    9,611
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    212,000
</TD>
<TD nowrap align="left" valign="bottom">
    (27)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Director
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Represents the total compensation paid to such persons during
    the fiscal year ended December&#160;31, 2010 by investment
    companies (including the Fund) or portfolios that are considered
    part of the same fund complex as the Fund because they have
    common or affiliated investment advisers. The number in
    parentheses represents the number of such investment companies
    and portfolios.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification
    of Officers and Directors; Limitations on Liability</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Subject to limitations imposed by the 1940 Act, the Fund&#146;s
    Charter limits the liability of the Fund&#146;s Directors and
    officers to the Fund and its stockholders to the fullest extent
    permitted by Maryland law. Under Maryland law, Maryland
    corporations may limit their directors&#146; and officers&#146;
    liability for money damages to the corporation and stockholders
    except to the extent (i)&#160;that it is proved that a director
    or officer actually received an improper benefit or profit in
    money, property or services, in which case such director or
    officer may be liable for the amount of the benefit or profit
    actually received or (ii)&#160;that a judgment or other final
    adjudication adverse to a director or officer is entered in a
    proceeding based on a finding that such director&#146;s or
    officer&#146;s action, or failure to act, was the result of
    active and deliberate dishonesty and was material to the cause
    of action adjudicated in the proceeding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Charter also provides for the indemnification of, and
    expenses to be advanced on behalf of, Directors and officers,
    among others, to the fullest extent permitted by Maryland law,
    subject to the limitations imposed by the 1940 Act. Under
    Maryland law, corporations may indemnify present and past
    directors and officers, or officers of another corporation that
    serve at the request of the indemnifying corporation, against
    judgments, penalties, fines, settlements and reasonable expenses
    (including attorneys&#146; fees) actually incurred in connection
    with any threatened, pending or completed action, suit or
    proceeding, whether civil, criminal, administrative or
    investigative (other than an action by or in the right of the
    corporation in which such director or officer is
</DIV>
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    <BR>
    24
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    adjudicated liable to the corporation), in which they are made
    parties by reason of being or having been directors or officers,
    unless it is proved that (i)&#160;the act or omission of the
    director or officer was material to the matter giving rise to
    the proceeding and was committed in bad faith or was the result
    of active and deliberate dishonesty, (ii)&#160;the director or
    officer actually received an improper personal benefit in money,
    property or services or (iii)&#160;in the case of any criminal
    proceeding, the director or officer had reasonable cause to
    believe that the act or omission was unlawful. Maryland law also
    provides that, unless limited by the corporation&#146;s charter,
    a corporation will indemnify present and past directors and
    officers who are successful, on the merits or otherwise, in the
    defense of any threatened, pending or completed action, suit or
    proceeding, whether civil, criminal, administrative or
    investigative, against reasonable expenses (including
    attorneys&#146; fees) incurred in connection with such
    proceeding. The Fund&#146;s Charter does not limit the extent of
    this indemnity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Investment
    Advisory and Administrative Arrangements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Gabelli Funds, LLC serves as the Fund&#146;s Investment Adviser
    pursuant to the Advisory Agreement with the Fund. The Investment
    Adviser is a New York limited liability company with principal
    offices located at One Corporate Center, Rye, New York
    <FONT style="white-space: nowrap">10580-1422</FONT>
    and is registered under the Investment Advisers Act. The
    Investment Adviser was organized in 1999 and is the successor to
    Gabelli Funds, Inc., which was organized in 1980. As of
    December&#160;31, 2010, the Investment Adviser acts as
    registered investment adviser to 25 management investment
    companies with aggregate net assets of $18.3&#160;billion. The
    Investment Adviser, together with the other affiliated
    investment advisers noted below had assets under management
    totaling approximately $33.3&#160;billion as of
    December&#160;31, 2010. GAMCO Asset Management Inc., an
    affiliate of the Investment Adviser, acts as investment adviser
    for individuals, pension trusts, profit sharing trusts and
    endowments, and as a
    <FONT style="white-space: nowrap">sub-adviser</FONT>
    to management investment companies having aggregate assets of
    $13.7&#160;billion under management as of December&#160;31,
    2010. Gabelli Securities, Inc., an affiliate of the Investment
    Adviser, acts as investment adviser for investment partnerships
    and entities having aggregate assets of approximately
    $515&#160;million as of December&#160;31, 2010. Teton Advisors,
    Inc., an affiliate of the Investment Adviser, acts as investment
    manager to the GAMCO Westwood Funds and separately managed
    accounts having aggregate assets of approximately
    $820&#160;million under management as of December&#160;31, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Affiliates of the Investment Adviser may, in the ordinary course
    of their business, acquire for their own account or for the
    accounts of their advisory clients, significant (and possibly
    controlling) positions in the securities of companies that may
    also be suitable for investment by the Fund. The securities in
    which the Fund might invest may thereby be limited to some
    extent. For instance, many companies in the past several years
    have adopted so-called &#147;poison pill&#148; or other
    defensive measures designed to discourage or prevent the
    completion of non-negotiated offers for control of the company.
    Such defensive measures may have the effect of limiting the
    shares of the company which might otherwise be acquired by the
    Fund if the affiliates of the Investment Adviser or their
    advisory accounts have or acquire a significant position in the
    same securities. However, the Investment Adviser does not
    believe that the investment activities of its affiliates will
    have a material adverse effect upon the Fund in seeking to
    achieve its investment objectives. Securities purchased or sold
    pursuant to contemporaneous orders entered on behalf of the
    investment company accounts of the Investment Adviser or the
    advisory accounts managed by its affiliates for their
    unaffiliated clients are allocated pursuant to principles
    believed to be fair and not disadvantageous to any such
    accounts. In addition, all such orders are accorded priority of
    execution over orders entered on behalf of accounts in which the
    Investment Adviser or its affiliates have a substantial
    pecuniary interest. The Investment Adviser may on occasion give
    advice or take action with respect to other clients that differs
    from the actions taken with respect to the Fund. The Fund may
    invest in the securities of companies which are investment
    management clients of GAMCO Asset Management Inc. In addition,
    portfolio companies or their officers or directors may be
    minority shareholders of the Investment Adviser or its
    affiliates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser is a wholly-owned subsidiary of GAMCO
    Investors, Inc., a New York corporation, whose Class&#160;A
    Common Stock is traded on the New York Stock Exchange under the
    symbol &#147;GBL.&#148; Mr.&#160;Mario J. Gabelli may be deemed
    a &#147;controlling person&#148; of the Investment Adviser on
    the basis of
</DIV>
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    <BR>
    25
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    his ownership of a majority of the stock and voting power of
    GGCP, Inc., which owns a majority of the capital stock and
    voting power of GAMCO Investors, Inc.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Under the terms of the Advisory Agreement, the Investment
    Adviser manages the portfolio of the Fund in accordance with its
    stated investment objective and policies, makes investment
    decisions for the Fund, places orders to purchase and sell
    securities on behalf of the Fund and manages its other business
    and affairs, all subject to the supervision and direction of the
    Fund&#146;s Board. In addition, under the Advisory Agreement,
    the Investment Adviser oversees the administration of all
    aspects of the Fund&#146;s business and affairs and provides, or
    arranges for others to provide, at the Investment Adviser&#146;s
    expense, certain enumerated services, including maintaining the
    Fund&#146;s books and records, preparing reports to the
    Fund&#146;s shareholders and supervising the calculation of the
    net asset value of its shares. All expenses of computing the net
    asset value of the Fund, including any equipment or services
    obtained solely for the purpose of pricing shares or valuing its
    investment portfolio, will be an expense of the Fund under its
    Advisory Agreement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Advisory Agreement combines investment advisory and
    administrative responsibilities in one agreement. For services
    rendered by the Investment Adviser on behalf of the Fund under
    the Advisory Agreement, the Fund pays the Investment Adviser a
    fee, computed daily and paid monthly, equal on an annual basis
    to 1.00% of the value of the Fund&#146;s average daily net
    assets including the liquidation value of such preferred shares.
    Notwithstanding the foregoing, the Investment Adviser will waive
    the portion of its investment advisory fee attributable to an
    amount of assets of the Fund equal to the aggregate stated value
    of the applicable series of its currently outstanding preferred
    shares for any calendar year in which the net asset value total
    return of the Fund allocable to the common shares, including
    distributions and the advisory fee subject to potential waiver,
    is less than the stated annual dividend rate or corresponding
    swap rate of each particular series of currently outstanding
    preferred shares, prorated during the year such series is issued
    and the final year such series is outstanding. The Fund&#146;s
    total return on the net asset value of the common shares is
    monitored on a monthly basis to assess whether the total return
    on the net asset value of the common shares exceeds the stated
    dividend rate or corresponding swap rate of each particular
    series of currently outstanding preferred shares for the period.
    The test to confirm the accrual of the management fee on the
    assets attributable to each particular series of preferred
    shares is annual. The Fund will accrue for the management fee on
    these assets during the fiscal year if it appears probable that
    the Fund will incur the management fee on those additional
    assets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Advisory Agreement provides that in the absence of willful
    misfeasance, bad faith, gross negligence or reckless disregard
    for its obligations and duties thereunder, the Investment
    Adviser is not liable for any error or judgment or mistake of
    law or for any loss suffered by the Fund. As part of the
    Advisory Agreement, the Fund has agreed that the name
    &#147;Gabelli&#148; is the Investment Adviser&#146;s property,
    and that in the event the Investment Adviser ceases to act as an
    investment adviser to the Fund, the Fund will change its name to
    one not including &#147;Gabelli.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Pursuant to its terms, the Advisory Agreement will remain in
    effect with respect to the Fund from year to year if approved
    annually (i)&#160;by the Fund&#146;s Board or by the holders of
    a majority of its outstanding voting securities and (ii)&#160;by
    a majority of the directors who are not &#147;interested
    persons&#148; (as defined in the 1940 Act) of any party to the
    Advisory Agreement, by vote cast in person at a meeting called
    for the purpose of voting on such approval.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Advisory Agreement was most recently approved by a majority
    of the Fund&#146;s Board, including a majority of the Directors
    who are not interested persons as that term is defined in the
    1940 Act, at an in person meeting of the Board held on
    May&#160;18, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Advisory Agreement terminates automatically on its
    assignment and may be terminated without penalty on 60&#160;days
    written notice at the option of either party thereto or by a
    vote of a majority (as defined in the 1940 Act) of the
    Fund&#146;s outstanding shares.
</DIV>
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    <BR>
    26
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Portfolio
    Manager Information</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Accounts Managed</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The information below lists the number of accounts for which
    each portfolio manager was primarily responsible for the
    <FONT style="white-space: nowrap">day-to-day</FONT>
    management as of the fiscal year ended December&#160;31, 2010.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="26%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="13%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="13%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=03 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="4%">&nbsp;</TD>	<!-- colindex=03 type=quadright -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=05 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=05 type=quadright -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=06 type=gutter -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=06 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=06 type=body -->
    <TD width="5%" align="left">&nbsp;</TD>	<!-- colindex=06 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Number of<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Accounts<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Total Assets<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>where<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>in Accounts<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Advisory<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>where<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Total Number<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Fee Is<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Advisory Fee<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>of Accounts<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Based on<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Is Based on<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Portfolio Manager</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Type of Accounts</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Managed</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total Assets</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Performance</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Performance</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -9pt; margin-left: 9pt">
    1. Mario J. Gabelli
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Registered Investment Companies:
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    26
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    17.0 billion
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    8
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    4.1 billion
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Other Pooled Investment Vehicles:
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    16
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    478.4 million
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    14
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    470.6 million
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Other Accounts:
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,712
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    14.4 billion
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    9
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1.9 billion
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Potential
    Conflicts of Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Actual or apparent conflicts of interest may arise when a
    portfolio manager for a fund also has
    <FONT style="white-space: nowrap">day-to-day</FONT>
    management responsibilities with respect to one or more other
    funds or accounts. These potential conflicts include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Allocation of Limited Time and Attention.</I>&#160;&#160;A
    portfolio manager who is responsible for managing multiple funds
    or other accounts may devote unequal time and attention to the
    management of those funds or accounts. As a result, the
    portfolio manager may not be able to formulate as complete a
    strategy or identify equally attractive investment opportunities
    for each of those accounts as might be the case if he or she
    were to devote substantially more attention to the management of
    a single fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Allocation of Limited Investment
    Opportunities.</I>&#160;&#160;If a portfolio manager identifies
    an investment opportunity that may be suitable for multiple
    funds or other accounts, a fund may not be able to take full
    advantage of that opportunity because the opportunity may be
    allocated among several of these funds or accounts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Pursuit of Differing Strategies.</I>&#160;&#160;At times, a
    portfolio manager may determine that an investment opportunity
    may be appropriate for only some of the funds or accounts for
    which he or she exercises investment responsibility, or may
    decide that certain of the funds or accounts should take
    differing positions with respect to a particular security. In
    these cases, the portfolio manager may place separate
    transactions for one or more funds or accounts which may affect
    the market price of the security or the execution of the
    transaction, or both, to the detriment of one or more other
    funds or accounts.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Selection of Broker/Dealers.</I>&#160;&#160;Because of
    Mr.&#160;Gabelli&#146;s position with Gabelli&#160;&#038;
    Company, Inc. and his indirect majority ownership interest in
    Gabelli&#160;&#038; Company, Inc., he may have an incentive to
    use Gabelli&#160;&#038; Company, Inc. to execute portfolio
    transactions for a Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Variation in Compensation.</I>&#160;&#160;A conflict of
    interest may arise where the financial or other benefits
    available to the portfolio manager differ among the funds or
    accounts that he or she manages. If the structure of the
    Investment Adviser&#146;s management fee or the portfolio
    manager&#146;s compensation differs among funds or accounts
    (such as where certain funds or accounts pay higher management
    fees or performance-based management fees), the portfolio
    manager may be motivated to favor certain funds or accounts over
    others. The portfolio manager also may be motivated to favor
    funds or accounts in which he or she has an investment interest,
    or in which the Investment Adviser or its affiliates have
    investment interests. Similarly, the desire to maintain assets
    under management or to enhance a portfolio manager&#146;s
    performance record or to derive other rewards, financial or
    otherwise, could influence the portfolio manager in affording
    preferential treatment to those funds or other accounts that
    could most significantly benefit the portfolio manager.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    27
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser and the Fund have adopted compliance
    policies and procedures that are designed to address the various
    conflicts of interest that may arise for the Investment Adviser
    and its staff members. However, there is no guarantee that such
    policies and procedures will be able to detect and prevent every
    situation in which an actual or potential conflict may arise.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Compensation
    Structure</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The compensation of the portfolio managers is reviewed annually
    and structured to enable the Investment Adviser to attract and
    retain highly qualified professionals in a competitive
    environment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Mr.&#160;Gabelli receives incentive-based variable compensation
    based on a percentage of net revenues received by the Investment
    Adviser for managing the Fund. Net revenues are determined by
    deducting from gross investment management fees the firm&#146;s
    expenses (other than Mr.&#160;Gabelli&#146;s compensation)
    allocable to the Fund. Five closed-end registered investment
    companies (including this Fund) managed by Mr.&#160;Gabelli have
    arrangements whereby the Investment Adviser will only receive
    its investment advisory fee attributable to the liquidation
    value of outstanding preferred stock (and Mr.&#160;Gabelli would
    only receive his percentage of such advisory fee) if certain
    performance levels are met. Additionally, he receives similar
    incentive-based variable compensation for managing other
    accounts within the firm and its affiliates. This method of
    compensation is based on the premise that superior long-term
    performance in managing a portfolio should be rewarded with
    higher compensation as a result of growth of assets through
    appreciation and net investment activity. One of the other
    registered investment companies managed by Mr.&#160;Gabelli has
    a performance (fulcrum) fee arrangement for which his
    compensation is adjusted up or down based on the performance of
    the investment company relative to an index. Mr.&#160;Gabelli
    manages other accounts with performance fees. Compensation for
    managing these accounts has two components. One component of the
    fee is based on a percentage of net revenues received by the
    Investment Adviser for managing the account. The second
    component is based on absolute performance of the account, with
    respect to which a percentage of such performance fee is paid to
    Mr.&#160;Gabelli. As an executive officer of the Investment
    Adviser&#146;s parent company, GAMCO Investors, Inc.,
    Mr.&#160;Gabelli also receives ten percent of the net operating
    profits of the parent company. Mr.&#160;Gabelli receives no base
    salary, no annual bonus and no stock options.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Compensation for managing other accounts is based on a
    percentage of net revenues received by the Investment Adviser
    for managing the account. Compensation for managing the pooled
    investment vehicles and other accounts that have a
    performance-based fee will have two components. One component of
    the fee is based on a percentage of net revenues received by the
    Investment Adviser for managing the account or pooled investment
    vehicle. The second component of the fee is based on absolute
    performance from which a percentage of such fee is paid to the
    portfolio manager.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Ownership
    of Shares in the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As of December&#160;31, 2010, Mario J. Gabelli was deemed to
    beneficially own $8,713,956 of equity securities of the Fund,
    which is a reflection of 1,423,849 common shares multiplied by
    the December&#160;31, 2010 closing price of $6.12.
</DIV>

<A name='Y91316129'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">AUCTIONS
    FOR AUCTION RATE PREFERRED SHARES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    of Auction Procedures</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following is a brief summary of the auction procedures for
    auction rate preferred shares. These auction procedures are
    complicated, and there are exceptions to these procedures. Many
    of the terms in this section have a special meaning.
    Accordingly, this description does not purport to be complete
    and is qualified, in its entirety, by reference to the
    Fund&#146;s Governing Documents, including the provisions of the
    Articles&#160;Supplementary establishing any series of auction
    rate preferred shares.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    28
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The auctions determine the dividend rate for auction rate
    preferred shares, but each dividend rate will not be higher than
    the maximum rate. If you own auction rate preferred shares, you
    may instruct your broker-dealer to enter one of three kinds of
    orders in the auction with respect to your shares: sell, bid and
    hold.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    If you enter a sell order, you indicate that you want to sell
    auction rate preferred shares at their liquidation preference
    per share, no matter what the next dividend period&#146;s rate
    will be.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    If you enter a bid (or &#147;hold at a rate&#148;) order, which
    must specify a dividend rate, you indicate that you want to sell
    auction rate preferred shares only if the next dividend
    period&#146;s rate is less than the rate you specify.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    If you enter a hold order you indicate that you want to continue
    to own auction rate preferred shares, no matter what the next
    dividend period&#146;s rate will be.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    You may enter different types of orders for different portions
    of your auction rate preferred shares. You may also enter an
    order to buy additional auction rate preferred shares. All
    orders must be for whole shares. All orders you submit are
    irrevocable. There is a fixed number of auction rate preferred
    shares, and the dividend rate likely will vary from auction to
    auction depending on the number of bidders, the number of shares
    the bidders seek to buy, the rating of the auction rate
    preferred shares and general economic conditions including
    current interest rates. If you own auction rate preferred shares
    and submit a bid for them higher than the then-maximum rate,
    your bid will be treated as a sell order. If you do not enter an
    order, the broker-dealer will assume that you want to continue
    to hold auction rate preferred shares, but if you fail to submit
    an order and the dividend period is longer than 28&#160;days,
    the broker-dealer will treat your failure to submit a bid as a
    sell order.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If you do not then own auction rate preferred shares, or want to
    buy more shares, you may instruct a broker-dealer to enter a bid
    order to buy shares in an auction at the liquidation preference
    per share at or above the dividend rate you specify. If your bid
    for shares you do not own specifies a rate higher than the
    then-maximum rate, your bid will not be considered.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Broker-dealers will submit orders from existing and potential
    holders of auction rate preferred shares to the auction agent.
    Neither the Fund nor the auction agent will be responsible for a
    broker-dealer&#146;s failure to submit orders from existing or
    potential holders of auction rate preferred shares. A
    broker-dealer&#146;s failure to submit orders for auction rate
    preferred shares held by it or its customers will be treated in
    the same manner as a holder&#146;s failure to submit an order to
    the broker-dealer. A broker-dealer may submit orders to the
    auction agent for its own account. The Fund may not submit an
    order in any auction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The auction agent after each auction for the auction rate
    preferred shares will pay to each broker-dealer, from funds
    provided by the Fund, a service charge equal to, in the case
    shares of any auction immediately preceding a dividend period of
    less than 365&#160;days, the product of (i)&#160;a fraction, the
    numerator of which is the number of days in such dividend period
    and the denominator of which is 365, times (ii)
    <FONT style="vertical-align: text-top; font-size: 70%;">1</FONT>/<FONT style="font-size: 70%;">4</FONT>
    of 1%, times (iii)&#160;the liquidation preference per share,
    times (iv)&#160;the aggregate number of auction rate preferred
    shares placed by such broker-dealer at such auction or, in the
    case of any auction immediately preceding a dividend period of
    one year or longer, a percentage of the purchase price of the
    auction rate preferred shares placed by the broker-dealer at the
    auction agreed to by the Fund and the broker-dealers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the number of auction rate preferred shares subject to bid
    orders by potential holders with a dividend rate equal to or
    lower than the then-maximum rate is at least equal to the number
    of auction rate preferred shares subject to sell orders, then
    the dividend rate for the next dividend period will be the
    lowest rate submitted which, taking into account that rate and
    all lower rates submitted in order from existing and potential
    holders, would result in existing and potential holders owning
    all the auction rate preferred shares available for purchase in
    the auction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the number of auction rate preferred shares subject to bid
    orders by potential holders with a dividend rate equal to or
    lower than the then-maximum rate is less than the number of
    auction rate preferred shares subject to sell orders, then the
    auction is considered to be a failed auction, and the dividend
    rate will be the
</DIV>
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    <BR>
    29
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    maximum rate. In that event, existing holders that have
    submitted sell orders (or are treated as having submitted sell
    orders) may not be able to sell any or all of the auction rate
    preferred shares offered for sale.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If broker-dealers submit or are deemed to submit hold orders for
    all outstanding auction rate preferred shares, the auction is
    considered an &#147;all hold&#148; auction and the dividend rate
    for the next dividend period will be the &#147;all hold
    rate,&#148; which is 80% of the &#147;AA&#148; Financial
    Composite Commercial Paper Rate, as determined in accordance
    with procedures set forth in the Articles&#160;Supplementary
    establishing the auction rate preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The auction procedures include a <I>pro rata </I>allocation of
    auction rate preferred shares for purchase and sale. This
    allocation process may result in an existing holder continuing
    to hold or selling, or a potential holder buying, fewer shares
    than the number of shares of auction rate preferred shares in
    its order. If this happens, broker-dealers will be required to
    make appropriate <I>pro rata </I>allocations among their
    respective customers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Settlement of purchases and sales will be made on the next
    business day (which also is a dividend payment date) after the
    auction date through DTC. Purchasers will pay for their auction
    rate preferred shares through broker-dealers in
    <FONT style="white-space: nowrap">same-day</FONT>
    funds to DTC against delivery to the broker-dealers. DTC will
    make payment to the sellers&#146; broker-dealers in accordance
    with its normal procedures, which require broker-dealers to make
    payment against delivery in
    <FONT style="white-space: nowrap">same-day</FONT>
    funds. As used in this prospectus, a business day is a day on
    which the NYSE is open for trading, and which is not a Saturday,
    Sunday or any other day on which banks in New York City are
    authorized or obligated by law to close.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The first auction for a series of auction rate preferred shares
    will be held on the date specified in the Prospectus Supplement
    for such series, which will be the business day preceding the
    dividend payment date for the initial dividend period.
    Thereafter, except during special dividend periods, auctions for
    such series auction rate preferred shares normally will be held
    within the frequency specified in the Prospectus Supplement for
    such series, and each subsequent dividend period for such series
    auction rate preferred shares normally will begin on the
    following day.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If an auction is not held because an unforeseen event or
    unforeseen events cause a day that otherwise would have been an
    auction date not to be a business day, then the length of the
    then-current dividend period will be extended by seven days (or
    a multiple thereof if necessary because of such unforeseen event
    or events), the applicable rate for such period will be the
    applicable rate for the then-current dividend period so extended
    and the dividend payment date for such dividend period will be
    the first business day immediately succeeding the end of such
    period.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following is a simplified example of how a typical auction
    works. Assume that the Fund has 1,000 outstanding shares of
    auction rate preferred shares and three current holders. The
    three current holders and three potential holders submit orders
    through broker-dealers at the auction.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="33%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current Holder A
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Owns 500&#160;shares, wants to sell all 500&#160;shares if
    auction rate is less than 5.1%
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bid order at 5.1% rate for all 500&#160;shares
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current Holder B
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Owns 300&#160;shares, wants to hold
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Hold order will take the auction rate
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Current Holder C
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Owns 200&#160;shares, wants to sell all 200&#160;shares if
    auction rate is less than 4.9%
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Bid order at 4.9% rate for all 200&#160;shares
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Potential Holder D
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Wants to buy 200&#160;shares
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Places order to buy at or above 5.0%
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Potential Holder E
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Wants to buy 300&#160;shares
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Places order to buy at or above 4.99%
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Potential Holder F
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Wants to buy 200&#160;shares
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Places order to buy at or above 5.1%
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>
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    <BR>
    30
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The lowest dividend rate that will result in all 1,000 auction
    rate preferred shares continuing to be held is 5.0% (the offer
    by D). Therefore, the dividend rate will be 5.0%. Current
    holders B and C will continue to own their shares. Current
    holder A will sell its shares because A&#146;s dividend rate bid
    was higher than the dividend rate: Potential holder D will buy
    200&#160;shares and potential holder E will buy 300&#160;shares
    because their bid rates were at or below the dividend rate.
    Potential holder F will not buy any shares because its bid rate
    was above the dividend rate.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Secondary
    Market Trading and Transfer of Auction Rate Preferred
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The underwriters will not be required to make a market in the
    auction rate preferred shares. The broker-dealers (including the
    underwriters) may maintain a secondary trading market for
    outside of auctions, but they are not required to do so. There
    can be no assurance that a secondary trading market for the
    auction rate preferred shares will develop or, if it does
    develop, that it will provide owners with liquidity of
    investment. The auction rate preferred shares will not be
    registered on any stock exchange. Investors who purchase auction
    rate preferred shares in an auction for a special dividend
    period should note that because the dividend rate on such shares
    will be fixed for the length of that dividend period, the value
    of such shares may fluctuate in response to the changes in
    interest rates and may be more or less than their original cost
    if sold on the open market in advance of the next auction
    thereof, depending on market conditions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    You may sell, transfer, or otherwise dispose of the auction rate
    preferred shares only in whole shares and only pursuant to a bid
    or sell order placed with the auction agent in accordance with
    the auction procedures, to the Fund or its affiliates or to or
    through a broker-dealer that has been selected by the Fund or to
    such other persons as may be permitted by the Fund. However, if
    you hold your auction rate preferred shares in the name of a
    broker-dealer, a sale or transfer of your auction rate preferred
    shares to that broker dealer, or to another customer of that
    broker-dealer, will not be considered a sale or transfer for
    purposes of the foregoing if the shares remain in the name of
    the broker-dealer immediately after your transaction. In
    addition, in the case of all transfers other than through an
    auction, the broker-dealer (or other person, if the Fund
    permits) receiving the transfer must advise the auction agent of
    the transfer.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Due to market turmoil in recent years, most auction rate
    preferred shares have been unable to hold successful auctions
    and holders of such shares have suffered reduced liquidity. A
    failed auction results when there are not enough bidders in the
    auction at rates below the maximum rate as prescribed by the
    terms of the auction-rate preferred shares. These failed
    auctions have been an industry wide problem and may continue to
    occur in the future. Any current or potential holder of
    auction-rate preferred shares faces the risk that auctions will
    continue to fail, or will fail again at some point in the
    future, and that he or she may not be able to sell his or her
    shares through the auction process.
</DIV>

<A name='Y91316130'>
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PORTFOLIO
    TRANSACTIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Subject to policies established by the Board, the Investment
    Adviser is responsible for placing purchase and sale orders and
    the allocation of brokerage on behalf of the Fund. Transactions
    in equity securities are in most cases effected on
    U.S.&#160;stock exchanges and involve the payment of negotiated
    brokerage commissions. In general, there may be no stated
    commission in the case of securities traded in
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    markets, but the prices of those securities may include
    undisclosed commissions or
    <FONT style="white-space: nowrap">mark-ups.</FONT>
    Principal transactions are not entered into with affiliates of
    the Fund. However, Gabelli&#160;&#038; Company, Inc. may execute
    transactions in the
    <FONT style="white-space: nowrap">over-the-counter</FONT>
    markets on an agency basis and receive a stated commission
    therefrom. To the extent consistent with applicable provisions
    of the 1940 Act and the rules thereunder, and other regulatory
    requirements, the Fund&#146;s Board have determined that
    portfolio transactions may be executed through
    Gabelli&#160;&#038; Company, Inc. and its broker-dealer
    affiliates if, in the judgment of the Investment Adviser, the
    use of those broker-dealers is likely to result in price and
    execution at least as favorable as those of other qualified
    broker-dealers, and if, in particular transactions, those
    broker-dealers charge the Fund a rate consistent with that
    charged to comparable unaffiliated customers in similar
    transactions. For the fiscal years ended December&#160;31, 2008,
    December&#160;31, 2009, and December&#160;31, 2010, the Fund
    paid a total of $31,017, $37,201,
</DIV>
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    <BR>
    31
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    and $21,262, respectively, in brokerage commissions, of which
    Gabelli&#160;&#038; Company and its affiliates received $33,692,
    $51,018, and $24,326, respectively. For 2010, the amount paid to
    Gabelli&#160;&#038; Company, Inc. and its broker-dealer
    affiliates represented 87.40% of the number of aggregate
    brokerage commissions paid by the Fund, and 74.27% of the
    aggregate dollar amount of transactions involving the payment of
    commissions. The Fund has no obligations to deal with any broker
    or group of brokers in executing transactions in portfolio
    securities. In executing transactions, the Investment Adviser
    seeks to obtain the best price and execution for the Fund,
    taking into account such factors as price, size of order,
    difficulty of execution and operational facilities of the firm
    involved and the firm&#146;s risk in positioning a block of
    securities. While the Investment Adviser generally seeks
    reasonably competitive commission rates, the Fund does not
    necessarily pay the lowest commission available.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Subject to obtaining the best price and execution, brokers who
    provide supplemental research, market and statistical
    information, or other services (e.g., wire services) to the
    Investment Adviser or its affiliates may receive orders for
    transactions by the Fund. The term &#147;research, market and
    statistical information&#148; includes advice as to the value of
    securities, and advisability of investing in, purchasing or
    selling securities, and the availability of securities or
    purchasers or sellers of securities, and furnishing analyses and
    reports concerning issues, industries, securities, economic
    factors and trends, portfolio strategy and the performance of
    accounts. Information so received will be in addition to and not
    in lieu of the services required to be performed by the
    Investment Adviser under the Advisory Agreement and the expenses
    of the Investment Adviser will not necessarily be reduced as a
    result of the receipt of such supplemental information. Such
    information may be useful to the Investment Adviser and its
    affiliates in providing services to clients other than the Fund,
    and not all such information is used by the Investment Adviser
    in connection with the Fund. Conversely, such information
    provided to the Investment Adviser and its affiliates by brokers
    and dealers through whom other clients of the Investment Adviser
    and its affiliates effect securities transactions may be useful
    to the Investment Adviser in providing services to the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Although investment decisions for the Fund are made
    independently from those for the other accounts managed by the
    Investment Adviser and its affiliates, investments of the kind
    made by the Fund may also be made for those other accounts. When
    the same securities are purchased for or sold by the Fund and
    any of such other accounts, it is the policy of the Investment
    Adviser and its affiliates to allocate such purchases and sales
    in the manner deemed fair and equitable to all of the accounts,
    including the Fund.
</DIV>

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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PORTFOLIO
    TURNOVER</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Portfolio turnover rate is calculated by dividing the lesser of
    an investment company&#146;s annual sales or purchases of
    portfolio securities by the monthly average value of securities
    in its portfolio during the year, excluding portfolio securities
    the maturities of which at the time of acquisition were one year
    or less. A high rate of portfolio turnover involves
    correspondingly greater brokerage commission expense than a
    lower rate, which expense must be borne by the Fund and
    indirectly by its shareholders. A higher rate of portfolio
    turnover may also result in taxable gains being passed to
    shareholders sooner than would otherwise be the case. For the
    fiscal years ended December&#160;31, 2008, 2009 and 2010, the
    portfolio turnover rate of the Fund was 76%, 71% and 44%,
    respectively.
</DIV>

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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">TAXATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following discussion is a brief summary of certain
    U.S.&#160;federal income tax considerations affecting the Fund
    and its shareholders and noteholders (as the case may be).
    Except as expressly provided otherwise, this discussion assumes
    you are a U.S.&#160;person (as defined for U.S.&#160;federal
    income tax purposes) and that you hold your shares or notes as
    capital assets (generally, for investment). No attempt is made
    to present a detailed explanation of all U.S.&#160;federal,
    state, local and foreign tax concerns affecting the Fund and its
    shareholders and noteholders (including shareholders and
    noteholders subject to special tax rules and shareholders owning
    a large position in the Fund), and the discussions set forth
    here and in the Prospectus do not constitute tax advice.
    Investors are urged to consult their own tax advisers with any
    specific questions relating to
</DIV>
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    32
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    U.S.&#160;federal, state, local and foreign taxes. The
    discussion reflects applicable tax laws of the United States as
    of the date of this SAI, which tax laws may be changed or become
    subject to new interpretations by the courts or the Internal
    Revenue Service (the &#147;IRS&#148;) retroactively or
    prospectively. No assurance can be given that the IRS would not
    assert, or that a court would not sustain, a position different
    from any of the tax aspects set forth below.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of the Fund</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund has elected to be treated and has qualified, and
    intends to continue to qualify, as a regulated investment
    company (a &#147;RIC&#148;) under Subchapter M of the Internal
    Revenue Code of 1986, as amended (the &#147;Code&#148;).
    Accordingly, the Fund must, among other things,
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (i)&#160;derive in each taxable year at least 90% of its gross
    income from (a)&#160;dividends, interest (including tax-exempt
    interest), payments with respect to certain securities loans,
    and gains from the sale or other disposition of stock,
    securities or foreign currencies, or other income (including but
    not limited to gain from options, futures and forward contracts)
    derived with respect to its business of investing in such stock,
    securities or currencies and (b)&#160;net income derived from
    interests in certain publicly traded partnerships that are
    treated as partnerships for U.S.&#160;federal income tax
    purposes and that derive less than 90% of their gross income
    from the items described in (a)&#160;above (each a
    &#147;Qualified Publicly Traded Partnership&#148;);&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (ii)&#160;diversify its holdings so that, at the end of each
    quarter of each taxable year (a)&#160;at least 50% of the value
    of the Fund&#146;s total assets is represented by cash and cash
    items, U.S.&#160;government securities, the securities of other
    regulated investment companies and other securities, with such
    other securities limited, in respect of any one issuer, to an
    amount not greater than 5% of the value of the Fund&#146;s total
    assets and not more than 10% of the outstanding voting
    securities of such issuer and (b)&#160;not more than 25% of the
    value of the Fund&#146;s total assets is invested in the
    securities of (I)&#160;any one issuer (other than
    U.S.&#160;government securities and the securities of other
    RICs), (II)&#160;any two or more issuers that the Fund controls
    and that are determined to be engaged in the same business or
    similar or related trades or businesses or (III)&#160;any one or
    more Qualified Publicly Traded Partnerships.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As a RIC, the Fund generally is not subject to U.S.&#160;federal
    income tax on income and gains that it distributes each taxable
    year to shareholders, provided that it distributes at least 90%
    of the sum of the Fund&#146;s (i)&#160;investment company
    taxable income (which includes, among other items, dividends,
    interest and the excess of any net short-term capital gain over
    net long-term capital loss and other taxable income, other than
    any net long-term capital gain, reduced by deductible expenses)
    determined without regard to the deduction for dividends and
    distributions paid and (ii)&#160;its net tax-exempt interest
    income (the excess of its gross tax-exempt interest income over
    certain disallowed deductions). The Fund intends to distribute
    at least annually substantially all of such income. The Fund
    will be subject to income tax at regular corporate rates on any
    taxable income or gains that it does not distribute to its
    shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Amounts not distributed on a timely basis in accordance with a
    calendar year distribution requirement are subject to a
    nondeductible 4% excise tax at the Fund level. To avoid the tax,
    the Fund must distribute during each calendar year an amount at
    least equal to the sum of (i)&#160;98% of its ordinary income
    (not taking into account any capital gains or losses) for the
    calendar year, (ii)&#160;98.2% of its capital gain in excess of
    its capital loss (adjusted for certain ordinary losses) for a
    one-year period generally ending on October 31 of the calendar
    year (unless an election is made to use the Fund&#146;s fiscal
    year), and (iii)&#160;certain undistributed amounts from
    previous years on which the Fund paid no U.S.&#160;federal
    income tax. While the Fund intends to distribute any income and
    capital gain in the manner necessary to minimize imposition of
    the 4% excise tax, there can be no assurance that sufficient
    amounts of the Fund&#146;s ordinary income and capital gain will
    be distributed to avoid entirely the imposition of the tax. In
    that event, the Fund will be liable for the tax only on the
    amount by which it does not meet the foregoing distribution
    requirement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A distribution will be treated as paid during the calendar year
    if it is declared by the Fund in October, November or December
    of the year, payable to shareholders of record on a date during
    such a month and paid
</DIV>
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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    by the Fund during January of the following year. Any such
    distributions paid during January of the following year will be
    deemed to be received by the Fund&#146;s shareholders on
    December 31 of the year the distributions are declared, rather
    than when the distributions are actually received.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the Fund were unable to satisfy the 90% distribution
    requirement or otherwise were to fail to qualify as a RIC in any
    year, it would be taxed on all of its taxable income in the same
    manner as an ordinary corporation and distributions to the
    Fund&#146;s shareholders would not be deductible by the Fund in
    computing its taxable income. Such distributions would be
    taxable to the shareholders as ordinary dividends to the extent
    of the Fund&#146;s current or accumulated earnings and profits.
    Provided that certain holding period and other requirements are
    met, such dividends would be eligible (i)&#160;to be treated as
    qualified dividend income in the case of shareholders taxed as
    individuals with respect to taxable years beginning on or before
    December&#160;31, 2012 and (ii)&#160;for the dividends received
    deduction in the case of corporate shareholders. To qualify
    again to be taxed as a RIC in a subsequent year, the Fund would
    be required to distribute to its shareholders its earnings and
    profits attributable to non-RIC years. In addition, if the Fund
    failed to qualify as a RIC for a period greater than two taxable
    years, then the Fund would be required to recognize and pay tax
    on any net built-in gain (the excess of aggregate gain,
    including items of income, over aggregate loss that would have
    been realized if the Fund had been liquidated) or,
    alternatively, to elect to be subject to taxation on such
    built-in gain recognized for a period of ten years, in order to
    qualify as a RIC in a subsequent year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Gain or loss on the sales of securities by the Fund will
    generally be long-term capital gain or loss if the securities
    have been held by the Fund for more than one year. Gain or loss
    on the sale of securities held for one year or less will be
    short-term capital gain or loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Certain of the Fund&#146;s investment practices are subject to
    special and complex U.S.&#160;federal income tax provisions that
    may, among other things, (i)&#160;disallow, suspend or otherwise
    limit the allowance of certain losses or deductions,
    (ii)&#160;convert lower taxed long-term capital gains and
    qualified dividend income into higher taxed short-term capital
    gains or ordinary income, (iii)&#160;convert ordinary loss or a
    deduction into capital loss (the deductibility of which is more
    limited), (iv)&#160;cause the Fund to recognize income or gain
    without a corresponding receipt of cash, (v)&#160;adversely
    affect the time as to when a purchase or sale of stock or
    securities is deemed to occur, (vi)&#160;adversely alter the
    characterization of certain complex financial transactions and
    (vii)&#160;produce income that will not qualify as good income
    for purposes of the 90% annual gross income requirement
    described above. The Fund will monitor its transactions and may
    make certain tax elections to mitigate the effect of these rules
    and prevent disqualification of the Fund as a regulated
    investment company.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Foreign currency gain or loss on
    <FONT style="white-space: nowrap">non-U.S.&#160;dollar-denominated</FONT>
    securities and on any
    <FONT style="white-space: nowrap">non-U.S.&#160;dollar-denominated</FONT>
    futures contracts, options and forward contracts that are not
    section&#160;1256 contracts (as defined below) generally will be
    treated as ordinary income and loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The premium received by the Fund for writing a call option is
    not included in income at the time of receipt. If the option
    expires, the premium is short-term capital gain to the Fund. If
    the Fund enters into a closing transaction, the difference
    between the amount paid to close out its position and the
    premium received is short-term capital gain or loss. If a call
    option written by the Fund is exercised, thereby requiring the
    Fund to sell the underlying security, the premium will increase
    the amount realized upon the sale of the security and any
    resulting gain or loss will be long-term or short-term,
    depending upon the holding period of the security. Because the
    Fund does not have control over the exercise of the call options
    it writes, such exercises or other required sales of the
    underlying securities may cause the Fund to realize capital
    gains or losses at inopportune times.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    With respect to a put or call option that is purchased by the
    Fund, if the option is sold, any resulting gain or loss will be
    a capital gain or loss, and will be short-term or long-term,
    depending upon the holding period for the option. If the option
    expires, the resulting loss is a capital loss and is short-term
    or long-term, depending upon the holding period for the option.
    If the option is exercised, the cost of the option, in the case
    of a call option, is added to the basis of the purchased
    security and, in the case of a put option, reduces the amount
    realized on the underlying security in determining gain or loss.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund&#146;s investment in so-called &#147;section&#160;1256
    contracts,&#148; such as regulated futures contracts, most
    foreign currency forward contracts traded in the interbank
    market and options on most stock indices, are subject to special
    tax rules. All section&#160;1256 contracts held by the Fund at
    the end of its taxable year are required to be marked to their
    market value, and any unrealized gain or loss on those positions
    will be included in the Fund&#146;s income as if each position
    had been sold for its fair market value at the end of the
    taxable year. The resulting gain or loss will be combined with
    any gain or loss realized by the Fund from positions in
    section&#160;1256 contracts closed during the taxable year.
    Provided such positions were held as capital assets and were not
    part of a &#147;hedging transaction&#148; nor part of a
    &#147;straddle,&#148; 60% of the resulting net gain or loss will
    be treated as long-term capital gain or loss, and 40% of such
    net gain or loss will be treated as short-term capital gain or
    loss, regardless of the period of time the positions were
    actually held by the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Investments by the Fund in certain &#147;passive foreign
    investment companies&#148; (&#147;PFICs&#148;) could subject the
    Fund to U.S.&#160;federal income tax (including interest
    charges) on certain distributions or dispositions with respect
    to those investments which cannot be eliminated by making
    distributions to shareholders. Elections may be available to the
    Fund to mitigate the effect of the PFIC rules, but such
    elections generally accelerate the recognition of income without
    the receipt of cash. Dividends paid by PFICs will not qualify
    for the reduced tax rates discussed below under &#147;Taxation
    of Shareholders.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may invest in debt obligations purchased at a discount
    with the result that the Fund may be required to accrue income
    for U.S.&#160;federal income tax purposes before amounts due
    under the obligations are paid. The Fund may also invest in
    securities rated in the medium to lower rating categories of
    nationally recognized rating organizations, and in unrated
    securities (&#147;high yield securities&#148;). A portion of the
    interest payments on such high yield securities may be treated
    as dividends for certain U.S.&#160;federal income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As a result of investing in stock of PFICs or securities
    purchased at a discount or any other investment that produces
    income that is not matched by a corresponding cash distribution
    to the Fund, the Fund could be required to include in current
    income, income it has not yet received. Any such income would be
    treated as income earned by the Fund and therefore would be
    subject to the distribution requirements of the Code. This might
    prevent the Fund from distributing 90% of its investment company
    taxable income as is required in order to avoid
    Fund-level&#160;U.S.&#160;federal income tax on all of its
    income, or might prevent the Fund from distributing enough
    ordinary income and capital gain net income to avoid the
    imposition of the excise tax. To avoid this result, the Fund may
    be required to borrow money or dispose of securities to be able
    to make distributions to its shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the Fund does not meet the asset coverage requirements of the
    1940 Act and the Statements of Preferences, the Fund will be
    required to suspend distributions to the holders of the common
    shares until the asset coverage is restored. Such a suspension
    of distributions might prevent the Fund from distributing 90% of
    its investment company taxable income as is required in order to
    avoid Fund-level&#160;U.S.&#160;federal income taxation on all
    of its income, or might prevent the Fund from distributing
    enough income and capital gain net income to avoid imposition of
    the excise tax.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Foreign
    Taxes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Since the Fund may invest in foreign securities, its income from
    such securities may be subject to
    <FONT style="white-space: nowrap">non-U.S.&#160;taxes.</FONT>
    The Fund intends to invest less than 50% of its total assets in
    foreign securities. As long as the Fund continues to invest less
    than 50% of its assets in foreign securities, it will not be
    eligible to elect to &#147;pass-through&#148; to shareholders of
    the Fund the ability to use the foreign tax deduction or foreign
    tax credit for foreign taxes paid with respect to qualifying
    taxes.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund will determine either to distribute or to retain for
    reinvestment all or part of its net capital gain (i.e., the
    excess of net long-term capital gain over net short-term capital
    loss). If any such gain is retained, the Fund will be subject to
    regular corporate income tax such amount. In that event, the
    Fund expects to designate
</DIV>
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    <BR>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    the retained amount as undistributed capital gain in a notice to
    its shareholders, each of whom (i)&#160;will be required to
    include in income for tax purposes as long-term capital gain its
    share of such undistributed amounts, (ii)&#160;will be entitled
    to credit its proportionate share of the tax paid by the Fund
    against its U.S.&#160;federal income tax liability and to claim
    refunds to the extent that the credit exceeds such liability and
    (iii)&#160;will increase its basis in its shares of the Fund by
    the excess of the amount described in clause&#160;(i) over the
    amount described in clause (ii).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Distributions paid by the Fund from its investment company
    taxable income, which includes net short-term capital gain,
    generally are taxable as ordinary income to the extent of the
    Fund&#146;s earnings and profits. Provided that certain holding
    period and other requirements are met, such distributions (if
    designated by the Fund) may qualify (i)&#160;for the dividends
    received deduction available to corporations, but only to the
    extent that the Fund&#146;s income consists of dividend income
    from U.S.&#160;corporations and (ii)&#160;in the case of
    individual shareholders, as qualified dividend income eligible
    to be taxed at long-term capital gain rates to the extent that
    the Fund receives qualified dividend income. These special rules
    relating to the taxation of ordinary income dividends paid by
    RICs to individual taxpayers generally apply to taxable years
    beginning on or before December&#160;31, 2012. Thereafter, the
    Fund&#146;s dividends, other than capital gains dividends, will
    be fully taxable at ordinary income rates unless further
    Congressional action is taken. There can be no assurance as to
    what portion of the Fund&#146;s distributions will qualify for
    favorable treatment as qualified dividend income or whether
    Congress will extend such treatment to taxable years beginning
    after December&#160;31, 2012. Qualified dividend income is, in
    general, dividend income from taxable domestic corporations and
    certain qualified foreign corporations (e.g., generally, foreign
    corporations incorporated in a possession of the United States
    or in certain countries with a qualifying comprehensive tax
    treaty with the United States, or whose stock with respect to
    which such dividend is paid is readily tradable on an
    established securities market in the United States). A qualified
    foreign corporation does not include a foreign corporation which
    for the taxable year of the corporation in which the dividend
    was paid, or the preceding taxable year, is a &#147;passive
    foreign investment company,&#148; as defined in the Code. If the
    Fund lends portfolio securities, the amount received by the Fund
    that is the equivalent of the dividends paid by the issuer on
    the securities loaned will not be eligible for qualified
    dividend income treatment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Distributions of net capital gain designated as capital gain
    distributions, if any, are taxable to shareholders at rates
    applicable to long-term capital gain, whether paid in cash or in
    shares, and regardless of how long the shareholder has held the
    Fund&#146;s shares. Capital gain distributions are not eligible
    for the dividends received deduction. The maximum tax rate on
    net long-term capital gain of individuals generally is 15% for
    taxable years beginning before January&#160;1, 2013.
    Distributions in excess of the Fund&#146;s earnings and profits
    will first reduce the adjusted tax basis of a holder&#146;s
    shares and, after such adjusted tax basis is reduced to zero,
    will constitute capital gain to such holder (assuming the shares
    are held as a capital asset).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The IRS currently requires that a regulated investment company
    that has two or more classes of stock allocate to each such
    class proportionate amounts of each type of its income (such as
    ordinary income, capital gains, dividends qualifying for the
    dividends received deduction (&#147;DRD&#148;) and qualified
    dividend income) based upon the percentage of total dividends
    paid out of current or accumulated earnings and profits to each
    class for the tax year. Accordingly, the Fund intends each year
    to allocate capital gain dividends, dividends qualifying for the
    DRD and dividends that constitute qualified dividend income, if
    any, between its common shares and preferred shares in
    proportion to the total dividends paid out of current or
    accumulated earnings and profits to each class with respect to
    such tax year. Distributions in excess of the Fund&#146;s
    current and accumulated earnings and profits, if any, however,
    will not be allocated proportionately among the common shares
    and Preferred Shares. Since the Fund&#146;s current and
    accumulated earnings and profits will first be used to pay
    dividends on its preferred shares, distributions in excess of
    such earnings and profits, if any, will be made
    disproportionately to holders of common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Shareholders may be entitled to offset their capital gain
    distributions (but not distributions eligible for qualified
    dividend income treatment) with capital loss. There are a number
    of statutory provisions affecting when capital loss may be
    offset against capital gain, and limiting the use of loss from
    certain investments and activities. Accordingly, shareholders
    with capital loss are urged to consult their tax advisers.
</DIV>
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    <BR>
    36
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The price of shares purchased at any time may reflect the amount
    of a forthcoming distribution. Those purchasing shares just
    prior to a distribution will receive a distribution which will
    be taxable to them even though it represents in part a return of
    invested capital.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Upon a sale, exchange or other disposition of shares, a
    shareholder will generally realize a taxable gain or loss equal
    to the difference between the amount of cash and the fair market
    value of other property received and the shareholder&#146;s
    adjusted tax basis in the shares. Such gain or loss will be
    treated as long-term capital gain or loss if the shares have
    been held for more than one year. Any loss realized on a sale or
    exchange will be disallowed to the extent the shares disposed of
    are replaced by substantially identical shares within a
    <FONT style="white-space: nowrap">61-day</FONT>
    period beginning 30&#160;days before and ending 30&#160;days
    after the date that the shares are disposed of. In such a case,
    the basis of the shares acquired will be adjusted to reflect the
    disallowed loss.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any loss realized by a shareholder on the sale of Fund shares
    held by the shareholder for six months or less will be treated
    for tax purposes as a long-term capital loss to the extent of
    any capital gain distributions received by the shareholder (or
    amounts credited to the shareholder as an undistributed capital
    gain) with respect to such shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Ordinary income distributions and capital gain distributions
    also may be subject to state and local taxes. Shareholders are
    urged to consult their own tax advisers regarding specific
    questions about U.S.&#160;federal (including the application of
    the alternative minimum tax rules), state, local or foreign tax
    consequences to them of investing in the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A shareholder that is a nonresident alien individual or a
    foreign corporation (a &#147;foreign investor&#148;) generally
    will be subject to U.S.&#160;withholding tax at the rate of 30%
    (or possibly a lower rate provided by an applicable tax treaty)
    on ordinary income dividends. Assuming applicable disclosure and
    certification requirements are met, U.S.&#160;federal
    withholding tax will generally not apply to any gain or income
    realized by a foreign investor in respect of any distributions
    of net capital gain (including net capital gain retained by the
    fund but deemed distributed to shareholders) or upon the sale or
    other disposition of shares of the Fund. Different tax
    consequences may result (i)&#160;if the foreign investor is
    engaged in a trade or business in the United States,
    (ii)&#160;in the case of an individual, if the foreign investor
    is present in the United States for 183&#160;days or more during
    a taxable year and certain other conditions are met, or
    (iii)&#160;for distributions or sale proceeds received after
    December&#160;31, 2012, if the holder is a foreign entity that
    fails to satisfy applicable disclosure and certification
    requirements regarding its owners and account holders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition, for taxable years of the Fund beginning before
    January&#160;1, 2012, properly reported dividends are generally
    exempt from U.S.&#160;federal withholding tax where they
    (i)&#160;are paid in respect of the Fund&#146;s &#147;qualified
    net interest income&#148; (generally, the Fund&#146;s
    <FONT style="white-space: nowrap">U.S.-source</FONT>
    interest income, other than certain contingent interest and
    interest from obligations of a corporation or partnership in
    which the Fund is at least a 10% shareholder, reduced by
    expenses that are allocable to such income) or (ii)&#160;are
    paid in respect of the Fund&#146;s &#147;qualified short-term
    capital gains&#148; (generally, the excess of the Fund&#146;s
    net short-term capital gain over the Fund&#146;s long-term
    capital loss for such taxable year). Depending on its
    circumstances, however, the Fund may report all, some or none of
    its potentially eligible dividends as such qualified net
    interest income or as qualified short-term capital gains,
    <FONT style="white-space: nowrap">and/or</FONT> treat
    such dividends, in whole or in part, as ineligible for this
    exemption from withholding. In order to qualify for this
    exemption from withholding, a foreign investor will need to
    comply with applicable certification requirements relating to
    its
    <FONT style="white-space: nowrap">non-U.S.&#160;status</FONT>
    (including, in general, furnishing an IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    or substitute Form). In the case of shares held through an
    intermediary, the intermediary may withhold even if the Fund
    reports the payment as qualified net interest income or
    qualified short-term capital gain. Foreign investors should
    contact their intermediaries with respect to the application of
    these rules to their accounts. There can be no assurance as to
    what portion of the Fund&#146;s distributions will qualify for
    favorable treatment as qualified net interest income or
    qualified short-term capital gains.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Foreign investors should consult their tax advisers regarding
    the tax consequences of investing in the Fund&#146;s shares.
</DIV>
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    <BR>
    37
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund may be required to withhold U.S.&#160;federal income
    tax on all taxable distributions and redemption proceeds payable
    to non-corporate shareholders who fail to provide the Fund with
    their correct taxpayer identification number or to make required
    certifications, or who have been notified by the IRS that they
    are subject to backup withholding. Backup withholding is not an
    additional tax. Any amounts withheld may be refunded or credited
    against such shareholder&#146;s U.S.&#160;federal income tax
    liability, if any, provided that the required information is
    furnished to the IRS.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Noteholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This discussion assumes that the notes will not be issued with
    original issue discount for U.S.&#160;federal income tax
    purposes. Accordingly, noteholders will be required to include
    payments of interest on the notes in their gross income in
    accordance with their method of accounting for U.S.&#160;federal
    income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any gain from the disposition of the notes will be treated as
    capital gain for noteholders who hold the notes as capital
    assets and as long-term capital gain if the notes have been held
    for more than one year as of the date of disposition. However, a
    portion of such gain may be required to be treated as ordinary
    income under special rules of the Code governing the treatment
    of market discount. A noteholder who acquires a note at a market
    discount (i.e., at a price less than the principal amount or the
    &#147;adjusted issue price&#148; as determined for tax purposes,
    if relevant), such as a subsequent purchaser of the notes, will
    be required to treat as ordinary income a portion of any gain
    realized upon a disposition of the note equal to the amount of
    market discount deemed to have been accrued as of the date of
    disposition unless an election is made to include such discount
    in income on a current basis. A noteholder who acquires a note
    at a market discount and does not elect to include such discount
    in income on a current basis will be required to defer deduction
    of a portion of interest paid or accrued on debt incurred or
    continue to purchase or carry the note until the noteholder
    disposes of the note. These rules may have an effect on the
    price that can be obtained upon the sale of a note. Amounts
    received upon a sale or redemption of the notes will be subject
    to tax as ordinary income to the extent of any accrued and
    unpaid interest on the notes as of the date of redemption.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund is required in certain circumstances to backup
    withholding on interest distributions paid to non-corporate
    holders of the Fund&#146;s notes who do not furnish the Fund
    with their correct taxpayer identification number (in the case
    of individuals, their social security number) and certain
    certifications, or who are otherwise subject to backup
    withholding. Backup withholding is not an additional tax. Any
    amounts withheld from payments made to you may be refunded or
    credited against your U.S.&#160;federal income tax liability, if
    any, provided that the required information is furnished to the
    IRS.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If you are a foreign investor, the payment of interest on the
    notes generally will be considered &#147;portfolio
    interest&#148; and thus generally will be exempt from
    U.S.&#160;withholding tax and U.S.&#160;federal income tax. This
    exemption will apply to you provided that (1)&#160;interest paid
    on the notes is not effectively connected with your conduct of a
    trade or business in the United States, (2)&#160;you are not a
    bank whose receipt of interest on the notes is described in
    Section&#160;881(c)(3)(A) of the Code, (3)&#160;you do not
    actually or constructively own 10&#160;percent or more of the
    combined voting power of all classes of the Fund&#146;s stock
    entitled to vote, (4)&#160;you are not a controlled foreign
    corporation that is related, directly or indirectly, to the Fund
    through stock ownership, and (5)&#160;you satisfy the
    certification requirements described below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    To satisfy the certification requirements, either (1)&#160;the
    holder of any notes must certify, under penalties of perjury,
    that such holder is a
    <FONT style="white-space: nowrap">non-U.S.&#160;person</FONT>
    and must provide such owner&#146;s name, address and taxpayer
    identification number, if any, on IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN,</FONT>
    or (2)&#160;a securities clearing organization, bank or other
    financial institution that holds customer securities in the
    ordinary course of its trade or business and holds the notes on
    behalf of the holder thereof must certify, under penalties of
    perjury, that it has received a valid and properly executed IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    from the beneficial holder and comply with certain other
    requirements. Special certification rules apply for notes held
    by a foreign partnership and other intermediaries.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Interest on notes received by a foreign investor that is not
    excluded from U.S.&#160;federal withholding tax under the
    portfolio interest exemption as described above generally will
    be subject to 30% U.S.&#160;withholding tax, unless a reduced
    rate of withholding or a withholding exemption is provided under
    applicable treaty law.
</DIV>
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    <BR>
    38
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In order to obtain such a reduced rate of withholding, a foreign
    investor will be required to provide an IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    certifying its entitlement to benefits under a treaty.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Any capital gain that a foreign investor realizes on a sale,
    exchange or other disposition of notes generally will be exempt
    from United States federal income tax, including withholding tax.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Different tax consequences may result (i)&#160;if the foreign
    investor is engaged in a trade or business in the United States,
    (ii)&#160;in the case of an individual, if the foreign investor
    is present in the United States for 183&#160;days or more during
    a taxable year and certain other conditions are met, or
    (iii)&#160;for distributions or sale proceeds received after
    December&#160;31, 2012, if the holder is a foreign entity that
    fails to satisfy applicable disclosure and certification
    requirements regarding its owners and account holders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B><I>The foregoing is a general and abbreviated summary of the
    applicable provisions of the Code and Treasury regulations
    presently in effect. For the complete provisions, reference
    should be made to the pertinent Code sections&#160;and the
    Treasury regulations promulgated thereunder. The Code and the
    Treasury regulations are subject to change by legislative,
    judicial or administrative action, either prospectively or
    retroactively. Persons considering an investment in our
    shares&#160;or notes&#160;should consult their own tax advisers
    regarding the purchase, ownership and disposition of our
    shares&#160;or notes.</I></B>
</DIV>

<A name='Y91316133'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">NET ASSET
    VALUE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Portfolio Valuation.</I>&#160;&#160;The net asset value of
    the Fund&#146;s common shares will be computed based on the
    market value of the assets it holds and will generally be
    determined daily as of the close of regular trading on the NYSE.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Portfolio securities listed or traded on a nationally recognized
    securities exchange or traded in the
    <FONT style="white-space: nowrap">U.S.&#160;over-the-counter</FONT>
    market for which market quotations are readily available are
    valued at the last quoted sale price or a market&#146;s official
    closing price as of the close of business on the day the
    securities are being valued. If there were no sales that day,
    the security is valued at the average of the closing bid and
    asked prices, or, if there were no asked prices quoted on such
    day, the security is valued at the most recently available price
    or, if the Board of Trustees so determines, by such other method
    as the Board of Trustees shall determine in good faith, to
    reflect its fair market value. Portfolio securities traded on
    more than one national securities exchange or market are valued
    according to the broadest and most representative market, as
    determined by the Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Portfolio securities primarily traded on foreign markets are
    generally valued at the preceding closing values of such
    securities on their respective exchanges or if after the close,
    market conditions change significantly, certain foreign
    securities may be fair valued pursuant to procedures established
    by the Board of Trustees. Debt instruments with remaining
    maturities of 60&#160;days or less that are not credit impaired
    are valued at amortized cost, unless the Board of Trustees
    determines such does not reflect fair value, in which case these
    securities will be valued at their fair value as determined by
    the Board of Trustees. Debt instruments having a maturity
    greater than 60&#160;days for which market quotations are
    readily available are valued at the average of the latest bid
    and asked prices. If there were no asked prices quoted on such
    day, the security is valued using the closing bid price. Futures
    contracts are valued at the closing settlement price of the
    exchange or board of trade on which the applicable contract is
    traded.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Securities and assets for which market quotations are not
    readily available are valued at their fair value as determined
    in good faith under procedures established by and under the
    general supervision of the Board of Trustees. Fair valuation
    methodologies and procedures may include, but are not limited
    to: analysis and review of available financial and non-financial
    information about the company; comparisons to the valuation and
    changes in valuation of similar securities, including a
    comparison of foreign securities to the equivalent
    U.S.&#160;dollar value ADR securities at the close of the
    U.S.&#160;exchange; and evaluation of any other information that
    could be indicative of the value of the security.
</DIV>
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    <BR>
    39
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Funds obtain valuations on the basis of prices provided by a
    pricing service approved by the Board of Trustees. All other
    investment assets, including restricted and not readily
    marketable securities, are valued in good faith at fair value
    under procedures established by and under the general
    supervision and responsibility of the Trust&#146;s Board of
    Trustees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition, whenever developments in one or more securities
    markets after the close of the principal markets for one or more
    portfolio securities and before the time as of which the Funds
    determine their net asset value would, if such developments had
    been reflected in such principal markets, likely have more than
    a minimal effect on a Fund&#146;s net asset value per share,
    such Fund may fair value such portfolio securities based on
    available market information as of the time each Fund determines
    its net asset value.
</DIV>

<A name='Y91316134'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">BENEFICIAL
    OWNERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As of March&#160;31, 2011, Mario J. Gabelli and his affiliates*
    were known to the Fund to own 5% or more of the Fund&#146;s
    outstanding common shares of the Fund.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As of March&#160;31, 2011, there were no persons known to the
    Fund to be beneficial owners of more than 5% of the Fund&#146;s
    outstanding preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As of December&#160;31, 2010, the Directors and officers of the
    Fund as a group beneficially owned approximately 11.7% of the
    Fund&#146;s outstanding common shares and 1.1% of the
    Fund&#146;s outstanding preferred shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Mr.&#160;Gabelli and his affiliates owned 10.6% of the
    outstanding common shares of the Fund as of March&#160;31, 2011.
    This amount includes 315,775&#160;shares owned directly by
    Mr.&#160;Gabelli, 10, 000&#160;shares owned by a family
    partnership for which Mr.&#160;Gabelli serves as general
    partner, and 1,103, 031&#160;shares owned by GAMCO Investors,
    Inc. or its affiliates. Mr.&#160;Gabelli disclaims beneficial
    ownership of the shares held by the discretionary accounts and
    by the entities named except to the extent of his interest in
    such entities.</TD>
</TR>

</TABLE>

<A name='Y91316135'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">GENERAL
    INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Book-Entry-Only
    Issuance</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    DTC will act as securities depository for the shares of fixed
    rate preferred shares
    <FONT style="white-space: nowrap">and/or</FONT>
    auction market rate preferred shares offered pursuant to the
    Prospectus. The information in this section concerning DTC and
    DTC&#146;s book-entry system is based upon information obtained
    from DTC. The securities offered hereby initially will be issued
    only as fully-registered securities registered in the name of
    Cede&#160;&#038; Co. (as nominee for DTC). One or more
    fully-registered global security certificates initially will be
    issued, representing in the aggregate the total number of
    securities, and deposited with DTC.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    DTC is a limited-purpose trust company organized under the New
    York Banking Law, a &#147;banking organization&#148; within the
    meaning of the New York Banking Law, a member of the Federal
    Reserve System, a &#147;clearing corporation&#148; within the
    meaning of the New York Uniform Commercial Code and a
    &#147;clearing agency&#148; registered pursuant to the
    provisions of Section&#160;17A of the Securities Exchange Act of
    1934, as amended. DTC holds securities that its participants
    deposit with DTC. DTC also facilities the settlement among
    participants of securities transactions, such as transfers and
    pledges, in deposited securities through electronic computerized
    book-entry changes in participants&#146; accounts, thereby
    eliminating the need for physical movement of securities
    certificates. Direct DTC participants include securities brokers
    and dealers, banks, trust companies, clearing corporations and
    certain other organizations. Access to the DTC system is also
    available to others such as securities brokers and dealers,
    banks and trust companies that clear through or maintain a
    custodial relationship with a direct participant, either
    directly or indirectly through other entities.
</DIV>
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    <BR>
    40
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Purchases of securities within the DTC system must be made by or
    through direct participants, which will receive a credit for the
    securities on DTC&#146;s records. The ownership interest of each
    actual purchaser of a security, a beneficial owner, is in turn
    to be recorded on the direct or indirect participants&#146;
    records. Beneficial owners will not receive written confirmation
    from DTC of their purchases, but beneficial owners are expected
    to receive written confirmations providing details of the
    transactions, and periodic statements of their holdings, from
    the direct or indirect participants through which the beneficial
    owners purchased securities. Transfers of ownership interests in
    securities are to be accomplished by entries made on the books
    of participants acting on behalf of beneficial owners.
    Beneficial owners will not receive certificates representing
    their ownership interests in securities, except as provided
    herein.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    DTC has no knowledge of the actual beneficial owners of the
    securities being offered pursuant to this Prospectus; DTC&#146;s
    records reflect only the identity of the direct participants to
    whose accounts such securities are credited, which may or may
    not be the beneficial owners. The participants will remain
    responsible for keeping account of their holdings on behalf of
    their customers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Conveyance of notices and other communications by DTC to direct
    participants, by direct participants to indirect participants,
    and by direct participants and indirect participants to
    beneficial owners will be governed by arrangements among them,
    subject to any statutory or regulatory requirements as may be in
    effect from time to time.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Payments on the securities will be made to DTC. DTC&#146;s
    practice is to credit direct participants&#146; accounts on the
    relevant payment date in accordance with their respective
    holdings shown on DTC&#146;s records unless DTC has reason to
    believe that it will not receive payments on such payment date.
    Payments by participants to beneficial owners will be governed
    by standing instructions and customary practices and will be the
    responsibility of such participant and not of DTC or the Fund,
    subject to any statutory or regulatory requirements as may be in
    effect from time to time. Payment of distributions to DTC is the
    responsibility of the Fund, disbursement of such payments to
    direct participants is the responsibility of DTC, and
    disbursement of such payments to the beneficial owners is the
    responsibility of direct and indirect participants. Furthermore
    each beneficial owner must rely on the procedures of DTC to
    exercise any rights under the securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    DTC may discontinue providing its services as securities
    depository with respect to the securities at any time by giving
    reasonable notice to the Fund. Under such circumstances, in the
    event that a successor securities depository is not obtained,
    certificates representing the securities will be printed and
    delivered.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Proxy
    Voting Procedures</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund has adopted the proxy voting procedures of the
    Investment Adviser and has directed the Investment Adviser to
    vote all proxies relating to the Fund&#146;s voting securities
    in accordance with such procedures. The proxy voting procedures
    are attached hereto as Appendix&#160;A. They are also on file
    with the SEC and can be reviewed and copied at the SEC&#146;s
    Public Reference Room in Washington,&#160;D.C., and information
    on the operation of the Public Reference Room may be obtained by
    calling the SEC at
    <FONT style="white-space: nowrap">202-551-8090.</FONT>
    The proxy voting procedures are also available on the EDGAR
    Database on the SEC&#146;s internet site
    <FONT style="white-space: nowrap">(http://www.sec.gov)</FONT>
    and copies of the proxy voting procedures may be obtained, after
    paying a duplicating fee, by electronic request at the follow
    <FONT style="white-space: nowrap">E-mail</FONT>
    address: publicinfo@sec.gov, or by writing the SEC&#146;s Public
    Reference Section, Washington,&#160;D.C.
    <FONT style="white-space: nowrap">20549-0102.</FONT>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Code of
    Ethics</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund and the Investment Adviser have adopted a code of
    ethics (the &#147;Code of Ethics&#148;) under
    <FONT style="white-space: nowrap">Rule&#160;17j-1</FONT>
    under the 1940 Act. The Code of Ethics permits personnel,
    subject to the Code of Ethics and its restrictive provisions, to
    invest in securities, including securities that may be purchased
    or held by the Fund. The Code of Ethics can be reviewed and
    copied at the SEC&#146;s Public Reference Room in
    Washington,&#160;D.C. Information on the operations of the
    Reference Room may be obtained by calling the SEC at
    <FONT style="white-space: nowrap">202-551-8090.</FONT>
    The Code of Ethics is also available on the EDGAR database on
    the SEC&#146;s Internet web site at
    <FONT style="white-space: nowrap">http://www.sec.gov.</FONT>
    Copies of the Code of Ethics may also be obtained, after paying
    a duplicating fee, by
</DIV>
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    <BR>
    41
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    electronic request at the following
    <FONT style="white-space: nowrap">e-mail</FONT>
    address: publicinfo@sec.gov, or by writing the SEC&#146;s Public
    Reference Room, Washington,&#160;D.C.
    <FONT style="white-space: nowrap">20549-0102.</FONT>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Joint
    Code of Conduct for Chief Executive and Senior Financial
    Officers</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Fund and the Investment Adviser have adopted a code of
    conduct for the principal executive and financial officers. This
    code of conduct sets forth policies to guide the principal
    executive and financial officers in the performance of their
    duties. The code of conduct is on file with the SEC and can be
    reviewed and copied at the SEC&#146;s Public Reference Room in
    Washington,&#160;D.C., and information on the operation of the
    Public Reference Room may be obtained by calling the Commission
    at
    <FONT style="white-space: nowrap">202-551-8090.</FONT>
    The code of conduct is also available on the EDGAR Database on
    the SEC&#146;s Internet web site at
    <FONT style="white-space: nowrap">http://www.sec.gov,</FONT>
    and copies of the code of conduct may be obtained, after paying
    a duplicating fee, by electronic request at the following
    <FONT style="white-space: nowrap">e-mail</FONT>
    address: publicinfo@sec.gov, or by writing the SEC&#146;s Public
    Reference Room, Washington,&#160;D.C.
    <FONT style="white-space: nowrap">20549-0102.</FONT>
</DIV>

<A name='Y91316136'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">FINANCIAL
    STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The audited financial statements included in the Annual Report
    to the Fund&#146;s Shareholders for the year ended
    December&#160;31, 2010, together with the report of
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;]
    thereon, are incorporated herein by reference from the
    Fund&#146;s annual report. All other portions of the annual
    report are not incorporated herein by reference and are not part
    of the Registration Statement. A copy of the annual report may
    be obtained without charge by writing to the Fund at its address
    at One Corporate Center, Rye, New York
    <FONT style="white-space: nowrap">10580-1422</FONT>
    or by calling the Fund toll-free at 800-GABELLI
    <FONT style="white-space: nowrap">(422-3554).</FONT>
</DIV>
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    <BR>
    42
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="right" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">APPENDIX&#160;A</FONT></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">GAMCO
    INVESTORS, INC. and AFFILIATES<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Voting of Proxies on Behalf of Clients</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <FONT style="white-space: nowrap">Rules&#160;204(4)-2</FONT>
    and <FONT style="white-space: nowrap">204-2</FONT>
    under the Investment Advisers Act of 1940 and
    <FONT style="white-space: nowrap">Rule&#160;30b1-4</FONT>
    under the Investment Company Act of 1940 require investment
    advisers to adopt written policies and procedures governing the
    voting of proxies on behalf of their clients.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    These procedures will be used by GAMCO Asset Management Inc.,
    Gabelli Funds, LLC, Gabelli Securities, Inc., and Teton
    Advisors, Inc. (collectively, the &#147;Advisers&#148;) to
    determine how to vote proxies relating to portfolio securities
    held by their clients, including the procedures that the
    Advisers use when a vote presents a conflict between the
    interests of the shareholders of an investment company managed
    by one of the Advisers, on the one hand, and those of the
    Advisers; the principal underwriter; or any affiliated person of
    the investment company, the Advisers, or the principal
    underwriter. These procedures will not apply where the Advisers
    do not have voting discretion or where the Advisers have agreed
    to with a client to vote the client&#146;s proxies in accordance
    with specific guidelines or procedures supplied by the client
    (to the extent permitted by ERISA).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">I.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Proxy
    Voting Committee</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Proxy Voting Committee was originally formed in April 1989
    for the purpose of formulating guidelines and reviewing proxy
    statements within the parameters set by the substantive proxy
    voting guidelines originally published in 1988 and updated
    periodically, a copy of which are appended as Exhibit&#160;A.
    The Committee will include representatives of Research,
    Administration, Legal, and the Advisers. Additional or
    replacement members of the Committee will be nominated by the
    Chairman and voted upon by the entire Committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Meetings are held as needed basis to form views on the manner in
    which the Advisers should vote proxies on behalf of their
    clients.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In general, the Director of Proxy Voting Services, using the
    Proxy Guidelines, recommendations of Institutional Shareholder
    Corporate Governance Service (&#147;ISS&#148;), other
    third-party services and the analysts of Gabelli&#160;&#038;
    Company, Inc., will determine how to vote on each issue. For
    non-controversial matters, the Director of Proxy Voting Services
    may vote the proxy if the vote is: (1)&#160;consistent with the
    recommendations of the issuer&#146;s Board of Directors and not
    contrary to the Proxy Guidelines; (2)&#160;consistent with the
    recommendations of the issuer&#146;s Board of Directors and is a
    non-controversial issue not covered by the Proxy Guidelines; or
    (3)&#160;the vote is contrary to the recommendations of the
    Board of Directors but is consistent with the Proxy Guidelines.
    In those instances, the Director of Proxy Voting Services or the
    Chairman of the Committee may sign and date the proxy statement
    indicating how each issue will be voted.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    All matters identified by the Chairman of the Committee, the
    Director of Proxy Voting Services or the Legal Department as
    controversial, taking into account the recommendations of ISS or
    other third party services and the analysts of
    Gabelli&#160;&#038; Company, Inc., will be presented to the
    Proxy Voting Committee. If the Chairman of the Committee, the
    Director of Proxy Voting Services or the Legal Department has
    identified the matter as one that (1)&#160;is controversial;
    (2)&#160;would benefit from deliberation by the Proxy Voting
    Committee; or (3)&#160;may give rise to a conflict of interest
    between the Advisers and their clients, the Chairman of the
    Committee will initially determine what vote to recommend that
    the Advisers should cast and the matter will go before the
    Committee.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>A.&#160;Conflicts of Interest.</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Advisers have implemented these proxy voting procedures in
    order to prevent conflicts of interest from influencing their
    proxy voting decisions. By following the Proxy Guidelines, as
    well as the recommendations of ISS, other third-party services
    and the analysts of Gabelli&#160;&#038; Company, the Advisers
</DIV>
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    <BR>
    A-1
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    are able to avoid, wherever possible, the influence of potential
    conflicts of interest. Nevertheless, circumstances may arise in
    which one or more of the Advisers are faced with a conflict of
    interest or the appearance of a conflict of interest in
    connection with its vote. In general, a conflict of interest may
    arise when an Adviser knowingly does business with an issuer,
    and may appear to have a material conflict between its own
    interests and the interests of the shareholders of an investment
    company managed by one of the Advisers regarding how the proxy
    is to be voted. A conflict also may exist when an Adviser has
    actual knowledge of a material business arrangement between an
    issuer and an affiliate of the Adviser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In practical terms, a conflict of interest may arise, for
    example, when a proxy is voted for a company that is a client of
    one of the Advisers, such as GAMCO Asset Management Inc. A
    conflict also may arise when a client of one of the Advisers has
    made a shareholder proposal in a proxy to be voted upon by one
    or more of the Advisers. The Director of Proxy Voting Services,
    together with the Legal Department, will scrutinize all proxies
    for these or other situations that may give rise to a conflict
    of interest with respect to the voting of proxies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    <B>B.&#160;</B>
</TD>
    <TD align="left">
    <B>Operation of Proxy Voting Committee</B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    For matters submitted to the Committee, each member of the
    Committee will receive, prior to the meeting, a copy of the
    proxy statement, any relevant third party research, a summary of
    any views provided by the Chief Investment Officer and any
    recommendations by Gabelli&#160;&#038; Company, Inc. analysts.
    The Chief Investment Officer or the Gabelli&#160;&#038; Company,
    Inc. analysts may be invited to present their viewpoints. If the
    Director of Proxy Voting Services or the Legal Department
    believe that the matter before the committee is one with respect
    to which a conflict of interest may exist between the Advisers
    and their clients, counsel will provide an opinion to the
    Committee concerning the conflict. If the matter is one in which
    the interests of the clients of one or more of Advisers may
    diverge, counsel will so advise and the Committee may make
    different recommendations as to different clients. For any
    matters where the recommendation may trigger appraisal rights,
    counsel will provide an opinion concerning the likely risks and
    merits of such an appraisal action.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Each matter submitted to the Committee will be determined by the
    vote of a majority of the members present at the meeting. Should
    the vote concerning one or more recommendations be tied in a
    vote of the Committee, the Chairman of the Committee will cast
    the deciding vote. The Committee will notify the proxy
    department of its decisions and the proxies will be voted
    accordingly.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Although the Proxy Guidelines express the normal preferences for
    the voting of any shares not covered by a contrary investment
    guideline provided by the client, the Committee is not bound by
    the preferences set forth in the Proxy Guidelines and will
    review each matter on its own merits. Written minutes of all
    Proxy Voting Committee meetings will be maintained. The Advisers
    subscribe to ISS, which supplies current information on
    companies, matters being voted on, regulations, trends in proxy
    voting and information on corporate governance issues.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 4%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If the vote cast either by the analyst or as a result of the
    deliberations of the Proxy Voting Committee runs contrary to the
    recommendation of the Board of Directors of the issuer, the
    matter will be referred to legal counsel to determine whether an
    amendment to the most recently filed Schedule&#160;13D is
    appropriate.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">II.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Social
    Issues and Other Client Guidelines</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If a client has provided special instructions relating to the
    voting of proxies, they should be noted in the client&#146;s
    account file and forwarded to the proxy department. This is the
    responsibility of the investment professional or sales assistant
    for the client. In accordance with Department of Labor
    guidelines, the Advisers&#146; policy is to vote on behalf of
    ERISA accounts in the best interest of the plan participants
    with regard to social issues that carry an economic impact.
    Where an account is not governed by ERISA, the Advisers will
    vote shares held on behalf of the client in a manner consistent
    with any individual investment/voting guidelines provided by the
    client. Otherwise the Advisers will abstain with respect to
    those shares.
</DIV>
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    <BR>
    A-2
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">III.
    Client Retention of Voting Rights</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    If a client chooses to retain the right to vote proxies or if
    there is any change in voting authority, the following should be
    notified by the investment professional or sales assistant for
    the client.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="3%"></TD>
    <TD width="93%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Operations
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Proxy Department
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Investment professional assigned to the account
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In the event that the Board of Directors (or a Committee
    thereof) of one or more of the investment companies managed by
    one of the Advisers has retained direct voting control over any
    security, the Proxy Voting Department will provide each Board
    Member (or Committee member) with a copy of the proxy statement
    together with any other relevant information including
    recommendations of ISS or other third-party services.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="4%"></TD>
    <TD width="96%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">IV.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Proxies
    of Certain
    <FONT style="white-space: nowrap">Non-U.S.&#160;Issuers</FONT></FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Proxy voting in certain countries requires
    &#147;share-blocking.&#148; Shareholders wishing to vote their
    proxies must deposit their shares shortly before the date of the
    meeting with a designated depository. During the period in which
    the shares are held with a depository, shares that will be voted
    at the meeting cannot be sold until the meeting had taken place
    and the shares are returned to the clients&#146; custodian.
    Absent a compelling reason to the contrary, the Advisers believe
    that the benefit to the client of exercising the vote is
    outweighed by the cost of voting and therefore, the Advisers
    will not typically vote the securities of
    <FONT style="white-space: nowrap">non-U.S.&#160;issuers</FONT>
    that require share-blocking.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In addition, voting proxies of issuers in non-US markets may
    also give rise to a number of administrative issues to prevent
    the Advisers from voting such proxies. For example, the Advisers
    may receive the notices for shareholder meetings without
    adequate time to consider the proposals in the proxy or after
    the cut-off date for voting. Other markets require the Advisers
    to provide local agents with power of attorney prior to
    implementing their respective voting instructions on the proxy.
    Although it is the Advisers&#146; policies to vote the proxies
    for its clients for which they have proxy voting authority, in
    the case of issuers in non-US markets, we vote client proxies on
    a best efforts basis.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">V.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Voting
    Records</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Proxy Voting Department will retain a record of matters
    voted upon by the Advisers for their clients. The Advisers will
    supply information on how they voted a client&#146;s proxy upon
    request from the client.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The complete voting records for each registered investment
    company (the &#147;Fund&#148;) that is managed by the Advisers
    will be filed on
    <FONT style="white-space: nowrap">Form&#160;N-PX</FONT>
    for the twelve months ended June&#160;30th, no later than
    August&#160;31st&#160;of each year. A description of the
    Fund&#146;s proxy voting policies, procedures, and how the Fund
    voted proxies relating to portfolio securities is available
    without charge, upon request, by (i)&#160;calling 800-GABELLI
    <FONT style="white-space: nowrap">(800-422-3554);</FONT>
    (ii)&#160;writing to Gabelli Funds, LLC at One Corporate Center,
    Rye, NY
    <FONT style="white-space: nowrap">10580-1422;</FONT>
    or (iii)&#160;visiting the SEC&#146;s website at www.sec.gov.
    Question should we post the proxy voting records for the funds
    on the website.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Advisers&#146; proxy voting records will be retained in
    compliance with
    <FONT style="white-space: nowrap">Rule&#160;204-2</FONT>
    under the Investment Advisers Act.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="5%"></TD>
    <TD width="95%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">VI.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Voting
    Procedures</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    1.&#160;Custodian banks, outside brokerage firms and clearing
    firms are responsible for forwarding proxies directly to the
    Advisers.
</DIV>
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    <BR>
    A-3
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Proxies are received in one of two forms:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Shareholder Vote Instruction&#160;Forms
    (&#147;VIFs&#148;)&#160;&#151; Issued by Broadridge Financial
    Solutions, Inc. (&#147;Broadridge&#148;). Broadridge is an
    outside service contracted by the various institutions to issue
    proxy materials.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Proxy cards which may be voted directly.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    2.&#160;Upon receipt of the proxy, the number of shares each
    form represents is logged into the proxy system, electronically
    or manually, according to security.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    3.&#160;Upon receipt of instructions from the proxy committee
    (see Administrative), the votes are cast and recorded for each
    account on an individual basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Records have been maintained on the Proxy Edge system.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Proxy Edge records include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 8%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Security Name and Cusip Number<BR>
    Date and Type of Meeting (Annual, Special, Contest)<BR>
    Client Name<BR>
    Adviser or Fund&#160;Account Number<BR>
    Directors&#146; Recommendation<BR>
    How the Adviser voted for the client on item
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    4.&#160;VIFs are kept alphabetically by security. Records for
    the current proxy season are located in the Proxy Voting
    Department office. In preparation for the upcoming season, files
    are transferred to an offsite storage facility during
    January/February.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    5.&#160;If a proxy card or VIF is received too late to be voted
    in the conventional matter, every attempt is made to vote
    including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="2%"></TD>
    <TD width="92%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    When a solicitor has been retained, the solicitor is called. At
    the solicitor&#146;s direction, the proxy is faxed.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    In some circumstances VIFs can be faxed to Broadridge up until
    the time of the meeting.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    6.&#160;In the case of a proxy contest, records are maintained
    for each opposing entity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    7.&#160;Voting in Person
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    a)&#160;At times it may be necessary to vote the shares in
    person. In this case, a &#147;legal proxy&#148; is obtained in
    the following manner:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Banks and brokerage firms using the services at Broadridge:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Broadridge is notified that we wish to vote in person.
    Broadridge issues individual legal proxies and sends them back
    via email or overnight (or the Adviser can pay messenger
    charges). A lead-time of at least two weeks prior to the meeting
    is needed to do this. Alternatively, the procedures detailed
    below for banks not using Broadridge may be implemented.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Banks and brokerage firms issuing proxies directly:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The bank is called
    <FONT style="white-space: nowrap">and/or</FONT> faxed
    and a legal proxy is requested.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    All legal proxies should appoint:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <B>&#147;Representative of [Adviser name] with full power of
    substitution.&#148;</B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    b)&#160;The legal proxies are given to the person attending the
    meeting along with the limited power of attorney.
</DIV>
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    <BR>
    A-4
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Appendix&#160;A<BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">


</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">Proxy
    Guidelines</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PROXY
    VOTING GUIDELINES</FONT></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">General
    Policy Statement</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    It is the policy of GAMCO Investors, Inc, and its affiliated
    advisers (collectively &#147;the Advisers&#148;) to vote in the
    best economic interests of our clients. As we state in our Magna
    Carta of Shareholders Rights, established in May 1988, we are
    neither <I>for </I>nor <I>against </I>management. We are for
    shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    At our first proxy committee meeting in 1989, it was decided
    that each proxy statement should be evaluated on its own merits
    within the framework first established by our Magna Carta of
    Shareholders Rights. The attached guidelines serve to enhance
    that broad framework.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We do not consider any issue routine. We take into consideration
    all of our research on the company, its directors, and their
    short and long-term goals for the company. In cases where issues
    that we generally do not approve of are combined with other
    issues, the negative aspects of the issues will be factored into
    the evaluation of the overall proposals but will not necessitate
    a vote in opposition to the overall proposals.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Board
    of Directors</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We do not consider the election of the Board of Directors a
    routine issue. Each slate of directors is evaluated on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Factors taken into consideration include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Historical responsiveness to shareholders
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This may include such areas as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="3%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Paying greenmail
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Failure to adopt shareholder resolutions receiving a majority of
    shareholder votes
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Qualifications
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Nominating committee in place
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Number of outside directors on the board
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Attendance at meetings
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Overall performance
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Selection
    of Auditors</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In general, we support the Board of Directors&#146;
    recommendation for auditors.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Blank
    Check Preferred Stock</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We oppose the issuance of blank check preferred stock.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Blank check preferred stock allows the company to issue stock
    and establish dividends, voting rights, etc. without further
    shareholder approval.
</DIV>
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    <BR>
    A-5
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Classified
    Board</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    A classified board is one where the directors are divided into
    classes with overlapping terms. A different class is elected at
    each annual meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    While a classified board promotes continuity of directors
    facilitating long range planning, we feel directors should be
    accountable to shareholders on an annual basis. We will look at
    this proposal on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis taking into consideration the board&#146;s historical
    responsiveness to the rights of shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Where a classified board is in place we will generally not
    support attempts to change to an annually elected board.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    When an annually elected board is in place, we generally will
    not support attempts to classify the board.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Increase
    Authorized Common Stock</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The request to increase the amount of outstanding shares is
    considered on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Factors taken into consideration include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Future use of additional shares
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="3%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Stock split
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Stock option or other executive compensation plan
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Finance growth of company/strengthen balance sheet
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Aid in restructuring
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Improve credit rating
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#151;&#160;
</TD>
    <TD align="left">
    Implement a poison pill or other takeover defense
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Amount of stock currently authorized but not yet issued or
    reserved for stock option plans
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Amount of additional stock to be authorized and its dilutive
    effect
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We will support this proposal if a detailed and verifiable plan
    for the use of the additional shares is contained in the proxy
    statement.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Confidential
    Ballot</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We support the idea that a shareholder&#146;s identity and vote
    should be treated with confidentiality.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    However, we look at this issue on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In order to promote confidentiality in the voting process, we
    endorse the use of independent Inspectors of Election.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Cumulative
    Voting</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In general, we support cumulative voting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Cumulative voting is a process by which a shareholder may
    multiply the number of directors being elected by the number of
    shares held on record date and cast the total number for one
    candidate or allocate the voting among two or more candidates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Where cumulative voting is in place, we will vote against any
    proposal to rescind this shareholder right.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Cumulative voting may result in a minority block of stock
    gaining representation on the board. When a proposal is made to
    institute cumulative voting, the proposal will be reviewed on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis. While
</DIV>
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    <BR>
    A-6
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    we feel that each board member should represent all
    shareholders, cumulative voting provides minority shareholders
    an opportunity to have their views represented.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Director
    Liability and Indemnification</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We support efforts to attract the best possible directors by
    limiting the liability and increasing the indemnification of
    directors, except in the case of insider dealing.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Equal
    Access to the Proxy</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The SEC&#146;s rules provide for shareholder resolutions.
    However, the resolutions are limited in scope and there is a 500
    word limit on proponents&#146; written arguments. Management has
    no such limitations. While we support equal access to the proxy,
    we would look at such variables as length of time required to
    respond, percentage of ownership, etc.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Fair
    Price Provisions</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Charter provisions requiring a bidder to pay all shareholders a
    fair price are intended to prevent two-tier tender offers that
    may be abusive. Typically, these provisions do not apply to
    board-approved transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We support fair price provisions because we feel all
    shareholders should be entitled to receive the same benefits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Reviewed on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Golden
    Parachutes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Golden parachutes are severance payments to top executives who
    are terminated or demoted after a takeover.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We support any proposal that would assure management of its own
    welfare so that they may continue to make decisions in the best
    interest of the company and shareholders even if the decision
    results in them losing their job. We do not, however, support
    excessive golden parachutes. Therefore, each proposal will be
    decided on a case-by- case basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <I>Note: Congress has imposed a tax on any parachute that is
    more than three times the executive&#146;s average annual
    compensation</I>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Anti-Greenmail
    Proposals</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We do not support greenmail. An offer extended to one
    shareholder should be extended to all shareholders equally
    across the board
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Limit
    Shareholders&#146; Rights to Call Special Meetings</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We support the right of shareholders to call a special meeting.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Consideration
    of Nonfinancial Effects of a Merger</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This proposal releases the directors from only looking at the
    financial effects of a merger and allows them the opportunity to
    consider the merger&#146;s effects on employees, the community,
    and consumers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As a fiduciary, we are obligated to vote in the best economic
    interests of our clients. In general, this proposal does not
    allow us to do that. Therefore, we generally cannot support this
    proposal.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    A-7
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Reviewed on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Mergers,
    Buyouts, Spin-Offs, Restructurings</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Each of the above is considered on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis. According to the Department of Labor, we are not required
    to vote for a proposal simply because the offering price is at a
    premium to the current market price. We may take into
    consideration the long term interests of the shareholders.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Military
    Issues</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Shareholder proposals regarding military production must be
    evaluated on a purely economic set of criteria for our ERISA
    clients. As such, decisions will be made on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In voting on this proposal for our non-ERISA clients, we will
    vote according to the client&#146;s direction when applicable.
    Where no direction has been given, we will vote in the best
    economic interests of our clients. It is not our duty to impose
    our social judgment on others.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Northern
    Ireland</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Shareholder proposals requesting the signing of the MacBride
    principles for the purpose of countering the discrimination of
    Catholics in hiring practices must be evaluated on a purely
    economic set of criteria for our ERISA clients. As such,
    decisions will be made on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In voting on this proposal for our non-ERISA clients, we will
    vote according to client direction when applicable. Where no
    direction has been given, we will vote in the best economic
    interests of our clients. It is not our duty to impose our
    social judgment on others.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Opt
    Out of State Anti-Takeover Law</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    This shareholder proposal requests that a company opt out of the
    coverage of the state&#146;s takeover statutes. Example:
    Delaware law requires that a buyer must acquire at least 85% of
    the company&#146;s stock before the buyer can exercise control
    unless the board approves.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We consider this on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis. Our decision will be based on the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    State of Incorporation
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Management history of responsiveness to shareholders
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Other mitigating factors
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Poison
    Pill</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In general, we do not endorse poison pills.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    In certain cases where management has a history of being
    responsive to the needs of shareholders and the stock is very
    liquid, we will reconsider this position.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Reincorporation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Generally, we support reincorporation for well-defined business
    reasons. We oppose reincorporation if proposed solely for the
    purpose of reincorporating in a state with more stringent
    anti-takeover statutes that may negatively impact the value of
    the stock.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    A-8
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Stock
    Incentive Plans</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Director and Employee Stock incentive plans are an excellent way
    to attract, hold and motivate directors and employees. However,
    each incentive plan must be evaluated on its own merits, taking
    into consideration the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="4%"></TD>
    <TD width="2%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Dilution of voting power or earnings per share by more than 10%.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Kind of stock to be awarded, to whom, when and how much.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Method of payment.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    Amount of stock already authorized but not yet issued under
    existing stock plans.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    The successful steps taken by management to maximize shareholder
    value.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Supermajority
    Vote Requirements</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Supermajority vote requirements in a company&#146;s charter or
    bylaws require a level of voting approval in excess of a simple
    majority of the outstanding shares. In general, we oppose
    supermajority-voting requirements. Supermajority requirements
    often exceed the average level of shareholder participation. We
    support proposals&#146; approvals by a simple majority of the
    shares voting.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Limit
    Shareholders Right to Act by Written Consent</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Written consent allows shareholders to initiate and carry on a
    shareholder action without having to wait until the next annual
    meeting or to call a special meeting. It permits action to be
    taken by the written consent of the same percentage of the
    shares that would be required to effect proposed action at a
    shareholder meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Reviewed on a
    <FONT style="white-space: nowrap">case-by-case</FONT>
    basis.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Say on
    Pay and Say When on Pay</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    We will generally abstain from advisory votes on executive
    compensation (Say on Pay) and will also abstain from votes on
    the frequency of voting on executive compensation (Say When on
    Pay). In those instances when we believe that it is in our
    clients&#146; best interest, we may cast a vote for or against
    executive compensation
    <FONT style="white-space: nowrap">and/or</FONT> the
    frequency of votes on executive compensation.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <BR>
    A-9
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">PART&#160;C<BR>
    OTHER INFORMATION</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;25.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Financial
    Statements and Exhibits</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    1.&#160;Financial Statements
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Part&#160;A
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    None
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Part&#160;B
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Statement of Assets and Liabilities as of December&#160;31, 2010
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Statement of Operations for the Period Ended December&#160;31,
    2010
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Statement of Changes in Net Assets
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 8%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Report of Independent Registered Public Accounting Firm
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    2.&#160;Exhibits
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 4%; margin-right: 0%">
<TABLE border="0" width="96%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="91%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (a)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (i)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Articles of Amendment and Restatement of Registrant (2)
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (ii)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Articles Supplementary for the 6.00% Series B Cumulative
    Preferred Stock (1)
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (iii)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Articles Supplementary for the Series ___
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;]
    Preferred Stock (1)
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (b)&#160;Amended and Restated By-Laws of Registrant (1)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (c)&#160;Not applicable
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 4%; margin-right: 0%">
<TABLE border="0" width="96%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="91%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (d)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (i)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Specimen Common Stock Certificate (3)
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (ii)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Specimen for Series __
    [&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;]
    Preferred Stock (1)
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (iii)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Indenture (1)
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (e)&#160;Automatic Dividend Reinvestment and Voluntary Cash
    Purchase Plan of Registrant (3)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (f)&#160;Not applicable
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (g)&#160;Form of Investment Advisory Agreement between
    Registrant and Gabelli Funds, LLC (4)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (h)&#160;Form of Underwriting Agreement (1)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (i)&#160;Not applicable
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (j)&#160;Form of Custodian Contract (5)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 4%; margin-right: 0%">
<TABLE border="0" width="96%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="91%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (k)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (i)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Registrar, Transfer Agency and Service Agreement (3)
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (ii)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Broker-Dealer Agreement (2)
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (iii)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of DTC Agreement (2)
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (l)&#160;Opinion and Consent of Skadden, Arps, Slate,
    Meagher&#160;&#038; Flom LLP with respect to legality (1)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (m)&#160;Not applicable
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="margin-left: 4%; margin-right: 0%">
<TABLE border="0" width="96%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="92%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (n)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (i)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Independent Registered Public Accounting Firm (1)
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (ii)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Powers of Attorney (1)
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (o)&#160;Not applicable
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (p)&#160;Not applicable
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (q)&#160;Not applicable
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
<DIV style="margin-left: 4%; margin-right: 0%">
<TABLE border="0" width="96%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="92%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    (r)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (i)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Codes of Ethics of the Fund and the Investment Adviser (1)
</TD>
</TR>
<TR valign="bottom" style="line-height: 6pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    (ii)
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Joint Code of Ethics for Chief Executive and Senior Financial
    Officers (1)
</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    (1) </TD>
    <TD></TD>
    <TD valign="bottom">
    To be filed by Amendment.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    (2) </TD>
    <TD></TD>
    <TD valign="bottom">
    Incorporated by reference to the Registrant&#146;s Pre-Effective
    Amendment No.&#160;4 to the Fund&#146;s Registration Statement
    on
    <FONT style="white-space: nowrap">Form&#160;N-2</FONT>
    Nos.
    <FONT style="white-space: nowrap">333-102494</FONT>
    and
    <FONT style="white-space: nowrap">811-05715,</FONT>
    as filed with the Securities and Exchange Commission on
    March&#160;13, 2003.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (3) </TD>
    <TD></TD>
    <TD valign="bottom">
    Incorporated by reference to the Registrant&#146;s Pre-Effective
    Amendment No.&#160;3 to the Fund&#146;s Registration Statement
    on
    <FONT style="white-space: nowrap">Form&#160;N-2</FONT>
    Nos.
    <FONT style="white-space: nowrap">333-26644</FONT>
    and
    <FONT style="white-space: nowrap">811-05715,</FONT>
    as filed with the Securities and Exchange Commission on
    March&#160;31, 1995.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (4) </TD>
    <TD></TD>
    <TD valign="bottom">
    Incorporated by reference from the Registrant&#146;s
    Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;N-1A,</FONT>
    File Nos.
    <FONT style="white-space: nowrap">33-26644</FONT> and
    <FONT style="white-space: nowrap">811-05715,</FONT>
    as filed with the Securities and Exchange Commission on
    January&#160;17, 1989.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (5) </TD>
    <TD></TD>
    <TD valign="bottom">
    Incorporated by reference from the Registrant&#146;s
    Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;N-2,</FONT>
    File No.
    <FONT style="white-space: nowrap">333-24541</FONT>
    and
    <FONT style="white-space: nowrap">811-05715,</FONT>
    as filed with the Securities and Exchange Commission on
    May&#160;9, 1997</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (6) </TD>
    <TD></TD>
    <TD valign="bottom">
    Incorporated by reference from the Registrant&#146;s
    Registration Statement on
    <FONT style="white-space: nowrap">Form&#160;N-2,</FONT>
    File No.
    <FONT style="white-space: nowrap">333-149938</FONT>
    and
    <FONT style="white-space: nowrap">811-05715,</FONT>
    as filed with the Securities and Exchange Commission on
    March&#160;28, 2008.</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD valign="top">
    (7) </TD>
    <TD></TD>
    <TD valign="bottom">
    Filed herewith.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;26.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Marketing
    Arrangements</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Reference is made to Exhibit&#160;2(h) to this Registration
    Statement to be filed by amendment.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;27.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Expenses of Issuance and Distribution</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The following table sets forth the estimated expenses to be
    incurred in connection with the offering described in this
    Registration Statement:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="91%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    NYSE listing fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    50,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    SEC Registration fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    7,680
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Rating Agency Fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    15,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Printing/engraving expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    75,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accounting fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    20,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Transfer Agent fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Legal fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    150,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Blue Sky fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Miscellaneous
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    57,320
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Total estimate
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    375,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;28.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Persons
    Controlled by or Under Common Control with
    Registrant</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    None
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;29.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Number
    of Holders of Securities as of March&#160;31, 2011</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="83%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="7%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="7%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Number of Record<BR>
    </B>
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title of Class</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Holders</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Common Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,471
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    6.00% Series&#160;B Cumulative Preferred Stock
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    4
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;30.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnification</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Reference is made to (a)&#160;Article&#160;VI of
    Exhibit&#160;2(a)(i) to this Registration Statement;
    (b)&#160;Section&#160;9 of Exhibit&#160;2(g) to this
    Registration Statement. Indemnification provisions under the
    Registrant&#146;s underwriting agreement to be provided by
    amendment.
</DIV>
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<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;31.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Business
    and Other Connections of Investment Adviser</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The Investment Adviser, a limited liability company organized
    under the laws of the State of New York, acts as investment
    adviser to the Registrant. The Registrant is fulfilling the
    requirement of this Item&#160;30 to provide a list of the
    officers and directors of the Investment Adviser, together with
    information as to any other business, profession, vocation or
    employment of a substantial nature engaged in by the Investment
    Adviser or those officers and directors during the past two
    years, by incorporating by reference the information contained
    in the Form&#160;ADV of the Investment Adviser filed with the
    commission pursuant to the Investment Advisers Act of 1940
    (Commission File
    <FONT style="white-space: nowrap">No.&#160;801-26202).</FONT>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;32.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Location
    of Accounts and Records</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The accounts and records of the Registrant are maintained in
    part at the office of the Investment Adviser at One Corporate
    Center, Rye, New York
    <FONT style="white-space: nowrap">10580-1422,</FONT>
    in part at the offices of the Fund&#146;s custodian, State
    Street Bank and Trust&#160;Company, at 1776 Heritage Drive,
    North Quincy, Massachusetts 02171, in part at the offices of the
    Fund&#146;s
    <FONT style="white-space: nowrap">sub-administrator,</FONT>
    PFPC Inc., at 760 Moore Road, King of Prussia, PA 19406, and in
    part at the offices of the Fund&#146;s transfer agent,
    Computershare Trust&#160;Company, N.A., at 250 Royall Street,
    Canton, Massachusetts 02021.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;33.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Management
    Services</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Not applicable.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;34.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Undertakings</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    1.&#160;Registrant undertakes to suspend the offering of shares
    until the prospectus is amended, if subsequent to the effective
    date of this registration statement, its net asset value
    declines more than ten percent from its net asset value, as of
    the effective date of the registration statement or its net
    asset value increases to an amount greater than its net proceeds
    as stated in the prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    2.&#160;Not applicable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    3.&#160;Not applicable.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    4.&#160;Registrant hereby undertakes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (a)&#160;to file, during and period in which offers or sales are
    being made, a post-effective amendment to this Registration
    Statement:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (1)&#160;to include any prospectus required by
    Section&#160;10(a)(3) of the Securities Act of 1933;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (2)&#160;to reflect in the prospectus any facts or events 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;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (3)&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (b)&#160;that for the purpose of determining any liability under
    the Securities Act of 1933 (the &#147;1933&#160;Act&#148;), each
    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;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (c)&#160;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;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (d)&#160;that, for the purpose of determining liability under
    the 1933&#160;Act to any purchaser, if the Registrant is subject
    to Rule&#160;430C: Each prospectus filed pursuant to
    Rule&#160;497(b), (c), (d)&#160;or (e)&#160;under the
    1933&#160;Act as part of a registration statement relating to an
    offering, other than prospectuses filed in reliance on
    Rule&#160;430A under the 1933&#160;Act shall be deemed to be
    part of and included in the registration statement as of the
    date it is first used after effectiveness. <I>Provided, however,
    </I>that no statement made in a registration statement or
    prospectus
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    that is part of the registration or made in a document
    incorporated or deemed incorporated by reference into the
    registration statement or prospectus that is part of the
    registration statement will, as to a purchaser with a time of
    contract of sale prior to such first use, supersede or modify
    any statement that was made in the registration statement or
    prospectus that was part of the registration statement or made
    in any such document immediately prior to such date of first use.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (e)&#160;that for the purpose of determining liability of the
    Registrant under the 1933&#160;Act to any purchaser in the
    initial distribution of securities:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    The undersigned Registrant undertakes that in a primary offering
    of securities of the undersigned Registrant pursuant to this
    registration statement, regardless of the underwriting method
    used to sell the securities to the purchaser, if the securities
    are offered or sold to such purchaser by means of any of the
    following communications, the undersigned Registrant will be a
    seller to the purchaser and will be considered to offer or sell
    such securities to the purchaser:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (1)&#160;any preliminary prospectus or prospectus of the
    undersigned Registrant relating to the offering required to be
    filed pursuant to Rule&#160;497 under the 1933&#160;Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (2)&#160;the portion of any advertisement pursuant to
    Rule&#160;482 under the 1933&#160;Act relating to the offering
    containing material information about the undersigned Registrant
    or its securities provided by or on behalf of the undersigned
    Registrant;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    (3)&#160;any other communication that is an offer in the
    offering made by the undersigned Registrant to the purchaser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    5.&#160;Registrant undertakes that, for the purpose of
    determining any liability under the 1933&#160;Act, the
    information omitted from the form of prospectus filed as part of
    the Registration Statement in reliance upon Rule&#160;430A and
    contained in the form of prospectus filed by the Registrant
    pursuant to Rule&#160;497(h) will be deemed to be a part of the
    Registration Statement as of the time it was declared effective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Registrant undertakes that, for the purpose of determining any
    liability under the 1933&#160;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.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    6.&#160;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
    Statement of Additional Information constituting Part&#160;B of
    this Registration Statement.
</DIV>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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    <B><FONT style="font-family: 'Times New Roman', Times">SIGNATURES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As required by the Securities Act of 1933, this
    Registrant&#146;s Registration Statement has been signed on
    behalf of the Registrant, in the City of Rye, State of New York,
    on the 17th day of May, 2011.
</DIV>

<DIV style="margin-top: 14pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    THE GABELLI CONVERTIBLE INCOME AND SECURITIES FUND INC.
</DIV>

<DIV style="margin-top: 28pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD align="left">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Bruce
    N. Alpert</FONT></DIV>
</TD>
</TR>

</TABLE>

<DIV style="font-size: 2pt; margin-left: 53%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    Bruce N. Alpert
</DIV>

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    President and Principal Executive Officer
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 4%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
    As required by the Securities Act of 1933, as amended, this
    Registration Statement has been signed below by the following
    persons in the capacities set forth below on the 17th day of
    May, 2011.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="37%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="56%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>NAME</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>TITLE</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 12pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Mario
    J. Gabelli
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Director, Chairman and Chief Investment Officer
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>E.
    Val Cerutti
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Anthony
    J. Colavita
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Dugald
    A. Fletcher
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Anthony
    R. Pustorino
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Werner
    J. Roeder
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Anthonie
    C. van Ekris
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%"><FONT style="font-variant: SMALL-CAPS">*</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Salvatore
    J. Zizza
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Director
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Bruce
    N. Alpert</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Bruce
    N. Alpert
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    President (Principal Executive Officer)
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Agnes
    Mullady</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Agnes
    Mullady
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Treasurer (Principal Financial and Accounting Officer)
</TD>
</TR>
<TR valign="bottom" style="line-height: 10pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">Bruce
    N. Alpert</FONT></DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV>Bruce
    N. Alpert
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Attorney-in-Fact
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    Pursuant to a Power of Attorney</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#Y91316tocpage">Table of Contents</A></H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: transparent">

    <B><FONT style="font-family: 'Times New Roman', Times">EXHIBIT&#160;INDEX</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
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<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
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</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: transparent">

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