Morgan Stanley Smith Barney LLC offers investors a broad spectrum of mutual fund products (collectively referred to as the "Mutual Fund Network"), including some of the largest and most well known mutual fund families.** In order to participate in the Mutual Fund Network, fund families, or their affiliates, are required to enter into a financial arrangement involving, among other things, payment of additional amount to Morgan Stanley Smith Barney.

Fund Families make these payments (sometimes referred to as "revenue-sharing payments") in order to receive the opportunity to distribute their funds through Morgan Stanley Smith Barney's branch system, including the opportunity for fund personnel to visit Morgan Stanley Smith Barney branch offices where they may, among other things, market the fund family and educate Financial Advisors about the funds.*** These payments are negotiated separately and not all fund families pay the same amount or pay according to the same formula.

The following fund families participate in the Mutual Fund Network:

Aberdeen Funds, The Alger Funds, Allegiant Funds, AllianceBernstein, American Century Investments, American Funds, Aquila Group of Funds, BlackRock Funds, Calamos Family of Funds, Calvert, Cohen & Steers, Columbia Management, Credit Suisse Funds, Davis Funds, Delaware Investments Family of Funds, Diamond Hill Funds, Dreyfus, DWS Funds, Eagle Family of Funds, Eaton Vance, Evergreen Investments, Federated Investors, Inc., Fidelity Advisor, Fifth Third Asset Management, First American Funds, First Eagle Funds, Forward Emerald Funds, Franklin Templeton Investments, FundVantage Trust, GAMCO Investors, Inc., GE Funds, Goldman Sachs Asset Management, The Hartford Mutual Funds, Henderson Global Funds, Highland Funds, HighMark Funds, Hotchkis and Wiley Funds, ING Funds, Integrity Mutual Funds, Invesco Aim Investments, Ivy Funds, Janus Funds, JennisonDryden and Strategic Partners Mutual Funds, John Hancock Funds, LLC, JPMorgan Funds, Keeley Family of Funds, Kinetics Mutual Funds, Inc., Legg Mason Partners Funds, Lord Abbett, MainStay Funds, Managers Investment Group, MFS Investments, Morgan Stanley Funds, The Munder Funds, Nationwide Mutual Funds, NATIXIS Funds, Neuberger Berman Funds, Nuveen Investments, Old Mutual Investment Partners, The Olstein Funds, OppenheimerFunds, PIMCO Funds & Allianz Funds, Pioneer Investments, Principal Funds Distributors, Inc., Putnam Investments, RiverSource Investments, LLC, RS Investments, Rydex Funds Services Inc., Seligman Advisors, Inc., The Sentinel Funds, SunAmerica Capital Services, Inc., Thornburg Investment Management, Touchstone Investments, Transamerica Funds, UBS Funds, Van Eck Global, Van Kampen Investments, Victory Funds, Virtus Funds, and Wells Fargo Advantage Funds.

As noted above, these fund families make additional payments to Morgan Stanley Smith Barney. For those fund families that have agreed to make revenue-sharing payments based on a combination of mutual fund sales and assets, such payments may be up 20 basis points (0.20%) on mutual fund sales and up to five basis points (0.05%) on the total value of shares of fund family assets based on the value at the close of each quarter. For those fund families that have agreed to make an agreed upon annual, fixed payment, such payments are negotiated in advance and made regardless of actual sales or assets during the specified period. As such, these payments are not based on a specific formula that can be expressed as a number of basis points based on sales or assets. Except as noted below, Morgan Stanley Smith Barney will retrospectively calculate the amount that it would have received based on actual sales and assets and return any amounts that would exceed 20 basis points (0.20%) based on sales and 20 basis points (0.20%) based on assets. For certain fund families that make a fixed minimum revenue-sharing payment and have limited actual sales and assets, the basis point amount calculated retrospectively based on actual sales and assets may exceed the amounts described above. Money market funds, as discussed below, are not included in these calculations. In addition, Morgan Stanley Smith Barney may receive payments from these fund families for their participation in certain internal events, such as seminars, conferences and meetings.

Morgan Stanley Smith Barney does not accept revenue sharing payments with respect to mutual fund sales or assets that are held through non-taxable accounts (e.g., accounts held by pension and profit-sharing plans subject to ERISA, IRAs, public employer pension accounts) in Morgan Stanley Fund SolutionSM, Morgan Stanley Custom PortfolioSM, Morgan Stanley Advisory and Morgan Stanley Personal PortfolioSM. However, with respect to assets held through taxable accounts in Morgan Stanley Fund SolutionSM, Morgan Stanley Custom PortfolioSM, Morgan Stanley Advisory and Morgan Stanley Personal PortfolioSM, Morgan Stanley Smith Barney receives up to 12 basis points (0.12%) based on the mutual fund assets attributable to such accounts. For those fund families that make a fixed, annual payment regardless of actual mutual fund sales or assets, Morgan Stanley Smith Barney attributes 12 basis points on actual assets in such accounts when allocating the fixed amount paid by those fund families.

Morgan Stanley Smith Barney has also entered into financial agreements with fund families in the Mutual Fund Network pursuant to which Morgan Stanley Smith Barney and/or an affiliate receives additional amounts for the provision of recordkeeping and administrative services. The following fund families have entered into agreements whereby Morgan Stanley Smith Barney has agreed to provide client sub-accounting services with respect to Morgan Stanley Smith Barney clients’ holdings in the fund family and to transact business on an omnibus account basis: AIM/INVESCO, AllianceBernstein, Allianz/ PIMCO, American Funds, BlackRock, Calamos, Columbia, Davis, Dreyfus, Eaton Vance, Enterprise, Federated, Franklin Templeton, Goldman Sachs, Janus, JPMorgan, Legg Mason, Lord Abbett, Morgan Stanley, Managers, Nuveen, Oppenheimer, Prudential, Scudder, Seligman, and Van Kampen. For providing those services to those fund families, Morgan Stanley Smith Barney receives up to a maximum amount of $20 per fund per non-advisory account and advisory non-ERISA account per year, except for certain share classes where a maximum of 10 basis points annually on assets held in such accounts may be received. Morgan Stanley Smith Barney receives up to 10 basis points annually on assets held in ERISA advisory accounts. The remaining fund families within the Mutual Fund Network have entered into agreements whereby Morgan Stanley Smith Barney receives up to a maximum of $13 per fund position for providing recordkeeping under Level 3 networking arrangements and up to five basis points annually on assets held in ERISA advisory accounts.

The legal entity from which these payments are received for each participating fund family, as applicable, is as follows:

Morgan Stanley Smith Barney LLC has entered into an arrangement with Morgan Stanley Funds with respect to money market funds whereby the Funds’ investment manager pays to Morgan Stanley Smith Barney LLC an amount up to 0.18 percent (18 basis points) annually of the value of the shares of the following money market funds held in Morgan Stanley Smith Barney LLC accounts: New York Municipal Money Market Trust, Tax-Free Daily Income Trust, U.S. Government Money Market Trust, Liquid Asset Fund, Active Assets California Tax Free Trust, Active Assets Government Securities Trust, Active Assets Tax Free Trust, Active Assets Money Trust, and California Tax-Free Daily Income Trust. Morgan Stanley Funds’ investment manager pays Morgan Stanley Smith Barney LLC 0.03 percent (3 basis points) annually of the value of shares held in Morgan Stanley Smith Barney LLC accounts of the Active Assets Institutional Government Securities Trust and the Active Assets Institutional Money Trust. A portion of the three-basis-point payment made with respect to the Active Asset Institutional Government Securities Trust and the Active Assets Institutional Money Trust is paid to financial advisors based upon the Financial Advisors’ payout rates.

Morgan Stanley Smith Barney LLC has entered into an arrangement with Morgan Stanley Liquidity Money Market Funds whereby the Funds’ investment manager pays to Morgan Stanley Smith Barney LLC an amount equal to 0.03% (3 basis points) annually of the value of the current fund assets for which Morgan Stanley Smith Barney LLC is broker-dealer of record. Such payments are not paid out of assets of the funds and do not affect the share price. A portion of the three basis point payment made with respect to assets held in the Institutional share class is paid to Financial Advisors based upon the Financial Advisors’ payout rates. In addition, with respect to assets held in the Cash Management share class, Morgan Stanley Smith Barney also receives payments for providing distribution services equal to 0.25% (25 basis points) pursuant to the fund’s 12b-1 plan and an additional 0.05% (5 basis points) for administrative services. Your Financial Advisor receives 0.10% (10 basis points) of amounts received by Morgan Stanley Smith Barney paid according to the applicable payout rate.

Morgan Stanley Smith Barney LLC has entered into an arrangement with Morgan Stanley Institutional Fund, Inc. and Morgan Stanley Institutional Fund Trust (the “Institutional Funds”) whereby the Funds’ investment manager pays to Morgan Stanley Smith Barney LLC an amount up to either (i) 0.25 percent (25 basis points) on the value of shares of the funds or (ii) 35% of the management fee received by the fund’s investment advisor. A portion of the payment made with respect to the Institutional Funds is paid to Financial Advisors based upon the Financial Advisors’ payout rates. The payment is also credited to the gross production of branches and therefore also positively affects branch managers’ incentive compensation.

With respect to certain pooled investment vehicles offered outside of the United States or privately placed in the United States, Morgan Stanley Smith Barney LLC may receive from Morgan Stanley Investment Management Limited payment of up to 0.25 percent (25 basis points) annually of the value of assets invested in the funds. In some circumstances, a portion of this payment is paid to Financial Advisors based upon the Financial Advisors’ payout rates.

The following fund families are available for purchase in Morgan Stanley Smith Barney’s fee-based advisory accounts offered through the Morgan Stanley channel of Morgan Stanley Smith Barney. The fund families pay 0.25 percent (25 basis points) per year of the value of the assets of the funds held in your account for recordkeeping and administrative services and with respect to taxable accounts, Morgan Stanley Smith Barney receives a revenue-sharing payment of up to 12 basis points (0.12%) based on the mutual fund assets attributable to such accounts: Alpine Funds, American Century Advisors, Ariel Investments, Artio Funds, Aston Funds, Baron Asset Management, BHR Institutional Funds, BlackRock Funds, Brandes Investment Trust, Cambiar Funds, Cohen & Steers, Columbia Management, Davis Selected Funds, The Delafield Fund, Dreyfus Funds (select funds), Forward Funds, Frontegra Funds, Inc. GAMCO Investors, Inc., Harding Loevner Funds, Inc., Heartland, Hodges Funds, ICON Distributors, Inc., Janus, Lazard Funds, Loomis Sayles Funds, Madison Mosaic Funds, Managers Funds, Matthews Asian Funds, Metropolitan West Asset Management, Needham, Neuberger Berman Funds, Northern Trust Investments, Olstein, Parnassus, Permanent Portfolio Family of Funds, Inc., ProFunds, Quant Funds, Robeco Funds, Roosevelt Funds, Royce Funds, Schroder Funds, T. Rowe Price Advisors, TCW Galileo Funds, Third Avenue, Turner Funds, U.S. Global Investors, Wells Fargo Advantage Funds, William Blair Funds, Wilshire Target and Western Asset Funds, Inc.

Morgan Stanley Smith Barney LLC has entered into arrangements whereby Invesco Aim Advisors, Inc. and MBSC Securities Corp. (a subsidiary of The Dreyfus Corporation) pay to Morgan Stanley Smith Barney LLC from their own assets an amount equal to .35% (35 basis points) of the value of the average daily balance of the shares of certain state specific money market funds maintained in the accounts of Morgan Stanley Smith Barney customers and up to .10% (10 basis points) of the average daily balance of the shares of certain institutional money market funds maintained in the accounts of Morgan Stanley Smith Barney customers. A portion of this payment is paid to Financial Advisors based upon the Financial Advisors’ payout rates. The payment is also credited to the gross production of branches and therefore positively affects branch managers’ incentive compensation.

Morgan Stanley Smith Barney Financial Advisors may offer clients the opportunity to participate in the initial public offering of closed-end funds where Morgan Stanley Smith Barney also acts as the fund’s underwriter. In addition to the applicable portion of the gross spread, Morgan Stanley Smith Barney may be paid a marketing and structuring fee. Such payments are made by the fund’s investment advisor or an affiliate and not by the fund.

* The Mutual Fund Network has replaced the Partners Program, which has been discontinued.

** Morgan Stanley Smith Barney Financial Advisors can assist you in evaluating our mutual fund offerings and selecting the fund that meets your needs.

*** This information is as of June 1, 2009. For additional information regarding these payments, call your Financial Advisor. A current list of funds can be found on our public disclosure site at http://www.morganstanleyindividual.com/OurCommitment/billofrights.asp.