Common use of PERFORMANCE INCENTIVE ADJUSTMENT Clause in Contracts

PERFORMANCE INCENTIVE ADJUSTMENT. In addition to an asset charge, the fee for the Fund shall include a performance incentive adjustment. The performance incentive adjustment shall be based on the Fund's performance compared to an index of similar funds (the "Index"). Current Indexes are shown below. These Indexes may change as set forth below. INVESTMENT FUND LIPPER INDEX CATEGORY ---- ----------------------------- ---------- RiverSource Balanced Fund Lipper Balanced Funds Balanced RiverSource Disciplined Large Cap Growth Fund Lipper Large-Cap Growth Funds Equity RiverSource Diversified Equity Income Fund Lipper Equity Income Funds Equity RiverSource Mid Cap Value Fund Lipper Mid Cap Value Funds Equity The performance incentive adjustment is determined by measuring the percentage difference over a rolling 12-month period between the performance of one Class A share of the Fund and the change in performance of the Index. The performance difference will then be used to determine the adjustment rate. The adjustment rate, computed to five decimal places, is determined in accordance with the table below, and is applied against average daily net assets for the applicable rolling 12-month period. EQUITY FUNDS BALANCED FUNDS ------------------------------------------------ -------------------------------------------------- PERFORMANCE PERFORMANCE DIFFERENCE ADJUSTMENT RATE DIFFERENCE ADJUSTMENT RATE ----------- -------------------------------- ------------- ---------------------------------- 0.00%-0.50% 0 0.00%-0.50% 0 0.50%-1.00% 6 basis points times the 0.50%-1.00% 6 basis points times the performance difference over performance difference over 0.50%, 0.50%, times 100 (maximum of 3 times 100 (maximum of 3 basis basis points if a 1% performance points if a 1% performance difference) difference)

PERFORMANCE INCENTIVE ADJUSTMENT. In addition to an asset charge, the fee for the Fund shall include a performance incentive adjustment. The performance incentive adjustment shall be based on the Fund's performance compared to an index of similar funds (the "Index"). Current Indexes are shown below. These Indexes may change as set forth below. INVESTMENT FUND LIPPER INDEX CATEGORY ---- --------------------------------------------- ----------------------------- ---------- RiverSource Balanced Fund Lipper Balanced Funds Balanced RiverSource Disciplined Large Cap Growth Fund Lipper Large-Cap Growth Funds Equity RiverSource Disciplined Large Cap Value Fund Lipper Large-Cap Value Funds Equity RiverSource Diversified Equity Income Fund Lipper Equity Income Funds Equity RiverSource Mid Cap Value Fund Lipper Mid Mid-Cap Value Funds Equity The performance incentive adjustment is determined by measuring the percentage difference over a rolling 12-month period between the performance of one Class A share of the Fund and the change in performance of the Index. The performance difference will then be used to determine the adjustment rate. The adjustment rate, computed to five decimal places, is determined in accordance with the table below, and is applied against average daily net assets for the applicable rolling 12-month period. EQUITY FUNDS BALANCED FUNDS ------------------------------------------------ -------------------------------------------------- PERFORMANCE PERFORMANCE DIFFERENCE ADJUSTMENT RATE DIFFERENCE ADJUSTMENT RATE ----------- -------------------------------- ------------- ---------------------------------- 0.00%-0.50% 0 0.00%-0.50% 0 0.50%-1.00% 6 basis points times the 0.50%-1.00% 6 basis points times the performance difference over performance difference over 0.50%, 0.50%, times 100 (maximum of 3 times 100 (maximum of 3 basis basis points if a 1% performance points if a 1% performance difference) difference)

PERFORMANCE INCENTIVE ADJUSTMENT. In addition to an asset chargeAfter calculating the Base Fee, the fee for the Fund shall include a performance incentive adjustmentadjustment ("Performance Adjustment") shall be calculated separately for each Fund on a monthly basis, subject to the Transition Rules set forth in Paragraph 3. The performance incentive adjustment Performance Adjustment shall be based on the Fund's performance compared to the performance of the index identified below (each, an index of similar funds (the "Index"). Current Indexes are shown ) multiplied by an adjustment rate, discussed below. These Indexes The Index applicable to each Fund may change as in accordance with the "Change in Index" rules set forth below. INVESTMENT -------------------------------------------------------------------------------- FUND LIPPER INDEX CATEGORY ---- ----------------------------- ---------- -------------------------------------------------------------------------------- RiverSource Balanced Small Cap Advantage Fund Lipper Balanced Funds Balanced ▇▇▇▇▇▇▇ 2000 Index -------------------------------------------------------------------------------- RiverSource Disciplined Large VP Small Cap Growth Advantage Fund Lipper Large-Cap Growth Funds Equity RiverSource Diversified Equity Income Fund Lipper Equity Income Funds Equity RiverSource Mid Cap Value Fund Lipper Mid Cap Value Funds Equity ▇▇▇▇▇▇▇ 2000 Index -------------------------------------------------------------------------------- The performance incentive adjustment Performance Adjustment is determined by first measuring the percentage difference over a rolling 12-month period between the performance of one the Allocated Portion of each Fund (net of expenses equal to the expense ratio reflected in the performance of Class A share shares of the Fund entire Small Cap Advantage Fund, before any Fund-level performance incentive adjustment, or net of VP fund expenses equal to the expense ratio for the VP Small Cap Advantage Fund, before any Fund-level performance incentive adjustment) and the change in performance of the IndexIndex applicable to that Fund ("Performance Difference"). The performance difference Performance Difference will then be used to determine in the calculation with the adjustment raterate in accordance with the table set forth below ("Adjustment Rate"). The adjustment rateAdjustment Rate, computed to five decimal places, is determined in accordance with the table below, and is applied against average daily net assets for the applicable rolling 12-month periodperiod to provide the Performance Adjustment. EQUITY FUNDS BALANCED FUNDS ------------------------------------------------ -------------------------------------------------- PERFORMANCE -------------------------------------------------------------------------------- PERFORMANCE DIFFERENCE ADJUSTMENT RATE DIFFERENCE ADJUSTMENT RATE ----------- -------------------------------- ------------- ---------------------------------- 0.00%-0.50(CALCULATION) -------------------------------------------------------------------------------- 0.00%-4.00% 0 0.00%-0.50% 0 0.50%-1.00% 6 basis points times the 0.50%-1.00% 6 3 basis points times the performance difference over performance difference over 0.50%, 0.50%difference, times 100 -------------------------------------------------------------------------------- 4.00% or more 12 basis points -------------------------------------------------------------------------------- For example, if the Performance Difference is 2.38% for the applicable period, the adjustment rate calculation equals 0.000714 (maximum of 3 times 100 (maximum of 0.0003 [3 basis basis points if points] x 2.38% x 100)). Rounded to five decimal places, the Adjustment Rate is 0.00071, which is then applied against average daily net assets of the Allocated Portion for the applicable period to determine an annualized Performance Adjustment. The actual Performance Adjustment will then be pro-rated to the number of days in the month for which the fee is calculated. Where the performance of the Allocated Portion of a Fund (less expenses) exceeds that of the Index, the fee paid to Kenwood will increase by an amount equal to the Performance Adjustment. Where the performance of the Index exceeds the performance of the Allocated Portion of a Fund (less expenses), the fee paid to Kenwood will decrease by the Performance Adjustment. The 12-month comparison period rolls over with each succeeding month, so that it always equals 12 months, ending with the month for which the performance is being computed. Change in Index If the Index ceases to be published for a period of more than 90 days, changes in any material respect, otherwise becomes impracticable or, at the discretion of the Boards of Directors ("Board") in consultation with RiverSource Investments, LLC, is no longer appropriate to use for purposes of a Performance Adjustment, the Board may take action it deems appropriate and in the best interests of shareholders, including: (1% performance points if ) discontinuance of the Performance Adjustment until such time as it approves a 1% performance differencesubstitute index, or (2) difference)adoption of a methodology to transition to a substitute index it has approved.