Retirement Plan Quarterly Investment Review All Vendor Summary

Retirement Plan Quarterly Investment Review All Vendor Summary

Prepared for: Plan Name:

Pepperdine University Retirement Plan

Quarter Ending:

June 30, 2009

Table of Contents 

Section 1 – Market Overview  Industry Analysis



Section 2 – Diversified Plan Portfolio Summary  Fund Performance Summary  T. Rowe Price Retirement - Qualitative Analysis Summary  PortfolioXPress Allocation (underlying holdings)   Quantitative Analysis Summary  Fund Evaluation Analysis  Overlap Analysis  Range of Investments  Management Style Analysis  Portfolio Analysis  Portfolio Return vs. Custom Benchmark



Section 3 – Diversified Plan Asset Allocation  Asset Allocation by Fund  Asset Allocation by Category  Asset Allocation Quarterly Comparison  Average Account Balance By Age  Asset Allocation by Age Group  Portfolio Xpress Models



Section 4 – Prudential Plan Portfolio Summary  Fund Performance Summary  Quantitative Analysis Summary  Fund Evaluation Analysis  Management Style Analysis  Portfolio Analysis  Portfolio Return vs. Custom Benchmark





Section 5 – Prudential Plan Asset Allocation  Asset Allocation by Fund  Asset Allocation by Category %  Asset Allocation Quarterly Comparison  Growth of Plan Assets Section 6 – TIAA-CREF Plan Portfolio Summary  Fund Performance Summary  Quantitative Analysis Summary  Fund Evaluation Analysis  Management Style Analysis  Portfolio Analysis  Portfolio Return vs. Custom Benchmark Section 7 – TIAA-CREF Plan Asset Allocation  Asset Allocation by Fund  Asset Allocation by Category %  Asset Allocation Quarterly Comparison ($ and %)  Growth of Plan Assets

Section 1

Market Overview June 30, 2009

2nd Quarter 2009 Market Overview Economic Summary



The U.S. economy remains in a deep recession, although there are signs that the slump is reaching a trough. GDP fell by 6.3% in the fourth quarter followed by a 6.4% drop in the first quarter. Second quarter GDP is estimated to be a 1.5% decline.



Unemployment continues to rise higher in response to big output declines. Even in a best case scenario, the unemployment rate is likely to reach 10% by the end of the year based on economists’ predictions. The current unemployment rate has reached 9.5% with over 6.5 million jobs lost since the beginning of the recession. There are currently an average of 6 applicants for each job posting.



Rebounding oil prices and rising CPI in early 2009 have eased deflation fears but they could revive in a worsening recession. Longer term, some worry about higher inflation due to dramatic monetary and fiscal easing. However, in a competitive economy, inflation will find it difficult to get going before a return to full employment. Headline CPI fell 1.4% during the trailing 12 months ending June 30th and Core CPI rose 1.7% during the same time period.



The Federal Reserve is maintaining low short-term interest rates and buying Treasury and mortgage bonds in an effort to hold long-term rates down. The asset purchases have not been particularly successful so far and an economic recovery is likely to push Treasury rates higher, suggesting bond investors will have to embrace some credit risk to avoid negative returns. The current federal funds rate remains at 0.00% to 0.25%.

Yield Curve



Bond investors began selling off Treasuries during the second quarter pushing the 10-year Treasury yield up from 2.7% at the end of the first quarter to 3.5% by the end of the second quarter which has steepened the yield curve. The 90 day average spread between the 10-year Treasury and the 90-day T-bill has increased to 315 bps, which is well above the historical average of 182 bps.

Investment Returns



Barclays Aggregate Bond Index S&P 500 Index MSCI EAFE Index

Economic Growth (GDP)

Employment

Inflation (CPI)

Interest Rates

1Q09 0.12% -11.01% -13.94%

2Q09 1.78% 15.93% 25.43%

YTD 1.90% 3.16% 7.95%

2008 5.24% -37.00% -43.38%

Source: Standard & Poor’s, FRB, BLS, BEA, JP Morgan. This information is not intended to be used as investment advice. For information only related to a general overview of the market. For plan sponsor use only.

4

2nd Quarter 2009 Market Overview Market Inflection Points, Recessions, and the Unemployment Rate

5

This information is not intended to be used as investment advice. For information only related to a general overview of the market. For plan sponsor use only.

2nd Quarter 2009 Market Overview Economic Expansions and Recessions

6


2nd Quarter 2009 Market Overview Gross Domestic Product

7


2nd Quarter 2009 Market Overview Consumer Finances

8


2nd Quarter 2009 Market Overview Employment

9


2nd Quarter 2009 Market Overview Corporate Profits

10


2nd Quarter 2009 Market Overview Consumer Price Index

11


2nd Quarter 2009 Market Overview The Federal Reserve

12


2nd Quarter 2009 Market Overview Current Account Deficit and U.S. Dollar

13


2nd Quarter 2009 Market Overview Fixed Income Sectors Returns as of 6/30/2009

Source: Barclays Capital, FactSet, JPMorgan Asset Management. Past performance is not indicative of future returns. Fixed income sectors shown above are provided by Barclays Capital and are represented by: Barclays Capital U.S. Aggregate Index; MBS: Fixed Rate MBS Index; Corporate: U.S. Corporates; Municipals: Muni Bond Index; Emerging Debt: Emerging Markets Index; High Yield: Corporate High Yield Index; Treasuries: Barclays Capital U.S. Treasury. TIPS: Barclays Capital Real TIPS. The “balanced” portfolio assumes the following weights: 10% in MBS, 20% in Corporate, 15% in Municipals, 10% in Emerging Debt, 10% in High Yield, 25% in Treasuries, 10% in TIPS. Balanced portfolio assumes annual rebalancing.

14


2nd Quarter 2009 Market Overview Equity Asset Class Returns as of 6/30/2009

15


2nd Quarter 2009 Market Overview Equity Returns by Style as of 6/30/2009

16


2nd Quarter 2009 Market Overview

17

Telecom

Utilities

13.6%

14.0%

9.9%

3.2%

18.3%

3.5%

4.1%

Russell 1000 Growth Weight (%)

10.1%

16.4%

4.3%

5.0%

17.2%

10.0%

3.9%

31.3%

0.6%

1.0%

Russell 1000 Value Weight (%)

9.0%

5.9%

19.6%

22.9%

9.9%

10.0%

3.6%

4.9%

6.4%

7.7%

2Q09 Return

18.1

9.8

10.7

35.7

8.9

18.9

16.3

19.7

3.4

10.2

15.9

YTD 2009

8.6

-1.8

-2.1

-3.4

0.2

-5.9

13.9

24.9

-4.0

-1.7

3.2

1 Year Annualized Return

-16.8

-10.3

-41.4

-38.6

-11.5

-34.5

-38.9

-18.3

-19.3

-28.2

-26.2


-10.1

1.3

-2.2

-25.9

-2.5

-12.5

-5.6

-1.7

-3.5

-1.2

-8.2


-4.8

2.8

10.2

-13.5

-1.1

-4.2

1.1

-1.5

2.1

7.1

-2.2


-3.0

2.7

7.8

5.2

-0.1

-1.3

2.2

-6.1

-7.8

2.5

-2.2


5.2

9.3

11.9

5.3

10.7

6.5

5.4

9.2

2.9

6.9

6.9

Forward P/E Ratio

14.7x

13.5x

14.5x

14.0x

11.4x

14.1x

19.2x

16.1x

12.4x

12.0x

13.9x

Trailing P/E Ratio

15.3x

14.7x

8.9x

19.7x

14.1x

11.3x

15.3x

16.7x

12.6x

12.2x

13.7x

Trailing 20-year Average P/E Ratio

19.9x

21.7x

19.3x

15.6x

24.8x

20.1x

20.1x

27.3x

18.6x

14.5x

19.9x

S&P 500 Index

Materials

12.4%

Technology

Industrials

12.0%

Health Care

8.9%

Financials

Cons Staples

S&P 500 Weight (%)

Energy

Cons Discretion

S&P Index Sectors – Performance as of 6/30/2009

Source: Standard & Poor’s, Russell Investment Group, JPMorgan Asset Management. This information is not intended to be used as investment advice. For information only related to a general overview of the market. For plan sponsor use only.

2nd Quarter 2009 Market Overview World Equity Market Returns as of 6/30/2009

18


2nd Quarter 2009 Market Overview Index Definitions All indexes are unmanaged and an individual can not invest directly in an index. Index returns do not include fees or expenses. The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market. This index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Although the S&P 500 Index focuses on the large-cap segment of the market, with approximately 75% coverage of U.S. equities, it is also an ideal proxy for the total market. The Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index The MSCI EAFE  Index (Europe, Australia, Far East) is a widely recognized benchmark in the United States to measure international equity performance. It comprises 21 MSCI country indexes, representing the developed markets outside of North America. The MSCI Emerging Markets Indexsm is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Index consists of the following 25 emerging market country indices: Argentina, Brazil, Chile, China, Columbia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. The MSCI Europe Indexsm is a free float-adjusted market capitalization index designed to measure developed market equity performance in Europe. The Index consists of the following developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. The MSCI Pacific Indexsm is a free float-adjusted market capitalization index designed to measure equity market performance in the Pacific region. The Index consists of the following developed market countries: Australia, Hong Kong, Japan, New Zealand and Singapore. The Lehman Brothers U.S. Aggregate Index represents securities that are SEC-registered, taxable, and dollar denominated. The Index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major sectors are subdivided into more specific indexes that are calculated and reported on a regular basis. The U.S. Treasury Index is a component of the U.S. Government Index. The Lehman Brothers High Yield Index covers the universe of fixed rate, non-investment grade debt. Pay-in-kind (PIK) bonds, Eurobonds, and debt issues from countries designated as emerging markets (e.g., Argentina, Brazil, Venezuela, etc.) are excluded, but Canadian and global bonds (SEC registered) of issues in non-EMG countries are included. Original issue zeroes, step-up coupon structures, and 144-As are also included. The Lehman Brothers Emerging Markets Index includes USD-denominated debt from emerging markets in the following regions: Americas, Europe, Middle East, Africa, and Asia. As with other fixed income benchmarks provided by Lehman Brothers, the index is rules-based, which allows for an unbiased view of the marketplace and easy replicability. The Lehman Brother Corporate Bond Index is the Corporate component of the U.S. Credit Index. The Lehman Brother TIPS Index consists of Inflation–Protection securities issued by the U.S. Treasury. The NAREIT Equity REIT Index is designed to provide the most comprehensive assessment of overall industry performance, and includes all tax-qualified real estate investment trusts (REITs) that are listed on the NYSE, the American Stock Exchange or the NASDAQ National Market List.

The CSFB Equity Market Neutral Index takes both long and short positions in stocks with the aim of minimizing exposure to the systematic risk of the market (i.e., a beta of zero).

19


1st Quarter 2009 Market Overview Index Definitions All indexes are unmanaged and an individual can not invest directly in an index. Index returns do not include fees or expenses. The S&P 500 Index is widely regarded as the best single gauge of the U.S. equities market. This index includes a representative sample of 500 leading companies in leading industries of the U.S. economy. Although the S&P 500 Index focuses on the large-cap segment of the market, with approximately 75% coverage of U.S. equities, it is also an ideal proxy for the total market. The Russell 1000 Growth Index measures the performance of those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 Value Index measures the performance of those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index The MSCI EAFE  Index (Europe, Australia, Far East) is a widely recognized benchmark in the United States to measure international equity performance. It comprises 21 MSCI country indexes, representing the developed markets outside of North America. The MSCI Emerging Markets Indexsm is a free float-adjusted market capitalization index that is designed to measure equity market performance in the global emerging markets. The Index consists of the following 25 emerging market country indices: Argentina, Brazil, Chile, China, Columbia, Czech Republic, Egypt, Hungary, India, Indonesia, Israel, Jordan, Korea, Malaysia, Mexico, Morocco, Pakistan, Peru, Philippines, Poland, Russia, South Africa, Taiwan, Thailand, and Turkey. The MSCI Europe Indexsm is a free float-adjusted market capitalization index designed to measure developed market equity performance in Europe. The Index consists of the following developed market country indices: Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. The MSCI Pacific Indexsm is a free float-adjusted market capitalization index designed to measure equity market performance in the Pacific region. The Index consists of the following developed market countries: Australia, Hong Kong, Japan, New Zealand and Singapore. The Lehman Brothers U.S. Aggregate Index represents securities that are SEC-registered, taxable, and dollar denominated. The Index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major sectors are subdivided into more specific indexes that are calculated and reported on a regular basis. The U.S. Treasury Index is a component of the U.S. Government Index. The Lehman Brothers High Yield Index covers the universe of fixed rate, non-investment grade debt. Pay-in-kind (PIK) bonds, Eurobonds, and debt issues from countries designated as emerging markets (e.g., Argentina, Brazil, Venezuela, etc.) are excluded, but Canadian and global bonds (SEC registered) of issues in non-EMG countries are included. Original issue zeroes, step-up coupon structures, and 144-As are also included. The Lehman Brothers Emerging Markets Index includes USD-denominated debt from emerging markets in the following regions: Americas, Europe, Middle East, Africa, and Asia. As with other fixed income benchmarks provided by Lehman Brothers, the index is rules-based, which allows for an unbiased view of the marketplace and easy replicability. The Lehman Brother Corporate Bond Index is the Corporate component of the U.S. Credit Index. The Lehman Brother TIPS Index consists of Inflation–Protection securities issued by the U.S. Treasury. The NAREIT Equity REIT Index is designed to provide the most comprehensive assessment of overall industry performance, and includes all tax-qualified real estate investment trusts (REITs) that are listed on the NYSE, the American Stock Exchange or the NASDAQ National Market List.

The CSFB Equity Market Neutral Index takes both long and short positions in stocks with the aim of minimizing exposure to the systematic risk of the market (i.e., a beta of zero).

20


Section 2

Diversified Plan - Portfolio Summary June 30, 2009

Fund Performance Summary RETURNS AS OF 06/30/09 Fund Name

Asset Class

(%) of Plan

3 Month

YTD

1 Year

Vanguard PRIME Money Market Instl

Money Market

12.37%

0.15

0.52

1.80

3.81

3.56

0.66%

0.00

0.01

0.55

2.80

2.81

0.05

0.10

0.62

2.97

3.12

3.14

0.04

0.14

0.90

3.04

2.85

2.83

0.96

1.94

3.97

4.01

3.81

4.31

0.65

1.37

3.27

4.00

3.99

4.58

0.25

5.51

-2.52

5.32

4.62

N/A

0.66

6.21

-1.11

5.78

4.94

7.24

Federated Government Cash Reserves 3 Month T-Bill Cat: Money Market Guaranteed Pooled Fund

Fixed

8.22%

Cat: Stable Value Vanguard Inflation Protected Securities

Inflation Protected

0.00%

Barclays U.S. TIPS Cat: Inflation Protected Bond Vanguard Intermediate Term Treasury

Intermediate Government

5.40%

Barclays Intermediate Govt. Bond Cat: Intermediate Government Bond PIMCO Total Return Admin

Intermediate Bond

Vanguard Total Bond Market Index

N/A

0.21

N/A

N/A

0.60

N/A

1.59

0.20

Outperform

1.23

0.25

Perform

1.19

5.25

-3.14

4.12

4.22

5.87

-3.05

7.05

8.15

5.72

6.53

-1.44

-1.52

6.42

7.00

5.00

5.63

5.66

5.70

4.23

5.00

6.16

8.99

8.14

6.10

6.74

1.76

0.70

Outperform

0.00%

1.75

2.11

6.13

6.48

4.97

5.74

1.00

0.20

N/A

1.78

1.90

6.05

6.43

5.01

5.98 0.83

0.87

Outperform

0.99

1.00

Outperform

1.58%

8.61%

Russell 1000 Value Cat: Large Value

5.72

5.89

1.64

3.62

3.19

4.82

17.26

22.97

-4.65

1.10

3.86

5.22

22.55

28.99

-3.63

1.77

4.06

4.72

18.13

22.60

-7.76

-0.41

2.37

2.91

12.16

-3.67

-32.02

-7.99

0.56

2.11

16.70

-2.87

-29.03

-11.11

-2.13

-0.15

16.69

1.73

-26.60

-9.92

-2.16

-0.02

2.29%

21.12

6.54

-27.45

-9.01

-1.42

0.71

1.11

0.59

Perform

TIAA-CREF Instl Growth and Income Instl

0.58%

14.03

5.05

-23.62

-2.51

1.57

N/A

0.95

0.33

Outperform

Fidelity Spartan U.S. Equity Index

9.98%

15.95

3.23

-26.19

-8.25

-2.29

-2.32

1.00

0.10

N/A

15.93

3.16

-26.21

-8.22

-2.24

-2.22

Davis NY Venture Y

Large Cap Blend

S&P 500 Cat: Large Blend Fidelity Contrafund

Large Cap Growth

Vanguard PRIMECAP Adm

16.79

4.92

-26.41

-8.34

-2.06

-1.50

4.68%

12.95

5.67

-27.70

-5.15

2.24

2.27

0.83

0.94

Perform

2.53%

14.13

7.93

-24.56

-4.17

1.51

2.84

0.94

0.43

Outperform

16.32

11.53

-24.50

-5.45

-1.83

-4.18

Russell 1000 Growth Cat: Large Growth

15.74

10.50

-27.13

-6.86

-1.81

-2.42

1.12%

16.78

7.92

-18.49

-2.27

3.17

9.23

0.77

1.06

Outperform

0.25%

20.46

9.49

-28.45

-7.94

1.73

N/A

0.95

0.51

Outperform

20.94

3.19

-30.52

-11.07

-0.43

4.00

19.41

6.19

-26.25

-9.28

-1.04

4.37

18.35

8.31

-31.58

-10.09

-0.33

4.19

0.98

0.22

N/A

MSCI US Mid Cap 450 Index/S&P 400 Mid Cap Idx*

18.31

8.36

-31.57

-10.01

-0.24

4.49

Cat: Mid Cap Blend

20.06

10.05

-28.13

-9.00

-1.35

2.90

Perkins Mid Cap Value Inv

Mid Cap Value

TIAA-CREF Instl Mid Cap Value Instl Russell Mid Cap Value Cat: Mid Cap Value Vanguard Mid Cap Index

22

0.08

N/A

1.65

Cat: High Yield Bond Large Cap Value

N/A

2.90

4.67

ML US High Yield Master Eaton Vance Large Cap Value A

3.47

-3.20

Evaluation Methodology

0.16

Cat: Intermediate Term Bond High Yield Bond

Expense Ratio

6.04%

Barclays Aggregate Bond MainStay High Yield Bond I

3 Year Beta

Annualized Return 3 Year 5 Year 10 Year

Mid Cap Blend

Funds listed in Green are scheduled to be added. Funds listed in Red are scheduled to be removed.

1.35%

Funds listed in Blue are frozen to new contributions Funds shaded in Yellow have been placed on the watch list.

Fund Performance Summary (continued) RETURNS AS OF 06/30/09 Fund Name

Asset Class

(%) of Plan

3 Month

Munder Mid-Cap Core Growth A

Mid Cap Growth

1.50%

Russell Mid Cap Growth Cat: Mid Cap Growth Allianz NFJ Small Cap Value Inst

Small Value

Lord Abbett Small Cap Value A

Mutual Discovery Z

Fidelity Spartan International Index

0.97 8.52

0.81

0.82

Outperform

0.36%

18.80

4.43

-23.85

-5.74

3.81

9.27

0.88

1.23

Outperform

18.00

-5.17

-25.24

-12.07

-2.27

5.00

22.68

3.70

-23.55

-10.51

-1.61

5.41

24.09

7.35

-25.22

-9.10

-0.81

3.01

1.00

0.23

N/A

24.10

7.32

-25.37

-9.13

-0.80

3.03

22.27

6.11

-25.97

-10.78

-1.78

4.25

24.26

16.31

-25.51

-7.85

1.65

N/A

0.99

1.04

Outperform

23.38

11.36

-24.85

-7.83

-1.32

-0.89

1.81%

1.75%

21.00

10.72

-26.87

-9.48

-2.27

1.43

0.71%

18.47

9.99

-24.82

-3.64

3.23

3.83

0.89

0.75

Outperform

0.72%

9.71

7.76

-12.19

0.14

7.59

8.48

0.50

1.02

Outperform

20.75

6.35

-29.50

-8.02

0.03

-0.85

21.30

10.10

-28.39

-7.20

0.76

1.31

2.28%

22.26

12.59

-25.55

-3.17

6.02

4.71

0.92

0.82

Outperform

1.74%

25.40

5.42

-30.84

-7.76

2.27

1.10

1.03

0.10

N/A

25.43

7.95

-31.35

-7.98

2.31

1.16

24.28

8.55

-32.01

-7.96

2.10

1.47

28.03

13.74

-31.46

-3.20

9.85

13.86

1.10

1.58

Outperform

25.43

7.95

-31.35

-7.98

2.31

1.16

30.36

17.58

-31.87

-8.91

3.36

4.89

44.78

41.37

-25.04

6.20

18.60

12.36

1.10

0.60

Outperform

1.02

1.02

-46.90

-7.88

6.25

8.14

34.73

36.01

-28.07

2.95

14.72

8.70

25.68

-9.23

-40.16

-16.20

-0.23

7.42

0.86

0.83

Outperform

31.46 29.88

-13.13 -8.63

-45.35 -43.13

-19.73 -19.10

-3.28 -3.70

5.53 4.89

1.10%

Cat: Foreign Small / Mid Equity Emerging Markets

2.49%

MSCI EM ND Cat: Diversified Emerging Markets AIM Real Estate Instl

Specialty - Real Estate

Dow Jones Wilshire REIT Index U.S. Cat: Specialty - Real Estate * Secondary index is represented through May 16, 2003.

- 3 Yr Beta is run against the Morningstar Best Fit Index

23

Perform

3.50

MSCI EAFE ND DFA Emerging Markets Value I

1.31

-1.08

Cat: Foreign Large Equity Foreign Small / Mid Equity

0.92

-4.62

MSCI EAFE ND BlackRock International Opportunities A

0.02

-8.12

Cat: World Stock Foreign Large Equity

6.80

-0.44

-23.64

MSCI WORLD American Funds EuroPacific Growth R4

0.25

-7.93

-30.56

Cat: Small Cap Growth Global

-8.26

-30.33

1.16

Russell 2000 Growth American Funds New Perspective R4

-32.43

16.61


12.34

Cat: Small Cap Blend Small Growth

7.84

20.67

Expense Ratio

17.31

MSCI US Small Cap 1750 Index/Russell 2000 Idx* Royce Value Plus Instl

15.89

3 Year Beta

17.50

Cat: Small Cap Value Small Blend

1 Year

0.63%

Russell 2000 Value Index Vanguard Small Cap Index

Annualized Return 3 Year 5 Year 10 Year

YTD

0.80%

Fund Performance Summary (continued) RETURNS AS OF 06/30/09 Annualized Return Fund Name

Asset Class

Portfolio Xpress (-30 Years)

Lifecycle Funds/Models

3 Month

YTD

1 Year

3 Year

5 Year

10 Year

Expense Ratio

6.55

4.55

-4.37

3.12

4.58

N/A

0.58

11.53

8.11

-8.18

0.28

2.67

N/A

0.55

Cat: Retirement Income

10.31

6.27

-9.62

-1.01

1.28

2.29

1.16

Portfolio Xpress (0 Years)

9.90

5.24

-11.63

0.38

3.85

N/A

0.62

13.03

8.45

-10.99

-0.63

2.59

N/A

0.58

Cat: Target Date 2000-2010

11.72

6.68

-13.09

-2.08

0.83

2.13

1.18


9.90

5.24

-11.63

0.38

3.85

N/A

0.62

14.87

9.55

-14.22

-1.99

2.07

N/A

0.61


11.72

6.68

-13.09

-2.08

0.83

2.13

1.18


11.08

5.55

-14.14

-0.50

3.72

N/A

0.66

16.50

10.60

-16.91

-3.03

1.64

N/A

0.65


13.10

6.18

-18.24

-3.90

0.21

0.71

1.21


12.24

5.65

-16.34

-1.45

3.40

N/A

0.66

18.02

11.43

-19.38

-4.15

1.17

N/A

0.68


13.85

6.52

-18.84

-4.22

0.40

0.55

1.26


13.33

5.82

-18.86

-2.52

3.08

N/A

0.67

19.33

11.96

-21.37

-5.03

0.80

N/A

0.70


16.53

7.00

-23.05

-5.94

-0.30

NA

1.18


14.80

6.20

-21.28

-3.59

2.76

N/A

0.69

20.10

12.46

-22.96

-5.72

0.60

N/A

0.72


16.98

7.19

-24.18

-6.52

-0.66

-0.06

1.27


15.82

6.26

-23.52

-4.56

2.43

N/A

0.69

20.60

12.71

-23.90

-6.21

0.28

N/A

0.73


18.04

6.89

-25.30

-6.95

-0.78

NA

1.19

Portfolio Xpress (30+ Years)

16.28

6.17

-24.97

-5.15

2.29

N/A

0.72

20.58

12.64

-23.91

-6.21

0.29

N/A

0.73


18.64

7.48

-26.01

-7.40

-0.91

-0.89

1.28


16.28

6.17

-24.97

-5.15

2.29

N/A

0.72

20.58

12.74

-23.86

-6.17

N/A

N/A

0.73


18.77

7.10

-26.44

-7.41

-0.52

NA

1.22


16.28

6.17

-24.97

-5.15

2.29

N/A

0.72

20.55

12.58

-23.92

N/A

N/A

N/A

0.73

Cat: Target Date 2050+

19.10

7.77

-26.53

-7.56

-0.52

NA

1.27


16.28

6.17

-24.97

-5.15

2.29

N/A

0.72

20.63 16.62

12.56 -2.49

-24.04 -26.94

N/A -10.39

N/A -1.80

N/A -0.93

0.73 1.27

T. Rowe Price Retirement Income

T. Rowe Price Retirement 2005










T. Rowe Price Retirement 2055 Cat: Target Date 2050+

24

(%) of Plan 1.78%

1.84%

2.92%

4.49%

2.05%

1.49%

1.24%

1.31%

0.52%

0.44%

0.04%

0.29%

T. Rowe Price Retirement Funds - Qualitative Analysis T. Rowe Price Retirement Funds Provide Asset Allocation/Target Date Services Since Method of Investment Investment Strategy # of Underlying Funds # of Underlying Funds closed to new investments # of Funds Avaliable Holdings Subadvised or Cloned Glide Path Tactical Strategies Rebalance Trigger Glide Path Extension Net Assets Alternative Asset Classes

2002 Fund of Funds Active 17 0 12 NO Static Yes 5% 30 years $23 billion Emerging Markets/ World Bond / Emerging Markets Bond

T. Rowe Price Retirement Funds Asset Allocation 100% 90% 80% 70% 60% 50% 40% 30% 20% 10%

International Equity

25

Domestic Equity

Fixed Income

In co m e

20 05

20 10

20 15

20 20

20 25

20 30

20 35

20 40

20 45

20 50

20 55

0%

Portfolio XPress Allocation (Underlying Holdings) Foreign Equity

Domestic Equity 100%

100%

90%

90%

80%

80%

70%

70%

60%

60%

50%

50%

40%

40%

30%

30%

20%

20%

10%

10%

0%

0% 40

35

30

25

20

15

10

5

0

Income

T. Row e Price

100% 40

35

90%

Years Until Retirem ent Portfolio Xpress

Domestic Equity

Wells Fargo

MSTAR Category

Fixed Income

Portfolio 80%Xpress

30

25

20

15

10

5

0

T. Row e Price

Wells Fargo

MSTAR Category

70%

100% 90%

60%

80% 70%

50%

60% 50%

40%

40% 30%

30% 20%

Portfolio Xpress

10%

20%

0% 40

35

30

25

20

15

10

5

0

10%

Years Until Retirem ent

26

Portfolio Xpress

T. Row e Price

Wells Fargo

MSTAR Category

T. Row e Price Wells Fargo (Conservative Target Date)

Income

0%

Income

Years Until Retirem ent

MSTAR Category

Quantitative Analysis Summary

EVALUATION METHODOLOGY SCORE

Fund Name

Fund Category

Fund Wgt*

2Q09

1Q09

4Q08

3Q08

3 Year Average Fund Score

Vanguard Inflation Protected Securities

Inflation Protected

0.00%

21.87

20.00

22.00

14.96

18.30

Intermediate Govt

5.40%

28.24

23.68

21.46

23.17

21.46

Intermediate Bond

6.04%

13.01

11.90

12.41

16.24

12.41

High Yield Bond

1.58%

21.31

21.94

22.13

17.73

22.13

Large Value

8.61%

22.38

20.10

18.59

16.33

18.59

Large Blend

2.29%

26.04

30.11

31.09

23.07

31.09

0.58%

23.30

23.70

24.74

24.90

24.74

4.68%

25.57

22.89

24.07

23.27

24.07

2.53%

18.85

17.35

16.69

15.01

16.69

1.12%

16.40

15.75

16.18

15.23

16.18

0.25%

21.30

21.32

23.97

19.17

23.97

Mid Cap Growth

1.50%

31.86

28.89

26.63

28.13

26.63

Small Cap Value

0.63%

20.84

19.43

19.80

19.54

19.80

0.36%

20.93

19.27

20.25

17.58

20.25

Small Cap Growth

1.75%

17.44

19.24

19.31

14.63

19.31

World Stock

0.71%

23.78

22.48

25.23

23.41

25.23

0.72%

18.35

17.91

17.51

17.53

17.51

Foreign Large Equity

2.28%

16.44

15.70

17.89

16.84

17.89

Foreign Sm/Mid Equity

1.10%

13.86

15.63

15.50

16.30

15.50

Emerging Markets

2.49%

10.96

11.29

11.54

9.79

11.54

Specialty-Real Estate

0.80%

18.27

13.97

15.34

14.61

15.34

20.81

19.93

Barclays U.S. TIPS Vanguard Intermediate Term Treasury Barclays Int Govt Bond Barclays Aggregate Bond MainStay High Yield Bond I

0%

ML US High Yield Master Eaton Vance Large Cap Value A Russell 1000 Value Davis NY Venture Y TIAA-CREF Growth and Income Instl

25%

Outperform

PIMCO Total Return Admin

4.44% Top Possible Score

Fidelity Contrafund

Large Growth


Perform

S&P 500 Index

Russell 1000 Growth Perkins Mid Cap Value Inv

Mid Cap Value

TIAA-CREF Mid Cap Value Instl

50%

Munder Mid-Cap Core Growth A

Underperform

Russell Mid Cap Value Russell Mid Cap Growth Allianz NFJ Small Cap Value Instl Lord Abbett Small Cap Value A Russell 2000 Value Royce Value Plus Instl Russell 2000 Growth American Funds New Perspective R4 Mutual Discovery Z MSCI World American Funds EuroPacific Growth R4 MSCI EAFE BlackRock International Opportunities A MSCI EAFE DFA Emerging Markets Value I MSCI EAFE AIM Real Estate Instl DJ Wilshire REIT Index

PLAN WEIGHTED SCORE:

27

*Fund w eightings are remeasured by assigning a proportionate w eighting to each fund included in the Evaluation Methodology Score.

19.23

100%

95.56% Lowest Possible Score

Vanguard Inflation Prot Securities 6/30/2009 24.40% NA 22.00% 26.00%

0% 8.00% 14.00%

Ratio Statistics 25.60% 10 Year 5 Year 3 year

NA 16.00% 32.00%

10 Year 5 Year 3 year

NA 27.00% 35.00%

Information Ratio

31.80%

50% 18.00% 35.00%

Style Consistency Style Consistency to Benchmark - Lehman US TIPS Index R2 Avg Credit Quality

Fund Expense 0.20

20.00% 20.00% 20.00%

100% 20.00%

Total Average Ranking

Total Average Ranking STATUS

28

Underperform

Up Capture Ratio - 10 years Down Capture Ratio - 10 years

Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Ranking vs. Peers - Inflation Protected Bond Inflation Protected Bond Universe = 147 Funds Performance Ranking Total Return 10 Year 5 Year 3 year Rolling 12-month - 10 years Rolling 36-Month - 10 years

21.87% OUTPERFORM


Vanguard Intermediate US Treasury 6/30/2009 1.80% 1.00% 2.00% 2.00%

0% 5.00% 6.00%


25.00% 30.00% 44.00%


63.00% 66.00% 70.00%

Information Ratio

67.40%

50% 1.00% 97.00%

Style Consistency Style Consistency to Benchmark - Lehman US Intermediate Govt Index R2 Avg Credit Quality

Fund Expense 0.25

20.00% 20.00% 20.00%

100% 20.00%



29

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Ranking vs. Peers - Intermediate Govt Bond Intermediate Govt Bond Universe = 419 Funds Performance Ranking Total Return 10 Year 5 Year 3 year Rolling 12-month - 10 years Rolling 36-Month - 10 years

28.24% PERFORM


PIMCO Total Return Admin 6/30/2009 1.20% 2.00% 1.00% 1.00%

0% 2.00% 2.00%


2.00% 4.00% 4.00%


6.00% 12.00% 17.00%

Information Ratio

13.30%

50% 7.00% 28.00%

Style Consistency Style Consistency to Benchmark - Lehman US Aggregate Bond Index R2 Avg Credit Quality

Fund Expense 0.70

40.00% 60.00% 20.00%

100% 20.00%



30

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Ranking vs. Peers - Intermediate Bond Intermediate Bond Universe = 1222 Funds Performance Ranking Total Return 10 Year 5 Year 3 year Rolling 12-month - 10 years Rolling 36-Month - 10 years

13.01% OUTPERFORM


MainStay High Yield Bond I Ranking vs. Peers - High Yield Bond High Yield Bond Universe = 583 Funds

6/30/2009 Performance Ranking 19.30% 10 Year 5 Year 3 year

6.00% 12.00% 29.00%

Rolling 12-month - 10 years Rolling 36-Month - 10 years

0% 7.00% 6.00%


19.00% 23.00% 37.00%


21.00% 22.00% 33.00%

Information Ratio

27.30%

50% 23.00% 30.00%

Style Consistency Style Consistency to Benchmark - Merrill Lynch High Yield US Master R2 Avg Credit Quality

Fund Expense 0.87

30.00% 40.00% 20.00%

100% 20.00%



31

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

21.31% OUTPERFORM


Eaton Vance Large Cap Value A Ranking vs. Peers - Large Cap Value Large Cap Value Universe = 1422 Funds


16.00% 10.00% 25.00%


0% 5.00% 7.00%


29.00% 23.00% 36.00%


24.00% 23.00% 34.00%

Information Ratio

28.70%

50% 38.00% 20.00%

Style Consistency Style Consistency to Benchmark - Russell 1000 Value R2 Return Style Holding Style Fund Expense 1.00

33.33% 40.00% 40.00% 20.00%

100% 20.00%



32

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

22.38% OUTPERFORM


Davis NY Venture Y Ranking vs. Peers - Large Cap Blend Large Cap Blend Universe = 1855 Funds


15.00% 29.00% 62.00%


0% 6.00% 8.00%


24.00% 33.00% 40.00%


25.00% 37.00% 45.00%

Information Ratio

38.60%

50% 26.00% 25.00%

Style Consistency Style Consistency to Benchmark - S&P 500 R2 Return Style Holding Style Fund Expense 0.59

33.33% 40.00% 40.00% 20.00%

100% 20.00%



33

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

26.04% PERFORM


TIAA-CREF Growth and Income Instl Ranking vs. Peers - Large Cap Blend Large Cap Blend Universe = 1855 Funds

6/30/2009 Performance Ranking 2.80% 10 Year 5 Year 3 Year

N/A 4.00% 2.00%


0% 28.00% 32.00%

Ratio Statistics 14.80% 10 Year 5 Year 3 Year

N/A 19.00% 12.00%

10 Year 5 Year 3 Year

N/A 19.00% 13.00%

Information Ratio

15.40%

50% 35.00% 35.00%

Style Consistency Style Consistency to Benchmark - S&P 500 R2 Return Style Holding Style Fund Expense 0.33

26.67% 20.00% 20.00% 40.00%

100% 20.00%



34

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

23.30% OUTPERFORM


Fidelity Contrafund 6/30/2009 14.70% 5.00% 4.00% 25.00%

0% 1.00% 0.00%


13.00% 18.00% 48.00%


7.00% 20.00% 42.00%

Information Ratio

28.40%

50% 93.00% 1.00%

Style Consistency Style Consistency to Benchmark - Russell 1000 Growth R2 Return Style Holding Style Fund Expense 0.94

40.00% 40.00% 60.00% 20.00%

100% 20.00%



35

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Ranking vs. Peers - Large Cap Growth Large Cap Growth Universe = 2006 Funds Performance Ranking Total Return 10 Year 5 Year 3 year Rolling 12-month - 10 years Rolling 36-Month - 10 years

25.57% PERFORM


Vanguard PRIMECAP 6/30/2009 9.40% 3.00% 6.00% 14.00%

0% 1.00% 2.00%


7.00% 21.00% 31.00%


8.00% 22.00% 28.00%

Information Ratio

22.20%

50% 23.00% 17.00%


53.33% 60.00% 80.00% 20.00%

100% 20.00%



36

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Ranking vs. Peers - Large Cap Growth Large Cap Growth Universe = 2006 Funds Performance Ranking Total Return 10 Year 5 Year 3 year Rolling 12-month - 10 years Rolling 36-Month - 10 years

19.01% OUTPERFORM


Perkins Mid Cap Value Inv Ranking vs. Peers - Mid Cap Value Mid Cap Value Universe = 379 Funds


4.00% 4.00% 4.00%


0% 7.00% 13.00%


6.00% 12.00% 9.00%


5.00% 12.00% 10.00%

Information Ratio

9.60%

50% 33.00% 5.00%

Style Consistency Style Consistency to Benchmark - Russell Mid Cap Value R2 Return Style Holding Style Fund Expense 1.06

46.67% 60.00% 20.00% 60.00%

100% 20.00%



37

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

16.40% OUTPERFORM


TIAA-CREF Mid Cap Value Instl Ranking vs. Peers - Mid Cap Value Mid Cap Value Universe = 379 Funds


NA 11.00% 26.00%


0% 2.00% 3.00%


NA 18.00% 28.00%


NA 19.00% 29.00%

Information Ratio

25.00%

50% 19.00% 52.00%

Style Consistency Style Consistency to Benchmark - Russell Mid Cap Value R2 Return Style Holding Style Fund Expense 0.51

26.67% 20.00% 40.00% 20.00%

100% 20.00%



38

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

21.30% OUTPERFORM


Munder Mid Cap Core Growth A Ranking vs. Peers - Mid Cap Growth Mid Cap Growth Universe = 1002 Funds


7.00% 36.00% 55.00%


0% 2.00% 4.00%


7.00% 44.00% 57.00%


6.00% 44.00% 57.00%

Information Ratio

42.90%

50% 68.00% 7.00%

Style Consistency Style Consistency to Benchmark - Russell Mid Cap Growth R2 Return Style Holding Style Fund Expense 1.31

40.00% 60.00% 40.00% 20.00%

100% 40.00%



39

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

31.86% PERFORM


Allianz NFJ Small Cap Value Instl Ranking vs. Peers - Small Cap Value Small Cap Value Universe = 381 Funds


7.00% 2.00% 7.00%


0% 2.00% 2.00%


12.00% 11.00% 16.00%


11.00% 10.00% 13.00%

Information Ratio

11.70%

50% 82.00% 4.00%


46.67% 60.00% 60.00% 20.00%

100% 20.00%



40

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

20.84% OUTPERFORM


Lord Abbett Small Cap Value A Ranking vs. Peers - Small Cap Value Small Cap Value Universe = 381 Funds


1.00% 1.00% 13.00%


0%

5.00% 7.00% Ratio Statistics 13.10% 10 Year 5 Year 3 Year

12.00% 9.00% 16.00%


13.00% 10.00% 16.00%

Information Ratio

13.60% 50%

15.00% 21.00%


66.67% 40.00% 80.00% 80.00% 100%

40.00%



41

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

20.93% OUTPERFORM


Royce Value Plus Instl Ranking vs. Peers - Small Cap Growth Small Cap Growth Universe = 924 Funds


NA 7.00% 33.00%


0% 1.00% 1.00%


NA 17.00% 29.00%


NA 20.00% 33.00%

Information Ratio

27.80%

50% 13.00% 14.00%


33.33% 40.00% 40.00% 20.00%

100% 20.00%



42

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

17.44% OUTPERFORM


American Funds New Perspective R4 Ranking vs. Peers - World Stock World Stock Universe = 538 Funds


20.00% 21.00% 17.00%


0% 16.00% 22.00%


24.00% 28.00% 23.00%


19.00% 23.00% 22.00%

Information Ratio

21.70%

50% 39.00% 28.00%

Style Consistency Style Consistency to Benchmark - MSCI The World Index R2 Return Style Holding Style Fund Expense 0.75

NA NA NA NA

100% 20.00%



43

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

23.78% OUTPERFORM


Mutual Discovery Z Ranking vs. Peers - World Stock World Stock Universe = 538 Funds


2.00% 1.00% 4.00%


0% 6.00% 7.00%


0.00% 6.00% 14.00%


0.00% 6.00% 9.00%

Information Ratio

6.30%

50% 95.00% 1.00%

Style Consistency Style Consistency to Benchmark - MSCI The World Index R2 Return Style Holding Style Fund Expense 1.02

NA NA NA NA

100% 20.00%



44

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

18.35% OUTPERFORM


American Funds EuroPacific Growth R4 6/30/2009 7.70% 13.00% 7.00% 6.00%

0% 9.00% 12.00%


20.00% 19.00% 17.00%


17.00% 19.00% 15.00%

Information Ratio

16.60%

50% 33.00% 15.00%

Style Consistency Style Consistency to Benchmark - MSCI EAFE R2 Return Style Holding Style Fund Expense 0.82

NA NA NA NA

100% 20.00%



45

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Ranking vs. Peers - Foreign Large Equity Foreign Large Equity Universe = 1238 Funds Performance Ranking Total Return 10 Year 5 Year 3 year Rolling 12-month - 10 years Rolling 36-Month - 10 years

16.44% OUTPERFORM


BlackRock Intl Opportunities A 6/30/2009 3.30% 0.00% 1.00% 6.00%

0% 1.00% 1.00%


3.00% 15.00% 12.00%


5.00% 15.00% 14.00%

Information Ratio

12.50%

50% 0.00% 32.00%

Style Consistency Style Consistency to Benchmark - MSCI EAFE R2 Return Style Holding Style Fund Expense 1.58

NA NA NA NA

100% 50.00%



46

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Ranking vs. Peers - Foreign Large Equity Foreign Large Equity Universe = 1238 Funds Performance Ranking Total Return 10 Year 5 Year 3 year Rolling 12-month - 10 years Rolling 36-Month - 10 years

13.86% OUTPERFORM


DFA Emerging Markets Value I Ranking vs. Peers - Emerging Markets Emerging Markets Universe = 274 Funds


5.00% 0.00% 1.00%


0% 1.00% 1.00%


14.00% 9.00% 3.00%


13.00% 12.00% 8.00%

Information Ratio

10.20%

50% 26.00% 21.00%

Style Consistency Style Consistency to Benchmark - MSCI EMF R2 Return Style Holding Style Fund Expense 0.60

NA NA NA NA

100% 20.00%



47

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

10.96% OUTPERFORM


AIM Real Estate Instl Ranking vs. Peers - Real Estate Real Estate Universe = 263 Funds


2.00% 5.00% 9.00%


0% 1.00% 2.00%

Ratio Statistics 31.60% 10 Year 5 Year 3 Year

15.00% 17.00% 47.00%


13.00% 16.00% 32.00%

Information Ratio

23.40%

50% 50.00% 10.00%

Style Consistency Style Consistency to Benchmark - DJ Wilshire REIT R2 Return Style Holding Style Fund Expense 0.83

20.00% 20.00% NA NA

100% 20.00%



48

Underperform


Expense Ratio

25%


Perform

Sharpe Ratio

Outperform

Total Return

18.27% OUTPERFORM


TIAA-CREF Growth & Income

Fidelity Spartan US Equity Index

TIAA-CREF Mid Cap Value

Vanguard PRIMECAP

Royce Value Plus

Vanguard Mid Cap Index

Munder Mid Cap Core Growth

Davis NY Venture

Perkins Mid Cap Value

Lord Abbett Small Cap Value

Vanguard Small Cap Index

Allianz NFJ Small Cap Value

Eaton Vance Large Cap Value

--

17

0

0

0

11

18

0

0

0

10

3

34

27

Fidelity Contrafund

17

--

0

2

0

8

16

1

9

1

13

1

27

20

Allianz NFJ Small Cap Value

0

0

--

9

9

3

0

4

4

2

0

0

0

0


0

2

9

--

8

2

0

5

0

5

0

0

0

0

Lord Abbett Small Cap Value

0

0

9

8

--

3

0

3

3

5

0

3

0

0

Perkins Mid Cap Value

11

8

3

2

3

--

5

4

10

3

6

3

11

4

Davis NY Venture

18

16

0

0

0

5

--

1

3

0

12

1

21

13


0

1

4

5

3

4

1

--

10

4

0

4

2

0


0

9

4

0

3

10

3

10

--

3

3

8

9

2

Royce Value Plus

0

1

2

5

5

3

0

4

3

--

1

0

0

0

10

13

0

0

0

6

12

0

3

1

--

2

20

10

3

1

0

0

3

3

1

4

8

0

2

--

3

4


34

27

0

0

0

11

21

2

9

0

20

3

--

37

TIAA-CREF Growth & Income

27

20

0

0

0

4

13

0

2

0

10

4

37

--

Vanguard PRIMECAP TIAA-CREF Mid Cap Value

49

Fidelity Contrafund


Overlap Analysis

0 - 30% 31 – 50% 51% and above

Range of Investments Lower risk/lower potential reward

Higher risk/higher potential reward

FIXED INCOME CAPITAL INCOME PRESERVATION

DOMESTIC

FIXED - Vanguard PRIME MMkt - Federated Gov Reserve - Guaranteed Pooled

INFLATION PROTECTED - Vanguard Inflation Protected Sec INTERMEDIATE GOVERNMENT - Vanguard Int Term Treasury INTERMEDIATE CORPORATE - PIMCO Total Return - Vanguard Total Bond Market Index

SPECIALTY

HIGH YIELD BOND - MainStay High Yield Bond

BALANCED HYBRID

EQUITY VALUE

BLEND

LARGE VALUE - Eaton Vance Large Cap Value

LARGE BLEND - Davis NY Venture - TIAA-CREF Instl Grth and Income - Fidelity Spartan US Equity Idx

LARGE GROWTH - Fidelity Contrafund - Vanguard PRIMECAP

MID CAP VALUE - Perkins Mid Cap Value - TIAA-CREF Instl Mid Cap Value

MID CAP BLEND - Vanguard Mid Cap Index

MID CAP GROWTH - Munder Mid-Cap Core Growth

SMALL CAP VALUE - Allianz NFJ Small Cap Value Inst - Lord Abbett Small Cap Value

SMALL CAP BLEND - Vanguard Small Cap Index

SMALL CAP GROWTH - Royce Value Plus

REAL ESTATE - AIM Real Estate

FOREIGN

WORLD STOCK - American Funds New Perspective - Mutual Discovery FOREIGN LARGE CAP - American Funds EuroPacific Growth - Fidelity Spartan International Index FOREIGN SM/MID CAP - BlackRock International Opportunities EMERGING MARKETS - DFA Emerging Markets Value

50

GROWTH

Management Style (Returns-based) M anage r Style

M anage r Style

Ju ly 2 0 0 6 - Ju n e 2 0 0 9 2

Russell Style Indices Eaton Vance Large-Cap Value A Top Value

Davis NY Venture Y TIAA-CREF Growth & Income Instl

Top Growth

1

Top Value

Fidelity Spartan U.S. Equity Index Inv Fidelity Contrafund Mid Value

Vanguard PRIMECAP Adm Perkins Mid Cap Value Investor

Mid Growth

0

TIAA-CREF Mid-Cap Value Instl Vanguard Mid Capitalization Index Munder Mid-Cap Core Growth A

Russell Style Indices Eaton Vance Large-Cap Value A

Fidelity Spartan U.S. Equity Index Inv Fidelity Contrafund Mid Value

0

TIAA-CREF Mid-Cap Value Instl Vanguard Mid Capitalization Index Munder Mid-Cap Core Growth A

-1

Allianz NFJ Small Cap Value Instl

Lord Abbett Small-Cap Value A Sm Value

Sm Growth

-1

Lord Abbett Small-Cap Value A Sm Value


Sm Growth


Royce Value Plus Instl

-1

0

1

Royce Value Plus Instl -2 -2

2

-1

V a lu e - G ro wt h

0

M anage r Style July 1999 - June 2009

July 2006 - June 2009 2

2

S&P Int'l Equity Indices American Funds New Perspective R4 Mutual Discovery Z

S&P Int'l Equity Indices American Funds New Perspective R4 Mutual Discovery Z AsiaPac Lg

Europe Lg

American Funds EuroPacific Gr R4 Fidelity Spartan International Index Inv BlackRock International Opp A DFA Emerging Markets Value I

0

AsiaPac Lg

American Funds EuroPacific Gr R4 Fidelity Spartan International Index Inv

1

S m all - Large

Europe Lg 1

S m all - Large

2

USD, 36-month centered window; exp. weighted, rescaled

M anage r Style

BlackRock International Opp A DFA Emerging Markets Value I 0

-1

-1 Europe Sm

-2 -2

1

V a lu e - G ro wt h

USD, single data window; exp. weighted, rescaled

Foreign Equity

Vanguard PRIMECAP Adm Perkins Mid Cap Value Investor

Mid Growth


-2 -2

-1

Europe Sm

AsiaPac Sm

0

E u ro p e - A si a USD, single data window; exp. weighted, rescaled

51

Davis NY Venture Y TIAA-CREF Growth & Income Instl

Top Growth

1

Sm all - Large

Sm all - Large

Domestic Equity

Ju ly 1 9 9 9 - Ju n e 2 0 0 9 2

1

2

-2 -2

-1

AsiaPac Sm

0

1

E u ro p e - A si a USD, 36-month centered window; exp. weighted, rescaled

2

Portfolio Analysis Portfolio Composition

Other, 0.74% Cash, 15.99% Bonds, 25.99%

Non-US Stocks, 13.69%

US Stocks, 43.59%

Sector Weightings Software Hardware Media Telecommunication Healthcare Consumer Services Business Services Financial Services Consumer Goods Industrial Materials Energy Utilities 52

1st Qtr - 2009

2nd Qtr - 2009

S&P 500 Index

3.38% 7.42% 2.81% 3.95% 13.98% 7.95% 6.49% 16.75% 9.60% 12.70% 11.19% 3.91%

3.93% 8.08% 2.67% 3.77% 12.91% 8.44% 6.68% 16.72% 9.49% 12.82% 10.84% 3.69%

4.30% 10.50% 2.70% 3.50% 13.90% 8.30% 4.90% 13.70% 10.00% 11.40% 13.20% 3.70%

Portfolio Return vs. Custom Benchmark Performance as of June 30, 2009

Annualized Returns 3 Year 5 Year

10 Year

3 YR Std Dev

3 YR Mean

3 YR Sharpe

Expense Ratio

3 Month

1 Year

Pepperdine Diversified 403(b) Plan

12.09%

-14.91%

-1.40%

2.69%

3.54%

12.71

-1.40

-0.28

0.56

Custom Benchmark - Index (Passive)

12.18%

-15.39%

-3.03%

1.21%

1.62%

N/A

N/A

N/A

N/A

Custom Benchmark - Category (Active)

12.29%

-15.89%

-3.10%

1.13%

1.85%

12.87

-3.10

-0.41

0.68*

*Custom expense ratio represents the weighted expense (based upon current allocation) of Institutional and Retirement share classes in each asset category.

Annualized Returns

Benchmark Weightings

4%

2%

0%

-2%

-4% 3 Year

5 Year Pepperdine Diversified 403(b) Plan Custom Benchmark - Index (Passive) Custom Benchmark - Category (Active)

53

Fund Name

Category (Active)

Index (Passive)

Vanguard Prime Money Market Instl

Money Market

3 Month T-Bill

Weight 12.37%

Federated Gov. Cash Reserves

Money Market

3 Month T-Bill

0.66%

Guaranteed Pooled Fund

Stable Value

Cat: Stable Value

8.22%

Vanguard Int Term Treasury

Intermediate Govt Bond

Barclays Int Government Bond

5.40%


Intermediate Bond

Barclays Aggregate Bond

6.04%

MainStay HY Bond I

High Yield Bond

ML US High Yield Master

1.58%

Eaton Vance Large Cap Value A

Large Cap Value

Russell 1000 Value

8.61%

Davis NY Venture A

Large Cap Blend

S&P 500 Index

2.29%

TIAA-CREF G&I Instl

Large Cap Blend

S&P 500 Index

0.58%


Large Cap Blend

S&P 500 Index

9.98%

Fidelity Contrafund

Large Cap Growth

Russell 1000 Growth

4.68%

Vanguard PRIMECAP

Large Cap Growth

Russell 1000 Growth

2.53%


Mid Cap Value

Russell Mid Cap Value

1.12%

TiAA-CREF Mid Cap Value Instl

Mid Cap Value

Russell Mid Cap Value

0.25%


Mid Cap Blend

MSCI US Prm MC 450 Idx/SP 400MC Idx

1.35%

Munder Mid Cap Core Growth A

Mid Cap Growth

Russell Mid Cap Growth

1.50%

Allianz NFJ Small Cap Val Instl

Small Cap Value

Russell 2000 Value

0.63%


Small Cap Value

Russell 2000 Value

0.36%


Small Cap Blend

MSCI US SC 1750/Russell 2000 Index

1.81%


Small Cap Growth

Russell 2000 Growth

1.75%

American Funds New Perspective R4 World Stock

MSCI World

0.71%

Mutual Discovery Z

World Stock

MSCI World

0.72%

American Funds EuroPac Grth R4


MSCI EAFE

2.28%

Fidelity Spartan International Idx


MSCI EAFE

1.74%

BlackRock International Opp A

Foreign Sm/Mid Equity

MSCI EAFE

1.10%

DFA Emerging Markets Value I

Emerging Markets

MSCI Emerging Markets

2.49%

AIM Real Estate Instl

Real Estate

DJ Wilshire REIT Index

T. Rowe Price Retirement Funds

Target Dates

Cat: Target Dates

0.80% 18.41%

Section 3

Diversified Plan - Asset Allocation June 30, 2009

Asset Allocation by Fund (1 of 2) Contributions

Fund

55

Assets

Dollar

Percent

Dollar


# of Balances

Percent

Vanguard Money Market Instl

279

6.42%

$

300,281

12.37%

$

11,192,143

N/A


613

3.01%

$

140,910

9.98%

$

9,031,993

N/A


487

3.07%

$

143,782

8.61%

$

7,796,962

Outperform


284

18.23%

$

852,669

8.22%

$

7,437,408

N/A


423

4.83%

$

226,111

6.04%

$

5,471,586

Outperform

Vanguard Intermediate Term Treasury

368

3.93%

$

183,978

5.40%

$

4,885,850

Perform

Fidelity Contrafund

467

2.27%

$

106,196

4.68%

$

4,238,672

Perform


195

6.14%

$

287,071

4.49%

$

4,067,344

N/A


106

4.34%

$

203,215

2.92%

$

2,646,475

N/A


318

2.30%

$

107,472

2.53%

$

2,286,364

Outperform


327

1.47%

$

68,861

2.49%

$

2,255,374

Outperform

Davis New Venture Y

322

1.13%

$

52,761

2.29%

$

2,074,397

Perform

American Funds EuroPacific R4

364

1.15%

$

53,785

2.28%

$

2,063,792

Outperform


147

4.70%

$

219,723

2.05%

$

1,856,593

N/A


47

1.88%

$

88,062

1.84%

$

1,664,223

N/A


322

1.15%

$

53,868

1.81%

$

1,641,903

N/A


100

0.76%

$

35,532

1.78%

$

1,614,071

N/A


293

0.58%

$

27,045

1.75%

$

1,582,124

Outperform


354

1.00%

$

46,843

1.74%

$

1,575,048

N/A

MainStay High Yield Bond I

265

1.07%

$

50,238

1.58%

$

1,432,801

Outperform


272

0.72%

$

33,587

1.50%

$

1,361,246

Perform


131

4.75%

$

222,171

1.49%

$

1,344,702

N/A


320

1.34%

$

62,867

1.35%

$

1,224,286

N/A


144

3.33%

$

155,579

1.31%

$

1,184,257

N/A

Asset Allocation by Fund (2 of 2) Contributions

Fund

Percent


117

6.90%

$

322,644

1.24%

$

1,124,155

N/A


280

1.28%

$

59,973

1.12%

$

1,015,626

Outperform

BlackRock International Opportunity A

262

1.06%

$

49,600

1.10%

$

995,160

Outperform


263

0.73%

$

34,159

0.80%

$

726,041

Outperform

Mutual Discovery Z

224

0.99%

$

46,077

0.72%

$

652,874

Outperform

American Funds New Perspective R4

229

0.49%

$

22,889

0.71%

$

642,360

Outperform

7

0.46%

$

21,568

0.66%

$

593,704

N/A


235

0.98%

$

45,846

0.63%

$

567,212

Outperform

TIAA-CREF Growth & Income Instl

211

1.25%

$

58,288

0.58%

$

529,487

Outperform


116

2.97%

$

138,941

0.52%

$

472,030

N/A


123

2.00%

$

93,617

0.44%

$

399,600

N/A


218

0.48%

$

22,645

0.36%

$

329,279

Outperform


4

0.14%

$

6,592

0.29%

$

265,488

N/A


209

0.45%

$

21,040

0.25%

$

223,234

Outperform


25

0.22%

$

10,384

0.04%

$

40,018

N/A

1907

100.00%

$

4,677,347

100.00%

$

90,514,562

$

2,761,284

$

93,275,845

Sub Total Personal Choice Total

Dollar

6

$

1,913

$

Percent

4,677,347

Dollar


# of Balances

Federated Govt Cash

56

Assets

Asset Allocation by Category (%) 35.00%

30.00%

25.00%

20.00%

15.00%

10.00%

5.00%

0.00% Fixed

57

Bond

Large Cap

Mid Cap

Small Cap

International

Specialty

Large Cap Value

Large Cap Blend

Large Cap Growth

Mid Cap Value

Mid Cap Growth

Small Cap Value

Small Cap Blend

Small Cap Growth

Target Date

Mid Cap Blend

Asset Allocation Quarterly Comparison (1 of 2) Fund

58

Q1-2009

Q2-2009

Vanguard Money Market

$

12,781,836

$

11,192,143


$

8,222,253

$

9,031,993


$

7,134,420

$

7,796,962


$

6,329,013

$

7,437,408


$

4,639,420

$

5,471,586

Vanguard Intermediate Term Treasury

$

6,697,830

$

4,885,850

Fidelity Contrafund

$

3,716,456

$

4,238,672


$

4,069,911

$

4,067,344


$

2,230,945

$

2,646,475

Vanguard PRIMECAP

$

1,618,754

$

2,286,364


$

1,177,131

$

2,255,374

Davis New York Venture Y

$

1,828,855

$

2,074,397

American Funds EuroPacific R4

$

1,670,262

$

2,063,792


$

1,716,763

$

1,856,593


$

1,434,076

$

1,664,223


$

1,212,253

$

1,641,903


$

1,531,868

$

1,614,071


$

1,188,193

$

1,582,124


$

1,254,889

$

1,575,048

MainStay High Yield Bond I

$

670,548

$

1,432,801

Asset Allocation Quarterly Comparison (2 of 2) Fund

59

Q1-2009

Q2-2009


$

1,101,548

$

1,361,246


$

988,932

$

1,344,702


$

879,948

$

1,224,286


$

948,768

$

1,184,257


$

602,831

$

1,124,155


$

767,694

$

1,015,626

Black Rock International Opportunity A

$

517,112

$

995,160


$

493,693

$

726,041

Mutual Discovery Z

$

469,082

$

652,874

American Funds New Perspective R4

$

368,005

$

642,360

Federated Govt Cash

$

$

593,704


$

258,629

$

567,212


$

233,079

$

529,487


$

291,217

$

472,030


$

249,282

$

399,600


$

181,006

$

329,279


$

203,710

$

265,488


$

91,117

$

223,234


$

31,053

$

40,018

Total Core Line Up

$

79,802,378

$

90,514,562

Personal Choice

$

858,062

$

2,761,284

Total Plan Assets

$

80,660,440

$

93,275,845

-

Average Account Balance By Age

Average Account Balance $114,094

$120,000.00

$108,280

$100,000.00 $80,000.00

$69,578

$60,000.00

$48,908 $35,344

$40,000.00 $15,149

$20,000.00 $4,784 $0.00 Age 29 & Under

60

Age 30-39 Age 40-49 Age 50-59 Age 60-69

Age 70 & Over

Total

Asset Allocation By Age Age 29 & Under 2.34%

Age 30-39 1.85%

6.75%

Age 40-49 1.81%

7.25%

8.31%

9.51%

11.19%

12.24%

26.66%

33.47%

33.50%

29.01% 11.17%

28.14%

44.77%

14.84%

17.21%

Fixed Bond Equity

Age 50-59 1.61%

Foreign Lifecycle Brokerage

Age 60-69 0.33%

9.00%

Age 70 & Over 15.31%

8.32%

2.20%

24.67%

8.34% 30.13%

32.59%

16.24%

19.64%

15.50% 14.80%

61

28.84%

28.22%

19.71% 24.55%

Foreign/World Equity

Mid/Small Cap Equity

Large Cap Equity

Fixed/Bonds

PortfolioXPress Models

62

Models

30+ Years To Retirement

20 Years To Retirement

10 Years To Retirement

At Retirement

10 Years Into Retirement

Federated US Treasury Cash

0%

0%

0%

1%

1%

Vanguard PRIME Money Market

0%

0%

0%

1%

1%

Guaranteed Pool

0%

0%

3%

6%

9%


2%

9%

17%

23%

28%

Vanguard Int Term Treasury

1%

4%

8%

11%

13%

MainStay HY Corporate Bond I

2%

4%

5%

6%

8%

Eaton Vance Large Cap Value A

16%

13%

12%

9%

8%

Davis NY Venture Y

4%

4%

3%

3%

2%


4%

4%

3%

3%

2%


4%

5%

3%

4%

2%

Fidelity Contrafund

8%

6%

5%

4%

3%

Vanguard PRIMECAP

8%

6%

6%

4%

4%

Perkins Md Cap Value Inv

2%

1%

1%

1%

0%


2%

2%

2%

1%

1%


3%

3%

2%

1%

1%


4%

4%

3%

3%

2%


3%

3%

2%

2%

1%


2%

2%

1%

1%

1%


2%

2%

2%

1%

1%


4%

3%

2%

2%

1%

AIM Real Estate Inst

3%

3%

2%

1%

1%

Amer Funds EuroPac Growth R4

3%

3%

2%

1%

1%

Amer Funds new Perspective R4

3%

3%

2%

1%

1%

Fidelity Spartan Intl Index

4%

3%

3%

2%

2%

Mutual Discovery Z

4%

3%

3%

2%

2%

BlackRock International Opp A

6%

5%

4%

3%

2%

DFA Emerging Markets

6%

5%

4%

3%

2%

Section 4

Prudential Plan - Portfolio Summary June 30, 2009


Asset Class

(%) of Plan

Medley Money Market

Money Market

4.65%

3 Month

YTD

1 Year

3 Year

5 Year

10 Year

-0.03

-0.01

0.74

2.89

2.66

2.59

3 Month T-Bill

0.05

0.10

0.62

2.97

3.12

3.14

Cat: Money Market

0.04

0.14

0.90

3.04

2.85

2.83

0.94

1.92

3.95

4.01

4.04

4.70

0.65

1.37

3.27

4.00

3.99

4.58

0.78

2.47

5.48

4.98

3.67

4.88

Barclays Intermediate Government Bond

-1.44

-1.52

6.42

7.00

5.00

5.63

Cat: Intermediate Government Bond

0.16

1.65

5.66

5.70

4.23

5.00

6.83

7.96

2.48

4.34

3.87

4.76

Barclays Aggregate Bond

1.78

1.90

6.05

6.43

5.01

5.98

Cat: Intermediate Term Bond

5.72

5.89

1.64

3.62

3.19

4.82

1.31%

10.01

3.92

-12.81

-2.46

0.28

0.57%

10.85

2.85

-16.54

-3.90

-0.10

10.35

6.84

-9.99

-1.04

1.53

2.25

Prudential Guaranteed Interest

Stable Value

62.35%

Cat: Stable Value Medley Government Income

Medley Diversified Bond

Medley Conservative Balanced

Intermediate Government

Intermediate Bond

Conservative Allocation

Medley Flexible Managed

1.47%

3.66%

Cat: Conservative Allocation Medley Stock Index

Large Cap Blend

1.00

N/A

0.49

N/A

1.22

Underperform

1.20

Perform

0.75

1.33

Underperform

0.05

1.38

Underperform

1.13

N/A

15.64

2.70

-26.70

-9.06

-3.18

-3.15

15.93

3.16

-26.21

-8.22

-2.24

-2.22

Cat: Large Blend

16.79

4.92

-26.41

-8.34

-2.06

-1.50

8.21%

21.53

21.26

-26.92

-6.83

1.29

-0.08

1.00

Perform

13.73%

17.30

10.95

-25.61

-6.24

-0.54

-1.27

1.22

Perform

16.32

11.53

-24.50

-5.45

-1.83

-4.18

15.74

10.50

-27.13

-6.86

-1.81

-2.42

21.39

1.89

-34.19

-10.68

-1.25

-1.76

1.57

Underperform

MSCI WORLD

20.75

6.35

-29.50

-8.02

0.03

-0.85

Cat: World Stock

21.30

10.10

-28.39

-7.20

0.76

1.31

Large Cap Growth

Medley Equity

2.92%

Expense Evaluation Ratio Methodology

S&P 500 Index Medley Capital Growth Russell 1000 Growth Cat: Large Growth Medley Global

64

Annualized Return

Global


1.15%




Fund Category Intermediate Government

2Q09 57.70

1Q09 58.46

4Q08 59.00

3Q08 54.30

Intermediate Bond

3.66%

48.61

51.71

52.58

45.56


1.31%

58.63

59.51

58.04

47.64

0.57%

61.68

57.96

53.26

43.05

Barclays Intermediate Government Barclays Aggregate Bond Medley Conservative Balanced Medely Flexible Managed

25%

Cat: Conservative Allocation Medley Capital Growth

Large Cap Growth

Medley Equity Account

8.21%

29.94

31.87

36.68

36.12

13.73%

37.14

39.34

38.91

36.02

1.15%

70.24

72.41

65.29

59.89


40.24

42.67

43.76

40.04

50%

Global

Underperform

Russell 1000 Growth Medley Global MSCI World

*Fund w eightings are remeasured by assigning a proportionate w eighting to each fund included in the Evaluation Methodology Score.

100%

65


Perform


Outperform

Fund Name Medley Government Income

0%

Fund Wgt* 1.47%


Medley Government Income 6/30/2009 72.50% 61.00% 76.00% 75.00%

0%

60.00% 52.00% 25%

Ratio Statistics 10 Year 5 Year 3 Year

60.00% 63.00% 70.00%


63.00% 61.00% 66.00%

63.90%


Perform

65.90%

Information Ratio

50%

40.00% 65.00%

Style Consistency Style Consistency to Benchmark - Lehman US Intermediate Govt Index R2 Avg Credit Quality

40.00% 60.00% 20.00% 100%

Expense Ratio

Fund Expense 1.22

60.00%



66


Underperform

Sharpe Ratio

Outperform

Ranking vs. Peers - Intermediate Govt Bond Intermediate Govt Bond Universe = 419 Funds Performance Ranking Total Return 10 Year 5 Year 3 Year Rolling 12-month - 10 years Rolling 36-Month - 10 years

57.70% UNDERPERFORM


0% - 24.99% Outperform 25% - 49.99% Perform 50% - 100% Underperform

Medley Diversified Bond 6/30/2009 47.10% 54.00% 41.00% 48.00%

0% 39.00% 49.00%

Ratio Statistics

25%


50.00% 40.00% 47.00%


49.00% 52.00% 53.00%

51.90%


Perform

45.50%

Information Ratio

50%

41.00% 64.00%

Style Consistency Style Consistency to Benchmark - Lehman US Aggregate Bond Index R2 60.00% Avg Credit Quality 20.00%

40.00%

100%

Expense Ratio

Fund Expense 1.20

60.00%



67


Underperform

Sharpe Ratio

Outperform

Ranking vs. Peers - Intermediate Bond Intermediate Bond Universe = 1222 Funds Performance Ranking Total Return 10 Year 5 Year 3 Year Rolling 12-month - 10 years Rolling 36-Month - 10 years

48.61% PERFORM



Medley Conservative Balanced 6/30/2009 70.90% 80.00% 78.00% 63.00%

0% 51.00% 57.00%

Ratio Statistics

25%


65.00% 63.00% 71.00%


72.00% 71.00% 70.00%

70.70%


Perform

67.40%

Information Ratio

50%

22.00% 80.00% Style Consistency

Style Consistency to Benchmark -

NA R2 Return Style Holding Style

Expense Ratio

Fund Expense 1.33

NA NA NA

100%

50.00%



68


Underperform

Sharpe Ratio

Outperform

Ranking vs. Peers - Conservative Allocation Conservative Allocation Universe = 196 Funds Performance Ranking Total Return 10 Year 5 Year 3 Year Rolling 12-month - 10 years Rolling 36-Month - 10 years

58.63% UNDERPERFORM



Medley Flexible Managed 6/30/2009 88.90% 87.00% 85.00% 92.00%

0% 47.00% 43.00%

Ratio Statistics

25%


65.00% 62.00% 76.00%


79.00% 77.00% 90.00%

83.90%


Perform

69.60%

Information Ratio

50%

12.00% 99.00% Style Consistency

Style Consistency to Benchmark -

NA R2 Return Style Holding Style

Expense Ratio

Fund Expense 1.38

NA NA NA

100%

50.00%



69


Underperform

Sharpe Ratio

Outperform

Ranking vs. Peers - Conservative Allocation Conservative Allocation Universe = 196 Funds Performance Ranking Total Return 10 Year 5 Year 3 Year Rolling 12-month - 10 years Rolling 36-Month - 10 years

61.68% UNDERPERFORM



Medley Capital Growth 6/30/2009 30.90% 19.00% 7.00% 50.00%

0% 6.00% 4.00%

Ratio Statistics

25%


24.00% 20.00% 37.00%


23.00% 24.00% 45.00%

34.30%


Fund Expense 1.00

60.00% 80.00% 80.00% 20.00%

100%

20.00%



70

50%

74.00% 11.00%

Style Consistency Style Consistency to Benchmark - Russell 1000 Growth R2 Return Style Holding Style

STATUS

Perform

29.30%

Information Ratio

Expense Ratio


Underperform

Sharpe Ratio

Outperform

Ranking vs. Peers - Large Cap Growth Large Cap Growth Universe = 2006 Funds Performance Ranking Total Return 10 Year 5 Year 3 Year Rolling 12-month - 10 years Rolling 36-Month - 10 years

29.94% PERFORM



Medley Equity 6/30/2009 34.20% 34.00% 23.00% 41.00%

0% 9.00% 10.00%

Ratio Statistics

25%


42.00% 40.00% 53.00%


36.00% 37.00% 51.00%

43.80%


Fund Expense 1.22

53.33% 60.00% 80.00% 20.00%

100%

40.00%



71

50%

89.00% 8.00%


STATUS

Perform

46.90%

Information Ratio

Expense Ratio


Underperform

Sharpe Ratio

Outperform


37.14% PERFORM



Medley Global Ranking vs. Peers - World Stock World Stock Universe = 538 Funds


83.00% 73.00% 82.00%


0% 83.00% 81.00%

Ratio Statistics

25%


82.00% 77.00% 85.00%


81.00% 74.00% 84.00%

80.40%


Fund Expense 1.57

NA NA NA NA

100%

40.00%



72

50%

43.00% 73.00%

Style Consistency Style Consistency to Benchmark - MSCI The World Index R2 Return Style Holding Style

STATUS

Perform

82.00%

Information Ratio

Expense Ratio


Underperform

Sharpe Ratio

Outperform

Total Return

70.24% UNDERPERFORM






FOREIGN

DOMESTIC

MONEY MARKET - Medley Money Market

73

STABLE VALUE - Prudential GIA

INTERMEDIATE GOVERNMENT - Medley Govt Income INTERMEDIATE BOND - Medley Diversified Bond

BALANCED HYBRID CONSERVATIVE ALLOCATION - Medley Conservative Balanced - Medley Flexible Managed

EQUITY VALUE

BLEND LARGE BLEND - Medley Stock Index

WORLD STOCK - Medley Global

GROWTH LARGE GROWTH - Medley Capital Growth - Medley Equity


M anage r Style

July 2006 - June 2009

July 1999 - June 2009 2

Top Value

Russell Style Indices Medley Stock Index Medley Captial Growth Medley Equity Account

Top Growth

Mid Value

Mid Growth

0

-1

Top Growth

Mid Value

Mid Growth

Sm Value

Sm Growth

0

-1 Sm Value

-2 -2

Top Value

Sm Growth

-1

0

1

-2 -2

2

-1

V a l u e - G ro w th

0

1


M anage r Style

M anage r Style

July 2006 - June 2009

July 1999 - June 2009

2

2

S&P Int'l Equity Indices Medley Global Account Europe Lg

S&P Int'l Equity Indices Medley Global Account

AsiaPac Lg

0

-1

AsiaPac Lg

Europe Sm

AsiaPac Sm

0

-1 Europe Sm

-2 -2

Europe Lg 1

S m all - Large

1

S m all - Large

Foreign Equity

2



-1

AsiaPac Sm

0

E u ro p e - A si a

74

Russell Style Indices Medley Stock Index Medley Captial Growth Medley Equity Account

1

S m all - Large

1

S m all - Large

Domestic Equity

2


1

2

-2 -2

-1

0


1

2

Portfolio Return vs. Custom Benchmark Annualized Returns Performance as of March 31, 2009

3 YR

3 YR

3 YR

Expense

3 Month

1 Year

3 Year

5 Year

10 Year

Std Dev

Mean

Sharpe

Ratio

Pepperdine Prudential 403(b) Plan

5.75%

-4.61%

1.31%

3.04%

3.28%

5.55

1.31

-0.27

0.74


4.93%

1.42%

2.35%

1.03%

0.00%

N/A

N/A

N/A

N/A


4.91%

-5.22%

1.19%

2.48%

2.72%

5.38

1.19

-0.30

0.65*

*Custo m expense ratio represents the weighted expense (based upo n current allo catio n) o f Institutio nal and Retirement share classes in each asset catego ry.

Annualized Returns

4% 3% 3% 2% 2% 1% 1% 0% 3 Year

5 Year Pepperdine Prudential 403(b) Plan Custom Benchmark - Index (Passive) Custom Benchmark - Category (Active)

75

Benchmark Weightings Fund Name

Category (Active)

Index (Passive)

Weight

Medley Money Market

Money Market

3 Month T-Bill

Prudential GIA

Stable Value

Cat: Stable Value

62.35%

Medley Government Income

Intermediate Government Barclays Int Govt

1.47%


Intermediate Bond

Barclays Aggregate

3.66%

Medley Conservative Balanced Conservative Allocation

Cat: Conservative Alloc

1.31%



Cat: Conservative Alloc

0.57%

Medley Stock Index

Large Cap Blend

S&P 500 Index

2.92%

Medley Capital Growth

Large Cap Growth

Russell 1000 Growth

8.21%

Medley Equity Account

Large Cap Growth

Russell 1000 Growth

13.73%

Medley Global

World Stock

MSCI World

4.65%

1.15%

Section 5

Prudential Plan - Asset Allocation June 30, 2009

Asset Allocation by Fund Fund

Assets ($)



62.35%

$

2,257,093

N/A

Medley Equity

13.73%

$

496,886

Perform


8.21%

$

297,094

Perform

Medley Money Market

4.65%

$

168,289

N/A


3.66%

$

132,563

Perform

Medley Stock Index

2.92%

$

105,575

N/A


1.47%

$

53,077

Underperform


1.31%

$

47,363

Underperform

Medley Global

1.15%

$

41,513

Underperform


0.57%

$

20,556

Underperform

100.00%

$

3,620,009

Total

77

% of Assets

Asset Allocation by Category (%)

80.00% 70.00% 60.00% 50.00% 40.00% 67.00%

30.00% 20.00% 21.94%

10.00% 5.13%

0.00% Fixed

Bond

1.88%

2.92%

Conservative

Large Cap

Large Cap Blend

78

Large Cap Growth

1.15%

International

Asset Allocation Quarterly Comparison ($)

Fund

79

Q3-2008

Q4-2008

Q1-2009

Q2-2009


$

2,617,143

$

2,612,484

$

2,305,499

$

2,257,093

Medley Equity

$

592,981

$

450,757

$

423,589

$

496,886


$

415,168

$

312,751

$

251,576

$

297,094

Medley Money Market

$

238,029

$

246,522

$

176,798

$

168,289


$

182,963

$

127,377

$

124,084

$

132,563

Medley Stock Index

$

138,412

$

108,505

$

91,294

$

105,575


$

50,117

$

51,504

$

52,663

$

53,077


$

86,242

$

78,552

$

51,725

$

47,363

Medley Global

$

75,027

$

44,871

$

34,196

$

41,513


$

47,218

$

43,305

$

18,545

$

20,556

$

4,443,301

$

4,076,628

$

3,529,970

$

3,620,009

80 1.13% 1.26% 1.49% 1.47% 1.94% 1.93% 1.47% 1.31% 1.69% 1.10% 0.97% 1.15% 1.06% 1.06% 0.53% 0.57%


Medley Global


Medley Stock Index


3.12% 2.66% 2.59% 2.92%


0%

4.12% 3.12% 3.52% 3.66%

Medley Money Market

5.36% 6.05% 5.01% 4.65%

9.34% 7.67% 7.13% 8.21%

10%


20%

13.35% 11.06% 12.00% 13.73%

60%

Medley Equity


70%

58.90% 64.08% 65.31% 62.35%

Asset Allocation Quarterly Comparison (%) Q3-2008

Q4-2008

Q1-2009

Q2-2009

50%

40%

30%

Growth of Plan Assets

$6,000,000

$5,000,000

$4,000,000

$3,000,000

$2,000,000

$1,000,000

$Plan Assets

81

Mar-08

June-08

Sept-08

Dec-08

Mar-09

June-09

$4,810,807

$4,901,610

$4,443,301

$4,076,628

$3,529,970

$3,620,009

Section 6

TIAA-CREF Plan - Portfolio Summary June 30, 2009


Asset Class

(%) of Plan

CREF Money Market

Money Market

8.46%

3 Month T-Bill Cat: Money Market TIAA Traditional (GRA, RA)

Stable Value

TIAA Traditional (GSRA, SRA) Cat: Stable Value CREF Inflation Linked Bond

Inflation Protected Bond

6.25

0.50

N/A

4.90

4.55

3.82

5.68

0.50

N/A

2.44%

0.65 0.43

1.37 4.61

3.27 -1.87

4.00 5.21

3.99 4.45

4.58 6.78

0.50

Perform

0.66

6.21

-1.11

5.78

4.94

7.24

1.19

5.25

-3.14

4.12

4.22

5.87

1.94

2.42

3.33

4.88

4.03

5.45

0.50

Perform

1.78

1.90

6.05

6.43

5.01

5.98 0.53

Perform

0.59

Perform

0.49

N/A

0.58

Perform

0.65

Underperform

1.01

N/A

2.74%

21.81%

2.91%

2.38%

Cat: World Stock

83

N/A

1.48

MSCI WORLD


0.47

0.74

Cat: Large Growth

Wilshire REIT Index Cat: Specialty - Real Estate

3.14

7.43%

Russell 1000 Growth

Specialty - Real Estate

3.12

3.12

2.83

Cat: Large Blend

TIAA Real Estate

3.14

2.97

4.92

1.81%

Global

3.32

0.62

2.85

Russell 3000 Index

CREF Global Equities

1.19

0.10

5.30

Cat: Large Blend

Large Cap Growth

0.10

0.05

3.04

S&P 500 Index

CREF Growth

0.00

Expense Evaluation Ratio Methodology

5.65

Cat: Moderate Allocation

CREF Equity Index

10 Year

0.90

2.58%

Large Cap Blend

5 Year

2.21

40% Barclays Agg Bond / 60% S&P 500 Index CREF Stock

3 Year

0.14

Cat: Intermediate Term Bond Hybrid

1 Year

0.98

Barclays Aggregate Bond CREF Social Choice

YTD

0.04

Cat: Inflation Protected Bond Intermediate Bond

3 Month

46.83%

Barclays U.S. TIPS CREF Bond Market

Annualized Return

0.60%

5.72

5.89

1.64

3.62

3.19

4.82

12.36

5.21

-14.41

-2.78

0.71

1.42

10.18

3.06

-13.90

-2.20

0.90

1.33

13.18

6.50

-17.77

-4.15

0.19

1.27

19.56

6.90

-27.64

-7.87

-0.84

-1.04

15.93

3.16

-26.21

-8.22

-2.24

-2.22

16.79

4.92

-26.41

-8.34

-2.06

-1.50

16.69

4.00

-26.74

-8.69

-2.22

-1.78

16.82

4.20

-26.56

-8.35

-1.84

-1.46

16.79

4.92

-26.41

-8.34

-2.06

-1.50

15.54

10.95

-26.03

-5.29

-2.01

-5.01

16.32

11.53

-24.50

-5.45

-1.83

-4.18

15.74

10.50

-27.13

-6.86

-1.81

-2.42

20.91

7.39

-30.37

-8.13

-0.57

-1.08

20.75

6.35

-29.50

-8.02

0.03

-0.85

21.30

10.10

-28.39

-7.20

0.76

1.31

-9.96

-17.49

-29.84

-5.26

2.50

4.83

31.46 29.88

-13.13 -8.63

-45.35 -43.13

-19.73 -19.10

-3.28 -3.70

5.53 4.89




Fund Name CREF Inflation Linked Bond

Fund Category Inflation Protected Bond

Fund Wgt* 2.44%

2Q09 29.89

1Q09 28.64

4Q08 26.31

3Q08 25.70

Intermediate Bond

2.74%

26.82

23.60

23.22

24.67

Barclays U.S. Tips

25%

Barclays Aggregate Bond CREF Social Choice

Moderate Allocation

2.58%

40.81

43.69

43.08

41.25

Large Cap Blend

21.81%

27.76

30.95

31.09

28.47

Large Cap Growth

2.91%

49.83

50.19

53.36

52.59

Global

2.38%

61.06

61.40

60.44

57.21


32.92

34.47

34.91

33.07

40% Barclays Agg Bond/60% S&P 500 Index CREF Stock S&P 500 Index CREF Growth


Perform

CREF Bond Market

Outperform

0%

50%


Underperform

Russell 1000 Growth MSCI World

*Fund weightings are remeasured by assigning a proportionate weighting to each fund included in the Evaluation Methodology Score.

100%

84


CREF Inflation Linked Bond 6/30/2009 35.00% 35.00% 35.00% 35.00%

0% 27.00% 32.00%

Ratio Statistics

25%


7.00% 27.00% 38.00%


8.00% 33.00% 38.00%

30.50%


Perform

28.50%

Information Ratio

50%

17.00% 59.00%

Style Consistency Style Consistency to Benchmark - Lehman US TIPS Index R2 Avg Credit Quality

20.00% 20.00% 20.00%

100% Expense Ratio

Fund Expense 0.50

20.00%



85


Underperform

Sharpe Ratio

Outperform

Ranking vs. Peers - Inflation Protected Bond Inflation Protected Bond Universe = 147 Funds Performance Ranking Total Return 10 Year 5 Year 3 Year Rolling 12-month - 10 years Rolling 36-Month - 10 years

29.89% PERFORM



CREF Bond Market 6/30/2009 35.10% 24.00% 36.00% 39.00%

0% 13.00% 21.00%

Ratio Statistics

25%


19.00% 32.00% 33.00%


17.00% 35.00% 33.00%

30.40%


Perform

29.90%

Information Ratio

50%

26.00% 46.00%

Style Consistency Style Consistency to Benchmark - Barclays US Aggregate Bond Index R2 Avg Credit Quality

20.00% 20.00% 20.00%

100% Expense Ratio

Fund Expense 0.50

20.00%



86


Underperform

Sharpe Ratio

Outperform

Ranking vs. Peers - Intermediate Bond Intermediate Bond Universe = 1222 Funds Performance Ranking Total Return 10 Year 5 Year 3 Year Rolling 12-month - 10 years Rolling 36-Month - 10 years

26.82% PERFORM



CREF Social Choice 3/31/2009 36.50% 51.00% 36.00% 31.00%

0% 46.00% 45.00%

Ratio Statistics

25%


54.00% 49.00% 38.00%


49.00% 44.00% 35.00%

40.50%


Fund Expense 0.53

NA NA NA NA

100% 20.00%



87

50%

63.00% 31.00%

Style Consistency Style Consistency to Benchmark - Moderate Allocation Category R2 Return Style Holding Style

STATUS

Perform

44.50%

Information Ratio

Expense Ratio


Underperform

Sharpe Ratio

Outperform

Ranking vs. Peers - Moderate Allocation Moderate Allocation Universe = 707 Funds Performance Ranking Total Return 10 Year 5 Year 3 Year Rolling 12-month - 10 years Rolling 36-Month - 10 years

40.81% PERFORM



CREF Stock Ranking vs. Peers - Large Cap Blend Large Cap Blend Universe = 1855 Funds


33.00% 21.00% 38.00%


0% 16.00% 15.00%

Ratio Statistics

25%


40.00% 29.00% 33.00%


40.00% 32.00% 35.00%

35.10%


Fund Expense 0.59

26.67% 20.00% 40.00% 20.00%

100% 20.00%



88

50%

21.00% 51.00%

Style Consistency Style Consistency to Benchmark - S&P 500 R2 Return Style Holding Style

STATUS

Perform

33.20%

Information Ratio

Expense Ratio


Underperform

Sharpe Ratio

Outperform

Total Return

27.76% PERFORM



CREF Growth 6/30/2009 46.90% 86.00% 54.00% 27.00%

0% 71.00% 73.00%

Ratio Statistics

25%


72.00% 60.00% 37.00%


74.00% 59.00% 37.00%

51.00%


Fund Expense 0.58

26.67% 20.00% 40.00% 20.00%

100% 20.00%



89

50%

34.00% 75.00%


STATUS

Perform

50.90%

Information Ratio

Expense Ratio


Underperform

Sharpe Ratio

Outperform


49.83% PERFORM



CREF Global Equities Ranking vs. Peers - World Stock World Stock Universe = 538 Funds


74.00% 66.00% 60.00%


0% 75.00% 74.00%

Ratio Statistics

25%


82.00% 68.00% 63.00%


75.00% 67.00% 65.00%

67.60%


Fund Expense 0.65

NA NA NA NA

100% 20.00%



90

50%

67.00% 52.00%

Style Consistency Style Consistency to Benchmark - MSCI The World Index R2 Return Style Holding Style

STATUS

Perform

68.30%

Information Ratio

Expense Ratio


Underperform

Sharpe Ratio

Outperform

Total Return

61.06% UNDERPERFORM






FOREIGN

SPECIALTY

DOMESTIC

MONEY MARKET - CREF Money Market - TIAA Traditional

91

INFLATION PROTECTED BOND - CREF Inflation Linked Bond

BALANCED HYBRID MODERATE ALLOCATION - CREF Social Choice

EQUITY VALUE

BLEND LARGE BLEND - CREF Stock - CREF Equity Index

INTERMEDIATE BOND - CREF Bond Market

REAL ESTATE - TIAA Real Estate

WORLD STOCK - CREF Global Equities

GROWTH LARGE GROWTH - CREF Growth


M anage r Style

July 2006 - June 2009

July 1999 - June 2009

2

Top Growth

Mid Value

Mid Growth

0

-1 Sm Value

-2 -2

-1

1

Top Growth

Mid Value

Mid Growth

Sm Value

Sm Growth

0

-1

Sm Growth

0

Top Value

-2 -2

2

-1


0

1


M anage r Style

M anage r Style

July 2006 - June 2009

July 1999 - June 2009 2

S&P Int'l Equity Indices CREF Global Equities Europe Lg

S&P Int'l Equity Indices CREF Global Equities

AsiaPac Lg

1

Europe Lg

AsiaPac Lg

Europe Sm

AsiaPac Sm

1

S m all - Large

S m all - Large

Foreign Equity

2

0

-1

0

-1

Europe Sm

-1

AsiaPac Sm

0

E u ro p e - A si a

92

2



-2 -2

Russell Style Indices CREF Stock CREF Equity Index CREF Growth

1

S m all - Large

1

S m all - Large

Domestic Equity

Top Value

2

Russell Style Indices CREF Stock CREF Equity Index CREF Growth


1

2

-2 -2

-1

0


1

2

Portfolio Return vs. Custom Benchmark Performance as of June 30, 2009

Annualized Returns 3 Year 5 Year

10 Year

3 YR Std Dev

3 YR Mean

3 YR Sharpe

Expense Ratio

3 Month

1 Year

Pepperdine TIAA-CREF 403(b) Plan

6.18%

-6.09%

1.23%

3.11%

3.45%

6.34

1.23

-0.24

0.52


5.62%

-6.28%

0.27%

2.12%

2.51%

N/A

N/A

N/A

N/A


5.86%

-6.78%

0.33%

2.26%

2.67%

6.30

0.33

-0.39

0.66*

*Custom expense ratio represents the weighted expense (based upon current allocation) of Institutional and Retirement share classes in each asset category.

Annualized Returns 4%

3%

2%

1%

0% 3 Year

5 Year

Pepperdine TIAA-CREF 403(b) Plan Custom Benchmark - Index (Passive) Custom Benchmark - Category (Active)

93

Benchmark Weightings Fund Name

Category (Active)

Index (Passive)

CREF Money Market

Money Market

3 Month T-Bill

Weight

TIAA Traditional (GRA, RA)

Stable Value

Cat: Stable Value

46.83%

TIAA Traditional (GSRA, SRA) Stable Value

Cat: Stable Value

7.43%

8.46%

CREF Inflation Linked Bond

Inflation Protected Bond Barclays U.S. TIPS

2.44%

CREF Bond Market

Intermediate Term Bond Barclays Aggregate Bond

2.74%

CREF Social Choice

Moderate Allocation

40%Barclays Agg/60%S&P500

CREF Stock

Large Cap Blend

S&P 500 Index

CREF Equity Index

Large Cap Blend

Russell 3000 Index

1.81%

CREF Growth

Large Cap Growth

Russell 1000 Growth

2.91%


Global Stock

MSCI World

2.38%

TIAA Real Estate

Specialty - Real Estate Wilshire REIT

2.58% 21.81%

0.60%

Section 7

TIAA-CREF Plan - Asset Allocation June 30, 2009

Asset Allocation by Fund Fund

Assets ($)


TIAA Traditional (GRA, RA)

46.83%

$

65,269,314

N/A

CREF Stock

21.81%

$

30,393,404

Perform

CREF Money Market

8.46%

$

11,793,806

N/A

TIAA Traditional (GSRA, SRA)

7.43%

$

10,354,662

N/A

CREF Growth

2.91%

$

4,049,729

Perform

CREF Bond Market

2.74%

$

3,820,011

Perform

CREF Social Choice

2.58%

$

3,599,962

Perform

CREF Inflation-linked Bond

2.44%

$

3,405,874

Perform


2.38%

$

3,320,370

Underperform

CREF Equity Index

1.81%

$

2,517,603

N/A

TIAA Real Estate

0.60%

$

842,198

N/A

100.00%

$

139,366,932

Total

95

% of Assets

Asset Allocation by Category (%)

70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Fixed

Bond

Balanced

Large Cap Blend

96

Large Cap International Specialty Large Cap Growth

Asset Allocation Quarterly Comparison ($) Fund

97

Q3-2008

Q4-2008

Q1-2009

Q2-2009

TIAA Traditional

$

74,537,560

$

75,518,132

$

75,567,619

$

75,623,976

CREF Stock

$

45,588,519

$

34,906,400

$

26,273,848

$

30,393,404

CREF Money Market

$

12,330,375

$

13,284,795

$

12,206,243

$

11,793,806

CREF Growth

$

5,574,794

$

4,253,171

$

3,430,220

$

4,049,729

CREF Bond Market

$

4,454,703

$

4,597,185

$

4,058,794

$

3,820,011

CREF Social Choice

$

4,543,480

$

3,932,871

$

3,228,543

$

3,599,962


$

3,069,076

$

3,189,917

$

3,229,041

$

3,405,874


$

5,139,016

$

4,062,490

$

2,679,243

$

3,320,370

CREF Equity Index

$

3,844,316

$

2,942,082

$

2,081,418

$

2,517,603

TIAA Real Estate

$

1,814,808

$

1,580,215

$

943,778

$

842,198

Total

$ 160,896,646

$ 148,267,259

$ 133,698,746

$ 139,366,932

98 1.91% 2.15% 2.42% 2.44% 3.19% 2.74% 2.00% 2.38% 2.39% 1.98% 1.56% 1.81%

CREF Social Choice



CREF Equity Index

TIAA Real Estate

2.82% 2.65% 2.41% 2.58%

CREF Bond Market

1.13% 1.07% 0.71% 0.60%

2.77% 3.10% 3.04% 2.74%

CREF Growth

0% 3.46% 2.87% 2.57% 2.91%

20%

CREF Money Market

10% 7.66% 8.96% 9.13% 8.46%

30%

28.33% 23.54% 19.65% 21.81%

50%

CREF Stock

TIAA Traditional

60%

46.33% 50.93% 56.52% 54.26%

Asset Allocation Quarterly Comparison (%)

Q3-2008

Q4-2008

Q1-2009

Q2-2009

40%

Growth of Plan Assets

$190,000,000 $170,000,000 $150,000,000 $130,000,000 $110,000,000 $90,000,000 $70,000,000 $50,000,000 $30,000,000 $10,000,000 Plan Assets

99

Mar-08

June-08

Sept-08

Dec-08

Mar-09

Jun-09

$163,060,699

$161,259,967

$160,896,646

$148,267,259

$133,698,746

$139,366,932

Appendix

Evaluation Methodology Changes Effective 9/30/2007 – Change to Foreign Large Cap Equity Universe The evaluation methodology for foreign large cap equity funds has been changed to broaden the universe to include value, blend and growth funds. The rationale for this change was based on the following criteria: • Return-based style analysis illustrates that foreign large cap equity funds do not display strong style consistency quarter over quarter • The portfolio characteristics (P/E, regional exposure, market caps) are highly correlated across the value, blend and growth categories • Foreign equity fund mandates (prospectus objectives and guidelines) generally allow managers greater flexibility to invest in companies with various style versus their domestic counterparts • Foreign funds can invest across regions and countries whose market valuations are affected by individual currency and interest rates that are inherent to those areas, therefore, classifying holdings in traditional value and growth categories may not accurately reflect the manager’s stock selection style. For example, a high P/E growth company (based upon domestic measures) in Japan may be classified as a value stock simply because the Japanese market is undervalued compared to other foreign markets, thereby undervaluing the individual companies.

101

Glossary of Terms 3-Month Treasury Bill Three-month T-bills are government-backed, short-term investments considered to be risk-free and as good as cash because the maturity is only three months. Constant Maturity Treasury Indices (CMT) The 3 Year Constant Maturity Treasury yield is derived by the Treasury from the daily yield curve. The daily yield curve relates the yield on a security to its time to maturity and is based on the closing market bid yields on actively traded Treasury securities. These market yields are calculated from composites of quotations obtained by the Federal Reserve Bank of New York. Down Capture Ratio The Down Capture Ratio calculates the percentage of return of an index a fund will capture during down market cycles. Expense Ratio The percentage of fund assets paid for operating expenses and management fees, including 12b-1 fees, administrative fees, and all other asset-based costs incurred by the fund, except brokerage costs. Fund expenses are reflected in the fund’s NAV. Sales charges are not included in the expense ratio. Growth Stocks Investors employing a growth investment strategy buy stocks of companies with a recent history of increasing earnings, in anticipation that earnings momentum will continue. Growth stocks are often characterized by high valuation ratios (e.g., price-to-earnings ratios). See also: value stocks. Information Ratio Similar to the Sharpe Ratio, the Information Ratio is a risk-adjusted performance measurement, taking the excess return over the fund’s appropriate index and dividing it by the standard deviation. The Information Ratio measures the consistency with which a manager beats a benchmark.

Formula: (Rx – Ri) / e Rx = Fund’s 5 year annualized return (calculated on a monthly basis) Ri = Benchmark index 5 year annualized return e =   (Excess return – Benchmark Index) 2

102

Lehman Brothers Bond Indices The Lehman Brothers Bond Indices include fixed rate debt issue rated investment grade or higher by Moody’s, S&P, or Fitch, in that order. All issues have at least one year to maturity and an outstanding par value of at least $100 million for US Government issues and $50 million for all others. All returns are market value weighted inclusive of accrued interest. MSCI Country Indices Morgan Stanley Capital International Inc. (MSCI) maintains a set of indices commonly used by institutional investors as benchmarks for international stock markets. The most commonly cited index is the Europe, Australasia, Far East Index (EAFE), which covers developing markets within the indicated regions. The MSCI EAFE is typically used as a benchmark for broadly diversified “international” or “foreign” stock funds and accounts. The MSCI World Index covers all developed markets in the world including the United States, and is typically used as a benchmark for broadly diversified “global” or “world” stock funds and accounts. MSCI maintains many specialized indices covering other developed regions, emerging markets, and specific countries.

Mutual Fund A type of investment company that offers for sale or has outstanding securities which it has issued and which are redeemable on demand by the fund at current net asset value. All owners in the fund share in the gains or losses of the fund. Net Asset Value (NAV) Usually used in connection with investment companies to mean net asset value per share. An investment company computes its assets daily, or even twice daily, by totaling the market value of all securities owned. All liabilities are deducted, and the balance is divided by the number of shares outstanding. The resulting figure is the net asset value per share. The net asset value of a mutual fund (open-end investment company) is the bid and redemption price. Russell 1000 Value Index Market-capitalization weighted index of those firms in the Russell 1000 with lower price-to-book ratios and lower forecasted growth values. The Russell 1000 includes the largest 1000 firms in the Russell 3000, which represents approximately 98% of the invest-able US equity market.

R-squared R-squared is a measure of what percentage of a fund’s return can be attributed to movements in the benchmark. An R-squared of 100 indicates that all movements of a fund can be explained by its benchmark index.

Glossary of Terms Russell 1000 Growth Index Market-capitalization weighted index of those firms in the Russell 1000 with higher price-to-book ratios and higher forecasted growth values. The Russell 1000 includes the largest 1000 firms in the Russell 3000, which represents approximately 98% of the invest-able US equity market.

Formula: (Rx - Rf) / x Rx = Average annual rate of return of X Rf = Best available rate of return of a “risk-free” security (3 month T-bill)

Russell Mid Cap Value Index Market-weighted total return index that measures the performance of companies within the Russell 2000 having lower price-to-book ratios and lower forecasted growth values. The Russell 2000 includes the 2000 firms in the Russell 3000 with the smallest market capitalizations. The Russell 3000 Index represents approximately 98% of the invest-able US equity market.

Sharpe ratio measures the efficiency in the amount of risk taken as compared to the reward received for taking such risk.

Russell Mid Cap Growth Index Market-weighted total return index that measures the performance of companies within the Russell 2000 having higher price-to-book ratios and higher forecasted growth values. The Russell 2000 includes firms 201 through 1000, based on market capitalization, from the Russell 3000. The Russell 3000 Index represents approximately 98% of the invest-able US equity market.

Standard Deviation A statistical measurement of dispersion about an average, which, for a mutual fund, depicts how widely the returns varied over a certain period of time. Investors use the standard deviation of historical performance to try to predict the range of returns that are most likely for a given fund. When a fund has a high standard deviation, the predicted range of performance is wide, implying greater volatility.

Russell 2000 Value Index Market-weighted total return index that measures the performance of companies within the Russell 2000 Index having lower price-to-book ratios and lower forecasted growth values. The Russell 2000 Index includes the 2000 firms from the Russell 3000 Index with the smallest market capitalizations. The Russell 3000 Index represents 98% of the investable US equity market.

Total Returns Returns for periods longer than one year are expressed as “annualized returns.” This is equivalent to the compound rate of return which, over a certain period of time, would produce a fund’s total return over that same period.

Russell 2000 Growth Index Market-weighted total return index that measures the performance of companies within the Russell 2000 Index having higher price-to-book ratios and higher forecasted growth values. The Russell 2000 Index includes the 2000 firms from the Russell 3000 Index with the smallest market capitalizations. The Russell 3000 Index represents 98% of the investable US equity market. S&P 500 Index The S&P 500 Index consists of widely held common stocks, consisting of four broad sectors (industrials, utilities, financial, and transportation). It is a market-value weighted index (stock price times shares outstanding), with each stock affecting the index in proportion to its market value. This index, calculated by Standard & Poor’s, is a total return index with dividends reinvested.

103

Sharpe Ratio A direct measure of reward-to-risk. Defined as:

x =   (Excess return – 3 month T-bill) 2

Up Capture Ratio The Up Capture Ratio calculates the percentage return of an index a fund will capture during up market cycles. Value Stocks Investors employing a value investment strategy buy stocks of companies they believe are under-priced based on their fundamental ability to generate earnings, in anticipation that the price performance of the stock will reverse. Value stocks are often characterized by low valuation ratios (e.g., price-toearnings ratios). See also: growth stocks. Wilshire 4500 Measures the performance of all US common equity securities excluding the stocks in the S&P 500. Wilshire indices are reported as total returns with dividends reinvested.

Retirement Plan Limits ITEM Defined Contribution Annual Limit

IRS CODE 1

2008

2007

2006

2005

415 (c)(1)(A)

$

49,000

$

46,000 $

45,000 $

44,000 $

42,000

Defined Benefit Annual Limit 1

415 (b)(1)(A)

$

195,000

$

185,000 $

180,000 $

175,000 $

170,000

Maximum Compensation Limit 2

401(a)(17)

$

245,000

$

230,000 $

225,000 $

220,000 $

210,000

401(k) & 403(b) Employee Deferral Limit 3

402(g)(1)

$

16,500

$

15,500 $

15,500 $

15,000 $

14,000

Catch-Up Deferral Limit 4

414(v)(2)(B)(i)

$

5,500 $

5,000 $

5,000 $

5,000 $

4,000

414(q)(1)(B)

$

110,000

$

105,000 $

100,000 $

100,000 $

95,000

408(p)(2)(E)

$

11,500

$

10,500 $

10,500 $

10,000 $

10,000

$

106,800

$

102,000 $

97,500 $

94,200 $

90,000

Highly Compensated Employee (HCE) Compensation Level Maximum SIMPLE Plan Deferral Limit

1

Social Security Tax Wage Base

5

1

Limits are applied fo r the calendar year.

2

B ased o n year in which plan year begins. A ll co mpensatio n fro m a single emplo yer (including all members o f a co ntro lled gro up) must be aggregated fo r purpo ses o f this limit.

3 4 5

104

2009

Emplo yee deferrals to 401(k) and 403(b) plans must be aggregated fo r purpo ses o f this limit. Limits are applied during the calendar year. A vailable to emplo yees age 50 and o lder during the calendar year. Fo r the 2008 plan year, an emplo yee who earned $ 100,000 in 2007 is an HCE. Fo r the 2009 plan year, an emplo yee who earns $ 105,000 in 2008 is an HCE.

The material in this report is for Plan Sponsor use only and should not be reproduced without written permission by Benefit Funding Services Group.

WARRANTIES This report was prepared by Benefit Funding Services Group using data compiled from various sources. Benefit Funding Services Group does not warrant the accuracy of data provided by other sources, but does make reasonable efforts to obtain and utilize only reliable information. Past investment performance does not guarantee future results.

DISCLOSURES Returns stated in this report are net of fees unless otherwise noted. Sharpe Ratio and Standard Deviation data are provided for a 3-year period prior to the reporting date, unless otherwise noted. Calculations for returns-based style analysis charts are done by MPI Stylus. Evaluation methodology calculations are provided by MPI Stylus and Morningstar, Inc. Universe information is provided by Morningstar, Inc. Fund details and portfolio characteristics are provided by Morningstar, Inc. with the most recent data available from the investment companies.

Investment advisory services offered through Investment Advisor Representatives of Benefit Funding Services Group.

105

Benefit Funding Services Group 2040 Main Street, Suite #150, Irvine, CA 92614 Phone 949.955.2552 Fax 949.955.2553

Retirement Plan Quarterly Investment Review All Vendor Summary

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