Anexo

JOINT CIVILIAN AND POLICE PENSION BOARDS AGENDA FEBRUARY 8, 2012 - 3:00 P.M. CITY HALL COUNCIL CHAMBERS 15 LOOCKERMAN PLAZA DOVER, DELAWARE Public comments are welcomed on any item and will be permitted at appropriate times. When possible, please notify the City Clerk (736-7008 or e-mail at CityClerk@dover.de.us) should you wish to be recognized. AGENDA ADDITIONS/DELETIONS 1. Investment Performance Analysis Report (Peirce Park Group) 2. Value Investment Options (Peirce Park Group) 3. Adjournment by 3:30 p.m. /js S:\AGENDAS & MINUTES\Misc-Agendas\PENSION BOARDS\2012\JOINT CIVILIAN AND POLICE PENSION BOARDS\02-08-2012 JOINT CIVILIAN AND POLICE PENSION BOARDS.wpd TO ASSURE THAT THERE WILL BE A QUORUM, PLEASE RSVP BY CONTACTING THE CITY CLERK’S OFFICE BY EMAIL AT CITYCLERK@DOVER.DE.US OR BY CALLING 736-7008 AS SOON AS POSSIBLE. THE AGENDA ITEMS AS LISTED MAY NOT BE CONSIDERED IN SEQUENCE. THIS AGENDA IS SUBJECT TO CHANGE TO INCLUDE THE ADDITION OR THE DELETION OF ITEMS, INCLUDING EXECUTIVE SESSIONS.

City of Dover Investment Performance Report December 31, 2011 DATA Š KNOWLEDGE Š WISDOM Š RESULTS 300 South High Street Ph: (610) 719-0300 West Chester, PA 19382 Fax: (610) 719-8345 Offices in: Pittsburgh, PA & Wilmington, DE www.Peircepark.com

PEIRCE PARK GROUP PERFORMANCE EVALUATION AND REPORTING SERVICES INFORMATION DISCLAIMER Peirce Park Group has exercised reasonable professional care in the preparation of this performance report. Peirce Park Group relies on the client’s custodian for security holdings, market values, and transaction dates - these may differ from money manager statements. Returns are calculated using the custodian statements. There may be discrepancies in asset values and returns with managers, due to different values or methodologies used by the managers and custodians. When the manager(s) and the custodian are one and the same, we have no ability to determine the accuracy of the asset values put forth. Information in this report on market indices, security characteristics, and universe comparisons is received from Wilshire Associates. Therefore, we can make no guarantee as to the completeness or accuracy of the report. Total fund universes are generally comprised of separate accounts which are calculated gross of management fees. When clients have mutual funds in their portfolio, which have management fees included in returns (net), we increase (gross) the total fund return by an amount that reflects the internal costs of the fund (internal costs include, but are not limited to, management fees, advisory/subadvisory fees, administrative fees, interest expenses and fee reimbursements). We believe this allows for a better “apples to apples” universe comparison. Total Plan returns are derived from Wilshire Associates.

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Market Environment – 4th Quarter 2011 • 2011 presented investors with a host of challenges. Cumulative Returns 4th Quarter 2011 $118 • Natural disasters in Asia, political upheaval in the Middle East and continuation of the Eurozone debt crisis. $114 U.S. and European Stock Returns Diverging • October provided the best monthly return for U.S. Investors Growth of $100 $110 in over 20 years. $106 • Better than expected economic data. • Solid corporate earnings. $102 • Agreement to expand the capacity of the European Financial $98 Stability Facility (EFSF). $94 • Risky Assets outperformed. 9/30 10/5 10/10 10/15 10/20 10/25 10/30 11/4 11/9 11/14 11/19 11/24 11/29 12/4 12/9 12/14 12/19 12/24 12/29 • Fear and volatility returned to the markets in November. European Stocks US Stocks EURO • Confidence in Europe waned and the Euro weakened. Source: S&P, http://www.exchange-rates.org/history/EURO/USD/ • Consumer Confidence at lowest point in two years. U.S. Treasury Yields • Defensive Assets outperformed. 5.0% • U.S. economy showed some strength as 2011 ended. 4.5% 4.0% • Real GDP grew faster than annualized 3%. 3.5% • Strong 4th quarter holiday sales. 3.0% Percentage 2.5% • Unemployment reported at 8.6% - lowest level in 3 years. 2.0% • S&P placed European countries and the EFSF on CreditWatch 1.5% 1.0% negative. 0.5% 0.0% • Major central banks are creating money to enable their 1MO 3MO 6MO 1YR 2YR 3YR 5YR 7YR 10YR 20YR 30YR governments to sell their bonds, hold short-term rates at near Dec. 31, 2010 Sept. 30, 2011 Dec. 31, 2011 zero and prevent private sector lending from contracting. Source: U.S. Department of the Treasury

Market Environment – 4th Quarter 2011 Performance • “Risk” assets outperformed “Defensive” Assets p 20.0% 12.1% 7.8% • Small Cap outperformed Large Cap. 10.0% 1.1% 3.3% 4.4% 1.0% 0.0% • Economically sensitive sectors outperformed -10.0% defensive sectors. -20.0% -12.1% 4th QTR 1 YEAR -18.4% • Value outperformed growth. Russell 3000 Index Barclays Aggregate Bond MSCI EAFE MSCI Emerging Markets Source: Barclays Capital, Russell, MSCI • Credit spreads narrowed. Large Cap vs. Small Cap Stocks 20.0% • Longer-duration fixed income securities 16.0% 15.0% 15.0% 13.0% 13.4% 10.3% 11.2% outperformed intermediate/shorter-duration Total Return, % 10.0% 4.6% securities: 5.0% 1.1% 0.0% • Barclays Intermediate Government/Credit +0.8% -5.0% -1.4% -1.7% -2.9% • Barclays Long Government/Credit +2.6% -5.5% -10.0% 4th QTR 1 YEAR Large Value Large Growth Mid Value Mid Growth Small Value Small Growth Source: Russell • U.S. equities outperformed international equities. Currency Appreciation/Depreciation versus U.S. Dollar • Europe ex UK (+3.4%) 10.0% • United Kingdom (+9.1%) g 5.4% 5.0% 2.3% • Pacific ex Japan (+6.0%) Total Return, % 0.2% 0.4% • Japan (-3.9%) 0.0% -0.2% -0.5% -0.3% • Emerging Markets (+4.4%) -5.0% -2.9% -0.7% -1.5% -3.2% -3.2% -5.0% -10.0% • Eurozone weakening relative to U.S. dollars. -11.0% 11 -15.0% 4th QTR 1 YEAR Japan Europe United Kindom Brazil Russia S. Korea Switzerland Source: Markov Processes International

Market Environment – 4th Quarter 2011 DOMESTIC EQUITY QTR 1 Year 3 Year 5 Year 10 Year Russell 3000 Index 12.1 1.0 14.9 0.0 3.5 Russell 3000 Growth Index 10.9 2.2 18.1 2.5 2.7 Russell 3000 Value Index 13.3 (0.1) 11.6 (2.6) 4.1 S&P 500 Index 11.8 2.1 14.1 (0.2) 2.9 Russell 1000 Index 11.8 1.5 14.8 0.0 3.3 Russell 1000 Growth Index 10.6 2.6 18.0 2.5 2.6 Russell 1000 Value Index 13.1 0.4 11.5 (2.6) 3.9 Russell TOP 200 Index 11.6 2.8 12.8 (0.6) 2.1 Russell TOP 200 Growth Index 10.3 4.6 16.7 2.6 1.9 Russell TOP 200 Value Index 13.0 1.1 9.0 (3.7) 2.3 Russell d Mid-Cap Index 12.3 (1.5) 20.2 1.4 7.0 Russell Mid-Cap Growth Index 11.2 (1.7) 22.1 2.4 5.3 Russell Mid-Cap Value Index 13.4 (1.4) 18.2 0.0 7.7 Russell 2000 Index 15.5 (4.2) 15.6 0.2 5.6 Russell 2000 Growth Index 15.0 (2.9) 19.0 2.1 4.5 Russell 2000 Value Index 16.0 (5.5) 12.4 (1.9) 6.4 DOMESTIC EQUITY BY SECTOR MSCI US Consumer Discretionary 12.5 3.8 25.9 1.8 4.2 MSCI US Consumer Staples 9.6 14.0 14.7 7.5 7.5 MSCI US Energy 18.7 3.5 14.4 4.9 12.1 MSCI US Financials 11.8 (14.2) 4.1 (13.9) (2.1) MSCI US Health Care 9.8 10.7 12.8 3.5 3.1 MSCI US Industrials 17.2 (2.0) 15.2 0.8 4.3 MSCI US Information Technology 9.0 0.7 22.6 4.0 2.5 MSCI US Materials 16.0 (9.3) 19.7 3.0 7.7 MSCI US REITs 15.3 8.7 21.6 (1.5) 10.2 MSCI US Telecommunication Services 7.6 4.5 11.5 0.4 1.4 MSCI US Utilities 8.7 19.1 12.6 3.8 6.9

Market Environment – 4th Quarter 2011 DOMESTIC FIXED INCOME QTR 1 Year 3 Year 5 Year 10 Year Merrill Lynch 3-month T-Bill 0.0 0.1 0.1 1.5 2.0 Barclays Govt/Credit 1-3 Yr 0.2 1.6 2.7 4.0 3.6 Barclays Intermediate Government/Credit 0.8 5.8 5.6 5.9 5.2 Barclays Long Government/Credit 2.6 22.5 11.2 9.7 8.5 Barclays Government 0.8 9.0 4.0 6.6 5.6 Barclays Credit Bond 1.7 8.4 10.9 6.8 6.3 Barclays Aggregate Bond 1.1 7.8 6.8 6.5 5.8 Barclays Mortgage Backed Securities 0.9 6.2 5.8 6.5 5.7 Barclays High Yield Corporate Bond 6.5 5.0 24.1 7.5 8.9 Barclays TIPS 2.7 13.6 10.4 8.0 7.6 Consumer Price Index (0.3) 3.2 2.5 2.3 2.5 INTERNATIONAL/GLOBAL EQUITY MSCI EAFE (Net) 3.3 (12.1) 7.6 (4.7) 4.7 MSCI EAFE Growth (Net) 3.9 (12.1) 8.5 (3.2) 4.3 MSCI EAFE Value (Net) 2.7 (12.2) 6.8 (6.3) 5.0 MSCI EAFE Small Cap (Net) (0.6) (15.9) 14.6 (4.1) 9.0 MSCI AC World Index (Net) 7.2 (7.3) 12.0 (1.9) 4.2 MSCI AC World Index Growth (Net) 7.2 (7.4) 13.6 (0.5) 3.9 MSCI AC World Index Value (Net) 7.1 (7.3) 10.4 (3.5) 4.5 MSCI Europe ex UK (Net) 3.4 (15.3) 4.5 (6.2) 4.1 MSCI United Kingdom (Net) 9.1 (2.6) 14.9 (3.2) 4.8 MSCI Pacific ex Japan (Net) 6.0 (12.8) 20.8 2.7 11.6 MSCI Japan (Net) (3.9) (14.3) 1.7 (6.6) 3.0 MSCI Emerging Markets (Net) 4.4 (18.4) 20.1 2.4 13.9 FTSE EPRA/NAREIT Global Real Estate 6.7 (8.1) 15.9 (5.4) NA SPECIALTY S&P GSCI (3.6) 9.6 20.1 18.5 17.9 S&P GSCI Gold 9.0 (1.2) 6.9 (2.8) 5.6 Source: Russell, S&P, MSCI, Merrill Lynch, Barclays Capital, FTSE Copyright © 2012 Peirce Park Group. All Rights Reserved. This Report is not to be construed as an offer or solicitation to buy or sell securities, or to engage in any trading or investment strategy. The views contained in this Report are those of Peirce Park Group as of December 31st 2011, may change as subsequent conditions vary, and are based on information obtained by Peirce Park Group from sources that are believed to be reliable. Such information is not necessarily all inclusive and is not guaranteed as to accuracy. Peirce Park Group is not responsible for typographical or clerical errors in this Report or in the dissemination of its contents. Reliance upon information in this Report is at the sole discretion of the reader.

Highlights • Employee’s Fund returned 6.5% for the quarter. • Gained over $1.2 million. • Over 3 years, fund return ranks in the top quartile of public funds. • Police Fund returned 6.3% for the quarter. • Gained over $600k. • The following factors detracted from 4th quarter returns- • Overweight cash entering the quarter. • Underweight equities, particularly U.S. stocks. • Global equity managers – quality r growth out of favor. • Underperformance for 2011 attributable to- • Overweight small cap stocks – terminated Royce Value Plus during Q3. • Rebalancing/investing cash • Active management – terminated American Funds Growth Fund of America during Q3. g 1

Employee Pension Asset Summary Employees BMV Contribution Withdrawls Fees Gain EMV Return (month) October 19,487,752.14 0.00 283,201.93 1,110.53 1,341,685.79 20,545,125.47 6.98% November 20,545,125.47 0.00 267,717.38 1,136.92 (145,732.15) 20,130,539.02 -0.72% December 20,130,539.02 1,240,000.00 267,717.38 1,178.60 35,042.22 21,136,685.26 0.17% TOTAL (net) 19,487,752.14 1,240,000.00 818,636.69 3,426.05 1,230,995.86 21,136,685.26 6.39% + 0.07% QTR TOTAL (gross) = 6.46% 1 YEAR TOTAL (net) $18,939,612.22 3,490,270.11 3,205,366.39 13,278.13 (141,682.16) 21,136,685.26 -0.67% + 0.28% 1 YEAR TOTAL (gross) = -0.42% 2

Police Pension Asset Summary Police BMV Contribution Withdrawls Fees Gain EMV Return (month) October 10,089,781.26 0.00 122,635.79 440.21 678,196.47 10,644,901.73 6.80% November 10,644,901.73 0.00 122,635.79 454.13 (72,770.68) 10,449,041.13 -0.69% December 10,449,041.13 50,000.00 122,635.79 524.31 16,905.45 10,392,786.48 0.16% TOTAL (net) 10,089,781.26 50,000.00 367,907.37 1,418.65 622,331.24 10,392,786.48 6.23% + 0.07% QTR TOTAL (gross) = 6.30% 1 YEAR TOTAL (net) $10,541,171.36 730,000.00 1,471,295.88 5,528.20 (115,042.36) 10,392,786.48 -1.35% + 0.28% 1 YEAR TOTAL (gross) = -1.08% 3

Performance Summary – total fund cumulative & consecutive QUARTER 1 YEAR 3 YEARS 5 YEARS 7 YEARS TOTAL FUND RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK EMPLOYEE TOTAL FUND (Gross) 6.5 36 (0.4) 81 11.5 25 2.6 51 5.1 20 POLICE TOTAL FUND (Gross) 6.3 39 (1.1) 86 11.1 37 2.6 52 5.0 21 Policy Index* 6.9 23 1.3 38 11.2 30 2.0 66 4.1 72 *51% Russell 3000 / 35% Barclays Capital Intermediate Gov't/Credit / 14% MSCI EAFE (Net) Total Fund Return rankings are versus all public defined benefit plans in the Wilshire Cooperative Universe. 2011 2010 2009 2008 2007 TOTAL FUND RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK EMPLOYEE TOTAL FUND (Gross) (0.4) 81 12.6 50 23.8 15 (23.1) 42 6.5 72 POLICE TOTAL FUND (Gross) (1.1) 86 12.4 54 23.3 17 (22.3) 37 6.6 71 Policy Index* 1.3 38 12.3 56 21.0 30 (24.9) 56 7.0 63 *51% Russell 3000 / 35% Barclays Capital Intermediate Gov't/Credit / 14% MSCI EAFE (Net) Total Fund Return rankings are versus all public defined benefit plans in the Wilshire Cooperative Universe. 4

Performance Summary – cumulative QUARTER 1 YEAR 3 YEARS 5 YEARS 7 YEARS DOMESTIC EQUITIES RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK VANGUARD VALUE INDEX 12.5 43 1.2 34 11.5 57 (2.3) 58 2.2 45 MSCI US Prime Market Value 12.5 42 1.2 34 11.5 57 (2.3) 58 2.2 44 VANGUARD PRIMECAP CORE 10.4 73 (0.9) 58 16.0 11 2.8 4 5.4 3 MSCI US Prime Market 750 11.8 37 1.7 32 14.6 21 0.2 25 3.1 22 VANGUARD MORGAN GROWTH ADM. 9.5 57 (2.4) 59 16.5 35 0.7 54 3.3 37 Russell 3000 Growth 10.9 22 2.2 14 18.1 20 2.5 24 3.8 26 DFA U.S. TARGETED VALUE 17.3 16 (6.3) 72 16.8 48 (0.6) 66 3.5 54 Russell 2500 Value 15.5 33 (3.4) 42 15.5 69 (0.6) 65 3.3 56 GLOBAL EQUITIES AMERICAN FUNDS NEW PERSPECTIVE 6.3 68 (7.3) 47 13.0 40 0.8 20 4.8 15 MSCI WORLD (Net) 7.6 40 (5.5) 36 11.1 60 (2.4) 56 2.2 58 HARDING LOEVNER GLOBAL EQUITY 5.7 76 (8.2) 55 14.1 29 1.3 17 5.6 8 MSCI ACWI (Net) 7.2 50 (7.4) 47 12.0 52 (1.9) 53 2.8 47 INTERNATIONAL EQUITIES DFA INTERNATIONAL VALUE 3.1 78 (16.9) 89 8.6 31 (5.4) 59 2.3 35 MSCI EAFE Value (Net) 2.7 87 (12.2) 41 6.8 55 (6.3) 72 1.0 68 FIXED INCOME VANGUARD INTERMEDIATE BOND INDEX 1.6 32 10.7 1 9.0 43 7.9 4 6.5 7 Barclays 5-10 YR US Govt/Credit 1.6 29 10.8 1 8.9 45 7.8 5 6.4 9 VANGUARD SHORT TERM BOND INDEX 0.4 51 3.1 11 3.8 69 4.9 14 4.2 17 Barclays 1-5 YR US Govt/Credit 0.4 52 3.1 10 3.9 66 4.8 15 4.3 17 Mutual Fund returns are net of fees. Mutual Fund returns are displayed showing the actual fund's returns. These returns may differ from what the plan actually realized. All returns over one year are annualized. 5

Performance Summary – consecutive 2011 2010 2009 2008 2007 DOMESTIC EQUITIES RETURN RANK RETURN RANK RETURN RANK RETURN RANK RETURN RANK VANGUARD VALUE INDEX 1.2 34 14.5 36 19.7 68 (35.9) 42 0.1 62 MSCI US Prime Market Value 1.2 34 14.5 34 19.5 70 (36.0) 44 0.2 61 VANGUARD PRIMECAP CORE (0.9) 58 14.9 37 37.0 12 (31.3) 11 7.0 31 MSCI US Prime Market 750 1.7 32 15.9 23 27.8 44 (37.1) 45 6.4 35 VANGUARD MORGAN GROWTH ADM. (2.4) 59 18.9 25 36.3 41 (41.3) 58 11.4 64 Russell 3000 Growth 2.2 14 17.6 32 37.0 38 (38.4) 35 11.4 63 DFA U.S. TARGETED VALUE (6.3) 72 29.0 15 31.9 56 (33.8) 43 (8.2) 78 Russell 2500 Value (3.4) 42 24.8 40 27.7 75 (32.0) 32 (7.3) 74 GLOBAL EQUITIES AMERICAN FUNDS NEW PERSPECTIVE (7.3) 47 13.1 51 37.7 33 (37.8) 25 16.0 28 MSCI WORLD (Net) (5.5) 36 11.8 62 30.0 64 (40.7) 43 9.0 59 HARDING LOEVNER GLOBAL EQUITY (8.2) 55 15.6 33 40.2 28 (38.3) 27 16.4 25 MSCI ACWI (Net) (7.4) 47 12.7 54 34.6 42 (42.2) 54 11.7 45 INTERNATIONAL EQUITIES DFA INTERNATIONAL VALUE (16.9) 89 10.6 25 39.5 19 (46.3) 69 10.2 39 MSCI EAFE Value (Net) (12.2) 41 3.3 88 34.2 35 (44.1) 53 6.0 81 FIXED INCOME VANGUARD INTERMEDIATE BOND INDEX 10.7 1 9.5 16 6.9 82 5.0 15 7.7 6 Barclays 5-10 YR US Govt/Credit 10.8 1 9.4 16 6.5 84 5.1 15 7.6 7 VANGUARD SHORT TERM BOND INDEX 3.1 11 4.0 46 4.4 85 5.5 2 7.3 2 Barclays 1-5 YR US Govt/Credit 3.1 10 4.1 45 4.6 84 5.1 3 7.3 2 Mutual Fund returns are net of fees. Mutual Fund returns are displayed showing the actual fund's returns. These returns may differ from what the plan actually realized. 6

Allocation Summary TOTAL ASSET TOTAL ASSET TARGET EMPLOYEE TOTAL FUND POLICE TOTAL FUND ASSETS ALLOCATION ASSETS ALLOCATION ALLOCATION TOTAL FUND 21,136,685 100.0% TOTAL FUND 10,392,786 100.0% 100.0% DOMESTIC EQUITIES DOMESTIC EQUITIES VANGUARD VALUE INDEX 4,343,616 20.6% VANGUARD VALUE INDEX 2,344,864 22.6% VANGUARD PRIMECAP CORE 1,262,243 6.0% VANGUARD PRIMECAP CORE 563,433 5.4% VANGUARD MORGAN GROWTH ADM. 1,413,871 6.7% VANGUARD MORGAN GROWTH ADM. 861,965 8.3% DFA U.S. TARGETED VALUE 1,309,216 6.2% DFA U.S. TARGETED VALUE 560,788 5.4% TOTAL DOMESTIC EQUITIES 8,328,945 39.4% TOTAL DOMESTIC EQUITIES 4,331,049 41.7% 43.5% GLOBAL EQUITIES GLOBAL EQUITIES AMERICAN FUNDS NEW PERSPECTIVE (R6) 1,789,461 8.5% AMERICAN FUNDS NEW PERSPECTIVE (R6) 929,980 8.9% HARDING LOEVNER GLOBAL EQUITY 1,765,802 8.4% HARDING LOEVNER GLOBAL EQUITY 917,999 8.8% TOTAL GLOBAL EQUITIES 3,555,264 16.8% TOTAL GLOBAL EQUITIES 1,847,979 17.8% 16.0% INTERNATIONAL INTERNATIONAL DFA INTERNATIONAL VALUE 1,193,499 5.6% DFA INTERNATIONAL VALUE 615,634 5.9% 5.5% FIXED INCOME FIXED INCOME VANGUARD INTERMEDIATE BOND INDEX 2,251,417 10.7% VANGUARD INTERMEDIATE BOND INDEX 1,182,671 11.4% VANGUARD SHORT TERM BOND INDEX 4,447,959 21.0% VANGUARD SHORT TERM BOND INDEX 2,284,337 22.0% TOTAL FIXED INCOME 6,699,376 31.7% TOTAL FIXED INCOME 3,467,008 33.4% 35.0% CASH & EQUIVALENTS CASH & EQUIVALENTS MONEY MARKET 1,359,602 6.4% MONEY MARKET 131,117 1.3% 7

Security Characteristics – Employee Equities by Style as a % of Total Equity Style Value Core Growth 28 23 22 Large Fixed Income Valuation Multiples Portfolio Maturity 4.3 7 6 6 Medium Duration 3.9 Avg. Credit Quality AA 4 3 1 Small Portfolio Allocation Benchmark Allocation* 6.4% 31.7% 14.9% 35.0% 14.0% Cash 47.0% Fixed Income 51.0% Domestic Equity International Equity *51% Russell 3000 / 35% Barclay’s Intermediate Gov’t/Credit / 14% MSCI EAFE (Net) 8

Sector Allocations – Employee – as a % of total equities 18% 15% Employee Benchmark* 12% 9% 6% 3% 0% Basic Consumer Financial Real Estate Telecom Energy Industrials Technology Consumer Healthcare Utilities Materials Cyclical Services Defensive R i egional Allocations – Employee – as a % of total equities 90% Employee B n enchmark* 60% 30% 0% *51% Russell 3000 / 35% Barclay’s Intermediate Gov’t/Credit / 14% MSCI EAFE (Net) 9

Security Characteristics – Police Equities by Style as a % of Total Equity Style Value Core Growth 28 23 23 Large Fixed Income Valuation Multiples Portfolio Maturity 4.3 7 6 6 Medium Duration 3.9 Avg. Credit Quality AA 3 3 1 Small Portfolio Allocation Benchmark Allocation* 1.3% 35.0% 14.0% 33.4% 15.7% Cash 49.7% Fixed Income 51.0% Domestic Equity International Equity *51% Russell 3000 / 35% Barclay’s Intermediate Gov’t/Credit / 14% MSCI EAFE (Net) 10

Sector Allocations – Police – as a % of total equities 18% 15% Police Benchmark* 12% 9% 6% 3% 0% Basic Consumer Financial Real Estate Telecom Energy Industrials Technology Consumer Healthcare Utilities Materials Cyclical Services Defensive R i egional Allocations – Police – as a % of total equities 90% Police Benchmark* 60% 30% 0% *51% Russell 3000 / 35% Barclay’s Intermediate Gov’t/Credit / 14% MSCI EAFE (Net) 11

City of Dover - Employees Cumulative Performance Comparison Total Returns of Total Fund Public Sponsors Periods Ending 12/11 16% 14% 12% E 1 10% 8% E 1 6% E 4% 1 2% E 1 1 0% E -2% -4% Last Last Last 3 Last 5 Last 7 Qtr Year Years Years Years 5th Percentile 8.3 5.2 15.0 4.7 5.7 25th Percentile 6.9 1.9 11.6 3.6 4.9 Median 5.9 1.1 10.4 2.7 4.4 75th Percentile 5.0 0.1 9.2 1.8 4.0 95th Percentile 4.1 -1.8 7.1 0.6 3.1 E Employees Total Fund 6.5 (36) -0.4 (81) 11.5 (25) 2.6 (51) 5.1 (20) 1 Policy Index 6.9 (23) 1.3 (38) 11.2 (30) 2.0 (66) 4.1 (72) 12 Returns for periods greater than one year are annualized.

City of Dover - Employees Calendar Year Performance Comparison Total Returns of Total Fund Public Sponsors Years Ending December 30% 25% E 20% 1 1 15% E E1 1 E 10% E E1 5% E1 1 0% 1 E -5% -10% 1 -15% E -20% -25% E 1 -30% -35% 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 5th Percentile 5.2 16.5 27.8 -9.7 10.8 16.4 10.3 13.9 26.3 1.6 25th Percentile 1.9 13.9 21.9 -20.2 8.8 14.1 8.2 11.8 22.6 -5.8 Median 1.1 12.5 19.2 -24.0 7.6 12.2 6.5 9.9 19.7 -8.2 75th Percentile 0.1 11.2 15.5 -27.0 6.4 10.3 5.3 8.4 17.0 -9.7 95th Percentile -1.8 8.7 9.6 -30.4 4.6 7.2 3.9 5.7 11.3 -12.8 E Employees Total Fund -0.4 (81) 12.6 (50) 23.8 (15) -23.1 (42) 6.5 (72) 14.9 (16) 8.3 (24) 7.0 (89) 13.9 (88) -15.3 (97) 1 Policy Index 1.3 (38) 12.3 (56) 21.0 (30) -24.9 (56) 7.0 (63) 13.1 (38) 5.6 (67) 8.2 (77) 20.0 (47) -11.2 (86) 13 Returns for periods greater than one year are annualized.

City of Dover - Employees Return vs Risk Total Returns of Total Fund Public Sponsors 3 Years Ending 12/31/11 14.9 Median 14.0 Risk 13.1 Annualized Rate of Return 12.2 11.3 E 1 10.4 Median Return 9.5 8.7 7.8 6.9 6.0 7.0 8.2 9.4 10.6 11.8 13.0 14.2 15.4 16.6 17.8 19.0 Historical Standard Deviation of Return Annualized Return Standard Deviation Value Rank Value Rank E Employees Total Fund 11.5 25 15.2 87 1 Policy Index 11.2 30 14.9 86 Median 10.4 13.1 14

City of Dover - Employees Return vs Risk Total Returns of Total Fund Public Sponsors 5 Years Ending 12/31/11 7.0 Median 6.1 Risk 5.2 Annualized Rate of Return 4.3 3.4 Median 2.5 E Return 1 1.5 0.6 -0.2 -1.1 -2.0 6.0 7.4 8.8 10.2 11.6 13.0 14.4 15.8 17.2 18.6 20.0 Historical Standard Deviation of Return Annualized Return Standard Deviation Value Rank Value Rank E Employees Total Fund 2.6 51 14.3 74 1 Policy Index 2.0 66 14.4 76 Median 2.7 13.0 15

City of Dover - Police Pension Fund Cumulative Performance Comparison Total Returns of Total Fund Public Sponsors Periods Ending 12/11 16% 14% 12% P 1 10% 8% 1 6% P P 4% 1 2% P 1 1 0% P -2% -4% Last Last Last 3 Last 5 Last 7 Qtr Year Years Years Years 5th Percentile 8.3 5.2 15.0 4.7 5.7 25th Percentile 6.9 1.9 11.6 3.6 4.9 Median 5.9 1.1 10.4 2.7 4.4 75th Percentile 5.0 0.1 9.2 1.8 4.0 95th Percentile 4.1 -1.8 7.1 0.6 3.1 P Police Total Fund 6.3 (39) -1.1 (86) 11.1 (37) 2.6 (52) 5.0 (21) 1 Policy Index 6.9 (23) 1.3 (38) 11.2 (30) 2.0 (66) 4.1 (72) 16 Returns for periods greater than one year are annualized.

City of Dover - Police Pension Fund Calendar Year Performance Comparison Total Returns of Total Fund Public Sponsors Years Ending December 30% 25% P 20% 1 1 15% P P1 1 P 10% P 5% P1 1 P1 0% 1 P -5% -10% 1 -15% P -20% P -25% 1 -30% -35% 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 5th Percentile 5.2 16.5 27.8 -9.7 10.8 16.4 10.3 13.9 26.3 1.6 25th Percentile 1.9 13.9 21.9 -20.2 8.8 14.1 8.2 11.8 22.6 -5.8 Median 1.1 12.5 19.2 -24.0 7.6 12.2 6.5 9.9 19.7 -8.2 75th Percentile 0.1 11.2 15.5 -27.0 6.4 10.3 5.3 8.4 17.0 -9.7 95th Percentile -1.8 8.7 9.6 -30.4 4.6 7.2 3.9 5.7 11.3 -12.8 P Police Total Fund -1.1 (86) 12.4 (54) 23.3 (17) -22.3 (37) 6.6 (71) 14.9 (17) 8.3 (23) 6.6 (92) 13.8 (88) -15.2 (97) 1 Policy Index 1.3 (38) 12.3 (56) 21.0 (30) -24.9 (56) 7.0 (63) 13.1 (38) 5.6 (67) 8.2 (77) 20.0 (47) -11.2 (86) 17 Returns for periods greater than one year are annualized.

City of Dover - Police Pension Fund Return vs Risk Total Returns of Total Fund Public Sponsors 3 Years Ending 12/31/11 14.9 Median 14.0 Risk 13.1 Annualized Rate of Return 12.2 11.3 1 P 10.4 Median Return 9.5 8.7 7.8 6.9 6.0 7.0 8.2 9.4 10.6 11.8 13.0 14.2 15.4 16.6 17.8 19.0 Historical Standard Deviation of Return Annualized Return Standard Deviation Value Rank Value Rank P Police Total Fund 11.1 37 15.2 87 1 Policy Index 11.2 30 14.9 86 Median 10.4 13.1 18

City of Dover - Police Pension Fund Return vs Risk Total Returns of Total Fund Public Sponsors 5 Years Ending 12/31/11 7.0 Median 6.1 Risk 5.2 Annualized Rate of Return 4.3 3.4 Median 2.5 P Return 1 1.5 0.6 -0.2 -1.1 -2.0 6.0 7.4 8.8 10.2 11.6 13.0 14.4 15.8 17.2 18.6 20.0 Historical Standard Deviation of Return Annualized Return Standard Deviation Value Rank Value Rank P Police Total Fund 2.6 52 14.1 71 1 Policy Index 2.0 66 14.4 76 Median 2.7 13.0 19

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Domestic Equities 21

Vanguard Value Index Signal as of December 31, 2011 Prospectus Investment Objective Returns-Based Equity Style Map The investment seeks to replicate, net of expenses, the MSCI US Prime Market Value Index. The fund generally invests all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. The index Jan-07 - Dec-11 measures the investment return of large-capitalization value stocks. Lg Value Lg Growth 1 Portfolio Information Portfolio Characteristics Small - Large Ticker VVISX Vanguard Value MSCI US Prime Equity Style Box Large-Value Index Signal Market Value 0 Total Fund Net Assets $14.9B Turnover Ratio 27% - % Assets in Top 10 Holdings 31.5% Total Number of Holdings 410 420 Manager Name Gerard C. O'Reilly P/E Ratio 10.8 11.9 -1 Manager Tenure 17.0 years Sm Value Sm Growth P/B Ratio 1.3 1.5 Fund Incept Date 11/02/1992 -1 0 1 Avg Mkt Cap $MM $40.0B - Value - Growth Expense Ratio 0.12% Vanguard Value Index Signal MSCI US Prime Market Value Capture Ratios Jan-07 - Dec-11 140 Top Ten Holdings Market Capitalizations 130 Exxon Mobil Corporation 6.6% % Giant Cap Up Mkt Capture Ratio, % 120 Chevron Corp 3.4% % Large Cap % Medium Cap 110 The Procter & Gamble Co 3.2% % Small Cap Johnson & Johnson 3.2% 52.6% 100 19.4% % Micro Cap AT&T Inc 3.1% 90 General Electric Co 3.0% 80 Pfizer Inc 2.6% 70 Wells Fargo & Co 2.2% 60 60 70 80 90 100 110 120 130 140 JPMorgan Chase & Co 2.2% Down Mkt Capture Ratio, % Intel Corp 2.1% 27.4% Vanguard Value Index Signal MSCI US Prime Market Value Sector Allocations Batting Averages % Basic % Communication % Consumer % Consumer % % % Real % % % Financial % Materials Services Cyclical Defensive Healthcare Industrials Estate Technology Energy Services Utilities Jan-07 - Dec-11 20 19.5 18 0.9 16 14.8 0.8 Up Mkt Batting Average 14.0 14 0.7 12 10.5 0.6 10 9.0 7.9 0.5 8 7.0 6.0 0.4 6 4.8 4 3.3 3.2 0.3 2 0.2 0 0.1 0.0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Vanguard Value Index Signal Down Mkt Batting Average % Basic Materials % Communication Services % Consumer Cyclical % Consumer Defensive % Healthcare % Industrials % Real Estate % Technology % Energy % Financial Services % Utilities Vanguard Value Index Signal Please note: Fund returns are net of fees. Benchmark returns are gross of fees. 22

Vanguard Morgan Growth Adm as of December 31, 2011 Prospectus Investment Objective Returns-Based Equity Style Map The investment seeks long-term growth of capital. The fund invests mainly in the stocks of mid- and large-capitalization U.S. companies whose revenues and/or earnings are expected to grow faster than those of the average company in the market. It uses multiple investment advisors. Jan-07 - Dec-11 Lg Value Lg Growth 1 Portfolio Information Portfolio Characteristics Small - Large Ticker VMRAX Vanguard Morgan Russell 3000 Equity Style Box Large-Growth Growth Adm Growth 0 Total Fund Net Assets $8.1B Turnover Ratio 55% - % Assets in Top 10 Holdings 24.5% Total Number of Holdings 334 1,744 Manager Name James P. Stetler P/E Ratio 15.3 15.9 -1 Manager Tenure 8.0 years P/B Ratio 2.9 3.6 Sm Value Sm Growth Fund Incept Date 12/31/1968 Avg Mkt Cap $MM $21.4B - -1 0 1 Value - Growth Expense Ratio 0.27% Vanguard Morgan Growth Adm Russell 3000 Growth Capture Ratios Jan-07 - Dec-11 140 Top Ten Holdings Market Capitalizations 130 Apple, Inc. 4.8% % Giant Cap Up Mkt Capture Ratio, % 120 International Business Machines Corp 3.6% 34.2% 3.8% % Large Cap % Medium Cap 110 CMT Market Liquidity Rate 3.3% % Small Cap Oracle Corporation 2.4% 100 % Micro Cap Microsoft Corporation 2.1% 90 Cisco Systems Inc 2.0% 80 EMC Corporation 1.9% 30.6% 70 Amazon.com Inc 1.5% 60 60 70 80 90 100 110 120 130 140 Starbucks Corporation 1.4% Down Mkt Capture Ratio, % Altera Corp. 1.4% 31.1% Vanguard Morgan Growth Adm Russell 3000 Growth Sector Allocations Batting Averages % Basic % Communication % Consumer % Consumer % % % Real % % % Financial % Materials Services Cyclical Defensive Healthcare Industrials Estate Technology Energy Services Utilities Jan-07 - Dec-11 40 37.3 0.9 35 0.8 Up Mkt Batting Average 30 0.7 26.0 25 0.6 0.5 20 15.5 0.4 15 13.8 12.5 12.4 11.8 12.4 0.3 10.6 10.7 10 8.2 0.2 6.0 4.8 0.1 5 2.9 3.1 2.2 2.2 1.8 2.5 0.3 0.1 0.1 0.0 0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Down Mkt Batting Average Vanguard Morgan Growth Adm Russell 3000 Growth Vanguard Morgan Growth Adm Please note: Fund returns are net of fees. Benchmark returns are gross of fees. 23

Vanguard PRIMECAP Core Inv as of December 31, 2011 Prospectus Investment Objective Returns-Based Equity Style Map The investment seeks to provide long-term capital appreciation. The fund invests in stocks of companies whose future earnings potential, in the view of the fund's advisor, is not reflected in their current market prices. It can invest in stocks across all industry sectors and market capitalizations. Jan-07 - Dec-11 Lg Value Lg Growth 1 Portfolio Information Portfolio Characteristics Small - Large Ticker VPCCX Vanguard PRIMECAP MSCI US Prime Equity Style Box Large-Growth Core Inv Market 750 0 Total Fund Net Assets $4.6B Turnover Ratio 9% - % Assets in Top 10 Holdings 28.7% Total Number of Holdings 136 751 Manager Name Joel P. Fried P/E Ratio 13.4 13.8 -1 Manager Tenure 7.1 years P/B Ratio 2.3 2.0 Sm Value Sm Growth Fund Incept Date 12/09/2004 Avg Mkt Cap $MM $28.6B - -1 0 1 Value - Growth Expense Ratio 0.51% Vanguard PRIMECAP Core Inv MSCI US Prime Market 750 Capture Ratios Jan-07 - Dec-11 140 Top Ten Holdings Market Capitalizations 130 Amgen Inc 4.6% % Giant Cap Up Mkt Capture Ratio, % 120 Roche Holding AG 3.5% % Large Cap 39.2% % Medium Cap 110 CMT Market Liquidity Rate 3.1% % Small Cap Novartis AG ADR 3.0% 16.5% 100 % Micro Cap Eli Lilly and Company 2.9% 90 Marsh & McLennan Companies, Inc. 2.8% 80 Amazon.com Inc 2.4% 70 Medtronic, Inc. 2.2% 60 60 70 80 90 100 110 120 130 140 Google, Inc. 2.2% Down Mkt Capture Ratio, % The Boeing Co 2.1% 43.6% Vanguard PRIMECAP Core Inv MSCI US Prime Market 750 Sector Allocations Batting Averages % Basic % Communication % Consumer % Consumer % % % Real % % % Financial % Materials Services Cyclical Defensive Healthcare Industrials Estate Technology Energy Services Utilities Jan-07 - Dec-11 30 26.3 0.9 25.2 25 0.8 Up Mkt Batting Average 0.7 20 17.3 0.6 16.6 0.5 15 11.8 12.1 0.4 10.9 11.3 10.9 9.9 10.2 10 0.3 5.7 6.3 0.2 4.9 4.2 5 3.8 3.7 0.1 2.3 2.5 1.5 1.1 0.0 0.0 0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Down Mkt Batting Average Vanguard PRIMECAP Core Inv Russell 1000 Vanguard PRIMECAP Core Inv Please note: Fund returns are net of fees. Benchmark returns are gross of fees. 24

DFA US Targeted Value I as of December 31, 2011 Prospectus Investment Objective Returns-Based Equity Style Map The investment seeks long-term capital appreciation. The fund normally invests in a broad and diverse group of common stocks of U.S. small and mid cap companies that the Advisor determines to be value stocks. It normally invests at least 80% of net assets in securities of U.S. companies. The Jan-07 - Dec-11 Advisor considers for investment companies whose market capitalizations are generally smaller than the 500th largest U.S. company. The fund may use derivatives, such as futures contracts and options on futures contracts for U.S. equity securities and indices. It may also lend its portfolio Lg Value Lg Growth 1 securities to generate additional income. Portfolio Information Portfolio Characteristics Small - Large Ticker DFFVX DFA US Targeted Russell 2500 Equity Style Box Small-Value Value I Value 0 Total Fund Net Assets $2.6B Turnover Ratio 23% - % Assets in Top 10 Holdings 6.7% Total Number of Holdings 1,527 1,690 Manager Name Stephen A. Clark P/E Ratio 13.1 13.7 -1 Manager Tenure 3.8 years P/B Ratio 1.1 1.2 Sm Value Sm Growth Fund Incept Date 02/23/2000 Avg Mkt Cap $MM $1.3B - -1 0 1 Value - Growth Expense Ratio 0.38% DFA US Targeted Value I Russell 2500 Value Capture Ratios Jan-07 - Dec-11 140 Top Ten Holdings Market Capitalizations 130 Tesoro Corporation 0.7% % Giant Cap Up Mkt Capture Ratio, % 30.5% 120 Plains Exploration & Production Company 0.7% % Large Cap % Medium Cap 110 Rowan Companies, Inc. 0.7% % Small Cap Smithfield Foods, Inc. 0.7% 100 % Micro Cap Ashland Inc 0.7% 90 27.8% NASDAQ OMX Group, Inc. 0.7% 80 Sunoco, Inc. 0.7% 70 Reinsurance Group of America Inc 0.6% 60 60 70 80 90 100 110 120 130 140 Omnicare Inc 0.6% Down Mkt Capture Ratio, % Mohawk Industries, Inc. 0.6% 41.7% DFA US Targeted Value I Russell 2500 Value Sector Allocations Batting Averages % Basic % Communication % Consumer % Consumer % % % Real % % % Financial % Materials Services Cyclical Defensive Healthcare Industrials Estate Technology Energy Services Utilities Jan-07 - Dec-11 25 22.9 21.6 0.9 20 0.8 Up Mkt Batting Average 17.1 0.7 15.8 0.6 15 13.3 0.5 11.5 10.6 0.4 9.3 9.7 10.0 10 8.1 0.3 7.0 6.2 5.9 5.1 0.2 5 4.0 4.0 4.6 0.1 1.5 0.9 0.0 0.4 0.0 0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 Down Mkt Batting Average DFA US Targeted Value I Russell 2500 Value DFA US Targeted Value I Please note: Fund returns are net of fees. Benchmark returns are gross of fees. 25

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Global Equities 27

American Funds New Perspective R6 as of December 31, 2011 Prospectus Investment Objective Returns-Based Equity Style Map The investment seeks long-term growth of capital and future income as its secondary objective. The fund normally invests in stocks of companies located around the world to take advantage of investment opportunities generated by changes in international trade patterns and economic and Nov-08 - Dec-11 political relationships. In pursuing its primary investment objective, it invests primarily in common stocks that the investment adviser believes have the potential for growth. In pursuing its secondary objective, the fund invests in common stocks of companies with the potential to pay dividends in the ACWI Lg Value ACWI Lg Growth 1 future. Portfolio Information Portfolio Characteristics Small-Large Ticker RNPGX American Funds New Equity Style Box Large-Growth Perspective R6 0 Total Fund Net Assets $40.4B Turnover Ratio 24% % Assets in Top 10 Holdings 17.9% Total Number of Holdings 282 Manager Name Gregg E. Ireland P/E Ratio 13.7 -1 Manager Tenure 19.1 years ACWI Sm Value ACWI Sm Growth P/B Ratio 2.0 Fund Incept Date 03/13/1973 -1 0 1 Avg. Mkt. Capitalization $36.6B Value-Growth Expense Ratio 0.46% American Funds New Perspective R6 MSCI World (Net) Capture Ratios Nov-08 - Dec-11 Top Ten Holdings Sector Allocations 140 16 15.9 Novo Nordisk A/S 3.8% % Basic Materials 120 Up Mkt Capture Ratio, % 14.3 Amazon.com Inc 2.1% 14 13.4 13.2 % Communication Services 100 Apple, Inc. 1.9% 12.3 % Consumer Cyclical 12 80 Newmont Mining Corporation 1.8% 10.7 % Consumer Defensive 10 % Healthcare 60 British American Tobacco PLC 1.6% 9.4 % Industrials Barrick Gold Corporation 1.5% 40 8 % Real Estate Google, Inc. 1.4% 6.0 % Technology 20 6 Oracle Corporation 1.4% % Energy 0 4 % Financial Services 0 20 40 60 80 100 120 140 America Movil, S.A.B. de C.V. ADR L 1.2% 3.2 % Utilities Down Mkt Capture Ratio, % Texas Instruments, Inc. 1.2% 2 1.3 0.3 American Funds New Perspective R6 0 MSCI World (Net) Market Capitalizations Developed/Emerging Market Allocations Batting Averages % Giant Cap 7.0% % Emerging Market Nov-08 - Dec-11 % Large Cap % Developed Country 0.7 % Medium Cap 8.9% 0.6 % Small Cap Up Mkt Batting Average % Micro Cap 0.5 57.8% 0.4 0.3 0.2 0.1 33.0% 0.0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 Down Mkt Batting Average 93.0% American Funds New Perspective R6 28

Harding Loevner Global Equity Inst as of December 31, 2011 Prospectus Investment Objective Returns-Based Equity Style Map The investment seeks long-term capital. The fund invests in companies based in the U.S. and other developed markets, as well as in emerging and frontier markets. It invests at least 80% of net assets in common stocks, preferred stock, rights and warrants issued by companies that are based Nov-08 - Dec-11 both inside and outside the United States, securities convertible into such securities and investment companies that invest in the types of securities in which the fund would normally invest. The fund may also invest in derivatives. It normally holds 35-75 investments across at least 15 countries. ACWI Lg Value ACWI Lg Growth 1 Portfolio Information Portfolio Characteristics Small-Large Ticker HLMVX Harding Loevner Equity Style Box Large-Growth Global Equity Inst 0 Total Fund Net Assets $0.2B Turnover Ratio 40% % Assets in Top 10 Holdings 30.2% Total Number of Holdings 65 Manager Name Ferrill Roll P/E Ratio 14.3 -1 Manager Tenure 10.9 years ACWI Sm Value ACWI Sm Growth P/B Ratio 2.2 Fund Incept Date 11/29/1996 -1 0 1 Avg. Mkt. Capitalization $27.5B Value-Growth Expense Ratio 1.00% Harding Loevner Global Equity Inst MSCI ACWI (Net) Capture Ratios Nov-08 - Dec-11 Top Ten Holdings Sector Allocations 140 20 Northern Instl Fds 4.5% % Basic Materials 120 Up Mkt Capture Ratio, % 18.4 18 Unicharm Corp 3.3% 17.0 % Communication Services 100 Li & Fung Ltd. 3.2% 16 % Consumer Cyclical 14.8 14.9 14.5 % Consumer Defensive 80 Wells Fargo & Co 3.2% 14 % Healthcare 60 Apple, Inc. 3.1% 12 % Industrials Monsanto Company 2.7% 40 10 % Real Estate eBay Inc 2.7% 8 % Technology 20 Fanuc Corp 2.6% 6.4 5.9 5.9 % Energy 0 6 % Financial Services 0 20 40 60 80 100 120 140 EMC Corporation 2.5% 4 % Utilities Down Mkt Capture Ratio, % JPMorgan Chase & Co 2.4% 2 2.2 Harding Loevner Global Equity Inst 0.0 0.0 0 MSCI ACWI (Net) Market Capitalizations Developed/Emerging Market Allocations Batting Averages % Giant Cap 11.6% % Emerging Market Nov-08 - Dec-11 1.6% % Large Cap % Developed Country % Medium Cap % Small Cap 0.4 Up Mkt Batting Average 52.2% 15.5% % Micro Cap 0.3 0.2 0.1 0.0 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 30.7% Down Mkt Batting Average 88.4% Harding Loevner Global Equity Inst 29

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International Equities 31

DFA International Value I as of December 31, 2011 Prospectus Investment Objective Returns-Based Equity Style Map The investment seeks long-term capital appreciation. The fund normally invests substantially all of its assets in the DFA International Value Series. The DFA International Value Series, using a market capitalization weighted approach, purchases stocks of large non-U.S. companies in countries Nov-08 - Dec-11 with developed markets that the Advisor determines to be value stocks. ACWIexUS LgVal ACWIexUS LgGro 1 Portfolio Information Portfolio Characteristics Ticker DFIVX DFA International MSCI EAFE Equity Style Box Large-Value Value I Value (Net) 0 Total Fund Net Assets $5.0B Turnover Ratio 20% - % Assets in Top 10 Holdings 17.7% Total Number of Holdings 545 510 Manager Name Karen E. Umland P/E Ratio 10.2 9.2 Manager Tenure 13.0 years P/B Ratio 0.8 0.9 -1 ACWIexUS SmVal ACWIexUS SmGro Fund Incept Date 02/15/1994 Avg. Mkt. Capitalization $21.1B - -1 0 1 Expense Ratio 0.45% DFA International Value I MSCI EAFE Value (Net) Capture Ratios Nov-08 - Dec-11 Top Ten Holdings Sector Allocations 140 30 Vodafone Group PLC ADR 3.5% % Basic Materials 120 Up Mkt Capture Ratio, % Royal Dutch Shell PLC ADR 3.5% 26.1 % Communication Services 25 100 BP PLC ADR 1.6% % Consumer Cyclical % Consumer Defensive 80 Daimler AG 1.5% 20 % Healthcare 60 Suncor Energy Inc 1.4% % Industrials Vodafone Group PLC 1.4% 40 15 13.7 % Real Estate 12.9 12.3 Wesfarmers Ltd 1.3% % Technology 20 GDF Suez 1.2% 10 8.8 9.6 % Energy 0 % Financial Services 0 20 40 60 80 100 120 140 TransCanada Corp 1.2% 5.3 5 4.5 % Utilities Down Mkt Capture Ratio, % Vivendi SA 1.2% 3.5 1.8 1.4 DFA International Value I 0 MSCI EAFE Value (Net) Market Capitalizations Developed/Emerging Market Allocations Batting Averages % Giant Cap % Emerging Market Nov-08 - Dec-11 % Large Cap % Developed Country 0.8 % Medium Cap 0.7 43.7% 13.9% % Small Cap Up Mkt Batting Average % Micro Cap 0.6 0.5 0.4 0.3 0.2 0.1 0.0 0.0 0.1 0.2 0.3 0.4 100.0% Down Mkt Batting Average 42.4% DFA International Value I 32

Fixed Income 33

This material is for internal and/or client reporting purposes only and may not be used Advanced Analytics Page 1 of 1 as sales material or by broker/dealers in connection with the sale of any security. Release Date: 12-31-2011 Vanguard Interm-Term Bond Index Signal EQ Style FI Style Morningstar Category AA Data updated through 12-31-2011 - Ì Medium/Lo Intermediate-term Bond Portfolio: Bond Quality Credit Quality % Credit Quality % Average AAA AA A BBB BB B Below B NR/NA As of 09-30-11 A 58 7 17 18 0 0 0 0 2010 A 55 6 20 19 0 0 0 0 2009 A 54 6 21 19 0 0 0 0 2008 A 58 5 22 15 0 0 0 0 ......................................................................................................................................................... Maturity and Duration Stated Maturity Range % Avg Eff Avg Eff Maturity Yr 1-3 Yr 3-5 Yr 5-7 Yr 7-10 Yr 10-15 Yr 15-20 Yr 20-30 Yr Duration As of 09-30-11 7.3 0.1 0.5 42.0 57.0 0.2 0.0 0.0 *6.4 2010 7.3 0.0 0.1 44.0 55.3 0.3 0.0 0.0 *6.3 2009 7.5 0.0 0.2 36.8 62.3 0.1 0.0 0.1 *6.3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Coupon and Price Coupon Range % Avg Wtd Avg Wtd Coupon % 0,PIK 0-8 8-11 11-13 13-14.5 +14.5 NA Price As of 09-30-11 4.63 0.16 93.83 4.74 0.01 0.00 0.00 1.26 113.33 2010 4.78 0.08 93.64 4.99 0.05 0.00 0.00 1.24 108.39 2009 5.38 0.21 89.69 7.96 0.82 0.00 0.00 1.32 107.05 * Provided by fund © 1996-2011 Morningstar, Inc. All rights reserved. 22 W. Washington Street, Chicago, IL, 60602, 312-696-6000 ß Principia™ 34 Although data are gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy.

This material is for internal and/or client reporting purposes only and may not be used Advanced Analytics Page 1 of 1 as sales material or by broker/dealers in connection with the sale of any security. Release Date: 12-31-2011 Vanguard Interm-Term Bond Index Signal EQ Style FI Style Morningstar Category AA Data updated through 12-31-2011 - Ì Medium/Lo Intermediate-term Bond Portfolio: Composition % of bonds % 100 90 80 Historical Range 70 High 60 09-30-11 50 Low 40 30 20 10 0 US Govt Non-US Govt Municipal Corporate Securitized Cash & Eqv Derivatives As of 09-30-11 56.4 4.2 0.2 38.3 0.3 0.5 0.0 3 year Average 52.8 4.8 0.1 40.1 1.3 0.9 0.0 2010 56.9 4.1 0.1 37.5 1.0 0.4 0.0 2009 50.2 5.0 0.1 42.9 1.2 0.6 0.0 2008 51.3 5.3 0.0 40.0 1.6 1.8 0.0 2007 - - - - - - - 2006 - - - - - - - 2005 - - - - - - - 2004 - - - - - - - 2003 - - - - - - - © 1996-2011 Morningstar, Inc. All rights reserved. 22 W. Washington Street, Chicago, IL, 60602, 312-696-6000 ß Principia™ 35 Although data are gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy.

Vanguard Interm-Term Bond Index Signal as of December 31, 2011 Cumulative Returns 16 Annual Return vs. Annual Std. Dev. 14 Jan-07 - Dec-11 8 Total Annualized Return, % 12 7 Total Annualized Return, % 6 10 5 8 4 3 6 2 4 1 0 0 5 10 2 Total Annualized StdDev, % 0 QTR YTD 1 Year 3 Years 5 Years 10 Years Vanguard Interm-Term Bond Index Signal BarCap US Govt/Credit 5-10 Yr Vanguard Interm-Term Bond Index Signal BarCap US Govt/Credit 5-10 Yr Capture Ratios QTR 1 Year 3 Years 5 Years 10 Years Jan-07 - Dec-11 Vanguard Interm-Term Bond Index Signal 1.6 10.7 9.0 7.9 6.7 120 BarCap US Govt/Credit 5-10 Yr 1.6 10.8 8.9 7.8 6.9 100 Up Mkt Capture Ratio, % Peer Group Rankings: 80 Vanguard Interm-Term Bond Index Signal 32 1 43 4 7 60 BarCap US Govt/Credit 5-10 Yr 29 1 45 5 5 40 Consecutive Returns 30 20 25 0 20 0 20 40 60 80 100 120 Down Mkt Capture Ratio, % 15 Total Return, % Vanguard Interm-Term Bond Index Signal 10 BarCap US Govt/Credit 5-10 Yr 5 Batting Averages 0 Jan-07 - Dec-11 -5 -10 0.5 Up Mkt Batting Average -15 0.4 -20 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 0.3 Vanguard Interm-Term Bond Index Signal BarCap US Govt/Credit 5-10 Yr 0.2 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 0.1 Vanguard Interm-Term Bond Index Signal 10.7 9.5 6.9 5.0 7.7 3.9 1.8 5.2 5.6 10.9 BarCap US Govt/Credit 5-10 Yr 10.8 9.4 6.5 5.1 7.6 3.8 1.8 5.3 6.0 13.0 0.0 0.0 0.1 0.2 0.3 0.4 Peer Group Rankings: Down Mkt Batting Average Vanguard Interm-Term Bond Index Signal 1 16 82 15 6 66 71 12 29 7 Vanguard Interm-Term Bond Index Signal BarCap US Govt/Credit 5-10 Yr 1 16 84 15 7 74 64 10 25 1 36

This material is for internal and/or client reporting purposes only and may not be used Advanced Analytics Page 1 of 1 as sales material or by broker/dealers in connection with the sale of any security. Release Date: 12-31-2011 Vanguard Short-Term Bond Index Signal EQ Style FI Style Morningstar Category AA Data updated through 12-31-2011 - Ç High/Short Short-term Bond Portfolio: Bond Quality Credit Quality % Credit Quality % Average AAA AA A BBB BB B Below B NR/NA As of 09-30-11 AA 72 10 11 7 0 0 0 0 2010 AA 76 6 11 7 0 0 0 0 2009 AA 76 6 11 8 0 0 0 0 2008 AA 75 5 12 7 0 0 0 0 ......................................................................................................................................................... Maturity and Duration Stated Maturity Range % Avg Eff Avg Eff Maturity Yr 1-3 Yr 3-5 Yr 5-7 Yr 7-10 Yr 10-15 Yr 15-20 Yr 20-30 Yr Duration As of 09-30-11 2.7 61.0 37.2 1.8 0.0 0.0 0.0 0.0 *2.6 2010 2.7 57.2 41.4 1.4 0.0 0.0 0.0 0.0 *2.6 2009 2.7 61.0 38.2 0.7 0.0 0.0 0.0 0.0 *2.6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Coupon and Price Coupon Range % Avg Wtd Avg Wtd Coupon % 0,PIK 0-8 8-11 11-13 13-14.5 +14.5 NA Price As of 09-30-11 2.55 20.30 78.74 0.46 0.30 0.00 0.00 0.20 104.01 2010 2.84 9.43 89.63 0.59 0.02 0.00 0.00 0.33 103.54 2009 3.58 9.20 89.80 0.66 0.02 0.00 0.00 0.32 103.39 * Provided by fund © 1996-2011 Morningstar, Inc. All rights reserved. 22 W. Washington Street, Chicago, IL, 60602, 312-696-6000 ß Principia™ 37 Although data are gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy.

This material is for internal and/or client reporting purposes only and may not be used Advanced Analytics Page 1 of 1 as sales material or by broker/dealers in connection with the sale of any security. Release Date: 12-31-2011 Vanguard Short-Term Bond Index Signal EQ Style FI Style Morningstar Category AA Data updated through 12-31-2011 - Ç High/Short Short-term Bond Portfolio: Composition % of bonds % 100 90 80 Historical Range 70 High 60 09-30-11 50 Low 40 30 20 10 0 US Govt Non-US Govt Municipal Corporate Securitized Cash & Eqv Derivatives As of 09-30-11 70.2 4.5 0.1 23.2 0.4 1.5 0.0 3 year Average 65.7 4.2 0.0 25.2 1.0 3.9 0.0 2010 69.2 4.1 0.1 24.0 0.5 2.1 0.0 2009 62.8 4.4 0.0 26.1 1.1 5.6 0.0 2008 65.0 4.0 0.0 25.5 1.5 4.0 0.0 2007 - - - - - - - 2006 - - - - - - - 2005 - - - - - - - 2004 - - - - - - - 2003 - - - - - - - © 1996-2011 Morningstar, Inc. All rights reserved. 22 W. Washington Street, Chicago, IL, 60602, 312-696-6000 ß Principia™ 38 Although data are gathered from reliable sources, Morningstar cannot guarantee completeness and accuracy.

Vanguard Short-Term Bond Index Signal as of December 31, 2011 Cumulative Returns 10 Annual Return vs. Annual Std. Dev. 9 Jan-07 - Dec-11 8 5 Total Annualized Return, % Total Annualized Return, % 7 4 6 3 5 4 2 3 1 2 1 0 0 5 0 Total Annualized StdDev, % -1 QTR YTD 1 Year 3 Years 5 Years 10 Years Vanguard Short-Term Bond Index Signal BarCap Govt/Credit 1-5 Yr Vanguard Short-Term Bond Index Signal BarCap Govt/Credit 1-5 Yr Capture Ratios QTR 1 Year 3 Years 5 Years 10 Years Jan-07 - Dec-11 Vanguard Short-Term Bond Index Signal 0.4 3.1 3.8 4.8 4.1 120 BarCap Govt/Credit 1-5 Yr 0.4 3.1 3.9 4.8 4.3 100 Up Mkt Capture Ratio, % Peer Group Rankings: 80 Vanguard Short-Term Bond Index Signal 51 11 69 14 17 60 BarCap Govt/Credit 1-5 Yr 52 10 66 15 14 40 Consecutive Returns 20 20 15 0 0 20 40 60 80 100 120 10 Down Mkt Capture Ratio, % Total Return, % 5 Vanguard Short-Term Bond Index Signal BarCap Govt/Credit 1-5 Yr 0 Batting Averages -5 Jan-07 - Dec-11 -10 0.5 -15 Up Mkt Batting Average 0.4 -20 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 0.3 Vanguard Short-Term Bond Index Signal BarCap Govt/Credit 1-5 Yr 0.2 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 0.1 Vanguard Short-Term Bond Index Signal 3.1 4.0 4.4 5.5 7.3 4.1 1.3 1.7 3.4 6.1 BarCap Govt/Credit 1-5 Yr 3.1 4.1 4.6 5.1 7.3 4.2 1.4 1.8 3.4 8.1 0.0 0.0 0.1 0.2 0.3 0.4 Peer Group Rankings: Down Mkt Batting Average Vanguard Short-Term Bond Index Signal 11 46 85 2 2 58 77 44 29 37 Vanguard Short-Term Bond Index Signal BarCap Govt/Credit 1-5 Yr 10 45 84 3 2 49 63 39 29 8 39

Glossary Batting Average: Defined as the number of periods that the product outperforms the benchmark divided by the total number of periods for the entire evaluation period. It is a percentage indicating the probability of “value-added” performance by the product compared to the benchmark in a given date range. Down Market Capture Return: A measure of the manager’s performance in down markets relative to the market itself. This is an annualized semi-variance rate of return that represents a gain or loss generated during the market down periods. The return for the market for each quarter is considered a down market quarter if it is less than zero. Using those down quarters, the returns for the manager for all down quarters are linked and annualized to get this number. Please note that just because the market performance is down does not mean that the performance of the manager is down as well. Growth Equity: Equities that exhibit higher capital appreciation and earnings growth characteristics than the broad market. The issuing companies tend to have high earnings reinvestment rates and therefore, pay out little dividend. Growth stocks yp typically have high price-to-book ratios, high price-to-earnings ratios, high earnings growth rates, and low dividend yield. Market Capitalization: The product of the stock’s price per share by its number of shares outstanding. Price-to-Book Ratio: The ratio of current market price to the company’s latest reported book price per share. Price-to-Earnings Ratio: This ratio is the market price divided by the trailing twelve months’ earnings per share (EPS). Rate of Return: It is a tool for indicating and measuring performance, including appreciation (or depreciation), realized capital gains (or losses), and income. Indices are computed and then forward-linked to calculate a rate of return for the period under study for any type of weighting, i.e. time weighted, dollar weighted, etc. Returns can be calculated for any time period with a quarterly multiple factor. Most recent quarter represents three fiscal months. Standard Deviation: A measure of dispersion about an average in applied statistics. It is a good measure of the historical variability of the return earned by an investment manager. The assumption is the greater variability in the rate of return connotes greater risk undertaken in achieving the return. For example, one would prefer a portfolio that earns 5% each period to one that alternates between a return of zero in one period and 10% the next. A general rule is that, for any given rate of return, the lower the standard deviation the better; similarly, for any given standard deviation, the manager who provides the highest rate of return is best. Up Market Capture Return: A measure of the manager’s performance in up markets relative to the market itself. This is an annualized semi-variance rate of return that represents a gain or loss generated during the market up periods. The return for the market for each quarter is considered an up market quarter if it is greater than zero. Using those up quarters, the returns for the manager for all up quarters are linked and annualized to get this number. Please note that just because the market performance is up does not mean that the performance of the manager is up as well. Value Equity: Equities that are perceived to be undervalued relative to the broad market, and therefore have potential for capital appreciation in the future. Value equities are usually purchased when their price-to-book and price-to-earnings ratios are low; they tend to pay out earnings in dividends, therefore their dividend yield is higher than the market. 40

City of Dover Domestic Large Cap Value q Equity Manager Search February 2012 DATA Š KNOWLEDGE Š WISDOM Š RESULTS 300 South High Street Ph: (610) 719-0300 West Chester, PA 19382 Fax: (610) 719-8345 Offices in: Pittsburgh, PA & Wilmington, DE www.Peircepark.com

Summary The purpose of this p report is to assist the City of Dover’s Retirement Board in selecting a domestic large cap value fund for inclusion in the City’s Employee and Police Retirement Plans. Firms discussed in this report emerged from the research and analysis performed by Peirce Park Group. The list of 4 managers shown below were selected for consideration by Peirce Park Group from the firms that emerged from the screening and analysis. Capital Research and Management Co. BlackRock American Funds Washington Mutual R6 Equity Dividend Institutional RWMGX MADVX T. Rowe Price The Vanguard Group Equity-Income Equity-Income Adm. PRFDX VEIRX 1

History and Organization Measures Employee Yr. Established AUM (in $US B) Firm Name Ownership (%) Additional Information Firm Strategy Firm Strategy Firm American Funds 1931 1952 937 46 100 One of the firm’s oldest strategies. BlackRock is a publicly-traded company. The largest asset BlackRock 1988 1988 3,513 21 4 management firm in the world. T. Rowe Price 1937 1985 490 33 15-20% T. Rowe Price is a publicly-traded company. Shareholders in Vanguard Funds own the Vanguard Group, Vanguard 1975 1988 1,735 7 - which in turn owns Vanguard. Wellington Management Company subadvises this strategy. 2

Investment Team # of Portfolio Avg. Years Experience Portfolio Managers Managers Total Firm Strategy Allen Berro, James Dunton, Gregory Johnson, American Funds 7 Jeffery Lager, Ronald Morrow, James 33 28 12 Rothenberg, Eugene Stein Robert Shearer, Kathleen Anderson, David BlackRock 3 21 11 7 Cassese T. Rowe Price 1 Brian Rogers 32 29 26 Wellington: W. Michael Reckmeyer, Ian Link, 4 31 17 10 John Ryan, Karen Grimes Vanguard* Vanguard: James Troyer, James Stetler, Michael 3 19 21 3 Roach *Please note: Wellington Management Co. acts as subadvisor to the fund. Wellington manages approximately 65% of the fund’s assets. Vanguard’s Quantitative Equity Group manages the balance of the fund’s assets. 3

Portfolio Style and Construction Investment Screening Typical # of % of Portfolio in Style Emphasis Typical Turnover Approach Approach Holdings Top 10 Holdings American Funds Fundamental Bottom-Up Value/Income 100-125 20-25% 34.0% BlackRock Fundamental Bottom-Up Value/Dividends 80-120 5-10% 25.1% T. Rowe Price Fundamental Bottom-Up Value/Earnings 115-125 15-30% 23.0% Fundamental/ Vanguard Bottom-Up Value/Income 150 25-50% 31.6% Quantitative 4

Portfolio Style and Construction Market Capitalizations Russell Indexes Style Map 10 Years American Funds Top Value Top Growth 1 Small - Large Mid Value Mid Growth BlackRock 0 -1 Sm Value Sm Growth T. Rowe Price -1 0 1 Value - Growth Russell Indexes Style Map 5 Years Top Value Top Growth Vanguard 1 Small - Large Mid Value Mid Growth 0 MSCI US Prime Market Value -1 Sm Value Sm Growth -1 0 1 0 10 20 30 40 50 60 70 80 90 100 Value - Growth Capitalization, % American Funds BlackRock T. Rowe Price Vanguard Giant Large Mid Small Micro MSCI US Prime Market Value 5

Investment Philosophy Summary • Focuses on identifying the difference between the underlying value of a company and the market price of its security. • Attempts to identify the present discounted value of a company’s future earning power. American Funds • Seeks to provide income and provide opportunity for growth. Strict investment criteria – may not invest in companies that derive their primary revenues from alcohol or tobacco. • Focuses on offering a stable foundation of assets that protect in down markets and provide an opportunity for capital appreciation. BlackRock • Emphasizes total return and dividend-paying securities. • Believes that a constant revenue stream, inherit in dividend paying securities, acts as a buffer against market volatility and offers downside protection. • Seeks attractively priced stocks with promising financial outlooks. • F d undamentally-driven, b li t elieve investor perceptions are i t nterpreted differently by th other investors, ft often creating T. Rowe Price attractive opportunities for long-term investors. • Believes active management can exploit mispricings. • Seeks attractively priced stocks with above average dividend yields. • Focuses on companies that are likely to provide a growing stream of earnings and dividends. Vanguard • Wellington manages 65% of portfolio using fundamental, bottom-up research approach. Vanguard manages the portfolio using a quantitative overlay/enhanced indexing process. y/ Notes provided to us by the managers. For more detail on the research and portfolio construction process, please refer to the Supplemental Research Section. 6

Fund Information Expense P/E Weighted. Median Morningstar 12 mo Yield Name Ticker Ratio (12 mo P/B Avg. Mkt. Cap Rating (%) (%) Trailing) Mkt. Cap ($B) ($B) American Funds  RWMGX 0.31 11.1 1.9 2.7% 87.5 30.7 BlackRock  MADVX 0.76 13.5 1.9 2.1% 76.5 24.6 T. Rowe Price  PRFDX 0.69 12.5 1.6 2.0% 61.2 14.8 Vanguard  VEIRX 0.22 11.9 1.9 2.9% 74.1 59.0 MSCI U.S. Prime Market Value - - 11.3 1.4 2.7% 75.9 49.0 7

Sector Allocations American Funds BlackRock T. Rowe Price Vanguard MSCI US Prime Market Value 100 95 90 85 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0 Utilties Financials Energy Technology Real Estate Industrials Health Care Consumer Defensive Consumer Cyclical Telecommunication Materials 8

Performance

Consecutive Returns 40.0 30.0 20.0 Total Annualized Return, % 10.0 0.0 -10.0 -20.0 -30.0 -40.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 American Funds -14.8 25.8 9.9 3.5 18.0 4.0 -33.1 19.2 13.7 7.4 BlackRock -11.3 26.2 15.2 12.6 19.2 14.8 -32.6 22.2 13.3 5.9 T. Rowe Price -13.0 25.8 15.1 4.3 19.1 3.3 -35.8 25.6 15.2 10.7 Vanguard -15.6 25.2 13.7 4.5 20.8 5.0 -30.9 17.3 15.0 10.7 MSCI U.S. Prime Market Value -16.9 29.7 15.4 7.3 22.4 0.2 -36.0 16.5 14.5 1.2 10

Cumulative Returns – 10 Years through December 31, 2011 16.0 14.0 12.0 10.0 Total Annualized Return, % 8.0 6.0 4.0 2.0 0.0 -2.0 -4.0 1 Year 3 Years 5 Years 7 Years 10 Years American Funds 7.4 13.3 0.2 3.1 3.8 BlackRock 5.9 13.6 2.6 6.2 7.0 T. Rowe Price -0.7 12.8 -1.0 2.4 4.1 Vanguard 10.7 14.3 1.6 4.6 5.1 MSCI U.S. Prime Market Value 1.2 11.5 -2.3 2.2 3.8 11

Up/Down Market Consistency Up Mkt Avg. Down Mkt Avg. Best 1 Year Worst 1 Year Return, % Return, % Return, % Return, % American Funds 6.0 (7.7) 42.9 (36.9) BlackRock 6.4 (6.4) 42.1 (35.4) T. Rowe Price 6.7 (8.8) 58.1 (40.8) Vanguard 6.4 (7.6) 45.5 (37.0) MSCI U.S. Prime Market 6.8 (9.1) 51.9 (41.2) All data quarterly, 10 Years through December 31, 2011 Capture Ratios Batting Averages Jan-02 - Dec-11 Jan-02 - Dec-11 120 1.0 115 0.9 110 0.8 105 0.7 Up Mkt Capture Ratio, % Up Mkt Batting Average 100 0.6 95 0.5 90 0.4 85 0.3 80 75 0.2 70 0.1 65 0.0 65 70 75 80 85 90 95 100 105 110 115 120 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1.0 Down Mkt Capture Ratio, % Down Mkt Batting Average American Funds BlackRock T. Rowe Price Vanguard MSCI US Prime Market Value 12

Return and Risk Annualized Annualized Tracking Alpha, % Beta R-Squared, % Sharpe Ratio Return, % StdDev, % Error, % American Funds 3.8 16.9 0.3 0.87 97.2 0.11 3.7 BlackRock 7.0 16.2 3.6 0.81 91.3 0.31 6.0 T. Rowe Price 4.1 19.1 0.3 0.99 98.7 0.11 2.2 Vanguard 5.1 17.3 1.5 0.90 98.0 0.18 3.1 Russell 2000 Growth Index 3.8 19.1 0.0 1.00 100.0 0.10 0.0 All data quarterly, 10 Years through December 31, 2011 Distribution of Quarterly Returns in Excess of MSCI US Prime Market Value Jan-02 - Dec-11 35 30 25 Frequency, % 20 15 10 5 0 -6.00 -5.00 -4.00 -3.00 -2.00 -1.00 0.00 1.00 2.00 3.00 4.00 5.00 6.00 -6.00 7.00 -5.00 -4.00 -3.00 -2.00 -1.00 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 -6.00 -5.00 -4.00 -3.00 -2.00 -1.00 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 -6.00 -5.00 -4.00 -3.00 -2.00 -1.00 0.00 1.00 2.00 3.00 4.00 5.00 6.00 7.00 Excess Return, % American Funds BlackRock T. Rowe Price Vn anguard 13

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Supplemental Research (notes provided by managers)

American Funds RESEARCH & SCREENING PROCESS: Most ideas arise from the efforts of investment analysts who p specialize in understanding businesses and companies within their areas of p responsibility. The firm focuses on fundamentals and places great emphasis on the insights gained from on-the-ground, in-person research. Accordingly, analysts conduct thousands of company meetings each year where they assess the quality of management and evaluate their fundamental business prospects. Additional resources available to an equity analyst include coordination with Capital's fixed-income and macro- economic investment professionals. The process includes a review of a company's financial strength as well as an assessment of appropriate valuation for its securities. Analysts then share their insights and make recommendations that are discussed among smaller groups of portfolio counselors and other investment analysts. Out of h l these discussions, i di ndividual portfolio counselors and analysts make i d l ndependent investment decisions. PORTFOLIO CONSTRUCTION & RISK CONTROL METHODOLOGY: Portfolios are constructed from the bottom-up, company-by-company and security-by-security, based on an intensive fundamental research effort. Within the multiple portfolio counselor system, final decision-making authority resides with each individual portfolio counselor and investment analyst. The system enables individual portfolio counselors and investment analysts to act on their highest convictions so long as their decisions are consistent with fund objectives and guidelines. There is no formal security rating system that indicates a collective investment opinion for a security, or one that determines buy or sell activity in the funds. Investment oversight oversees the entire process, ensures that adequate communication occurs and that proper procedures are followed. There is also a system that monitors recent activity in securities to ensure appropriate communication among the investment professionals occurs and to facilitate coordination if needed. The funds portfolio counselors believe that the calculation of the volatility of portfolio issues is only one way to measure risk. They make judgments based on experience relative to the possible market price risk, as well as the company risk of not living up to expectations. On the portfolio level, they believe that a value-oriented, fundamental approach is the best way to minimize risk. For example, a stocks P/E ratio and historical price volatility are carefully considered in any investment decision, as well as earnings risk, caliber of management, and quality of accounting, among other factors. In addition, each portfolio counselor evaluates the risk within their standard investment analysis and selection process. The portfolio counselors do not l calculate most standard irisk measurements (e.g., Sharpe ratio or l alpha) on h their funds, h though h they do l calculate both standard deviation and results analysis. The firm’s risk control systems are proprietary; however, in addition to board-level control, risk control is performed constantly by the investment control department. This group, a separate department from both trading and portfolio management, monitors all transactions within a fund prior to trade execution to verify the appropriateness of a trade and compliance with fund guidelines. 16

BlackRock RESEARCH & SCREENING PROCESS: The team's decision-making process is centered on bottom-up research and analysis of companies, industries and sectors. For individual p companies, p the team looks for stocks with market capitalizations greater than $1 billion that have conservative balance sheets (debt-to-cap < 50%), a history of dividend payments, and a strong management team that employs a consistent strategy. The team also looks at the company's historic price-earnings ratio range, preferring those that are trading at the lower end of their range and peer group. Ideally, the team's research will result in company valuations moving toward the mean of the peer group or at the higher end of the stock’s historic valuation range. The team also examines the cash flow generation of the company to ensure that financing, capital spending and dividend payments are fully covered. Another important aspect to the research process is meetings i with company management. These l i relationships d i rive h the team's i opinion of each company and f often provide important insight into industry trends. For the team's industry/sector research, they seek those that are coming into tight capacity utilization. This typically results in pricing power, which tends to lead to favorable earnings and ultimately rising dividends. The team then looks for industries/sectors that have the best leverage to these pricing trends, highlighting those that have lower cost production which can lead to better margins. The team then compares Wall Street’s consensus earnings and forward looking price-earning ratios to see if valuations have already discounted BlackRock’s macro- identified trends or whether the team believes that further upside estimate revisions and P/E expansion are possible. The team believes this bottom-up consideration of companies, industries and valuations is a primary source of the Fund’s downside protection and preservation of capital, which in turn has enabled the consistency of the product's long-term returns. PORTFOLIO CONSTRUCTION & RISK CONTROL METHODOLOGY: After completing a thorough fundamental analysis of companies, industries and sectors, the team builds a portfolio of 80 to 120 names. The strategy is likely to maintain a higher allocation to higher yielding sectors including utilities, financials and energy. Dividend paying companies make up at least 80% of the assets with the portfolio allowed to invest 25% in foreign securities. There is no constraint on individual position size, although the team’s typical position is between 50 and 350 basis points. The team has the ability to hedge currency exposure. 17

T. Rowe Price RESEARCH & SCREENING PROCESS: T. Rowe Price ppapplies a defined investment process in the management of the g Large-Cap q g Equity Income Strategy. In-depth, p p roprietary research drives bottom-up stock selection and forms the foundation for strong risk control. An experienced, tenured portfolio manager builds a diversified portfolio, consistently applying their buy and sell disciplines in all market environments. A long-term orientation helps them fully exploit valuation anomalies they identify among large-cap stocks. These distinctive elements of their approach have been instrumental in producing superior long- term risk-adjusted returns. A detailed description of their portfolio management process follows. • Identify Investment Candidates – The portfolio manager screens h their i universe of stocks for companies i with earnings and inexpensive di id vidend streams. The purpose of this screen is to help identify potential valuation anomalies. The screen rates each stock on each of three measures: P/E relative to the P/E of the S&P 500, dividend yield relative to the dividend yield of the S&P 500, and the ratio of enterprise value to sales. • Integrate Fundamental Research – In-house research analysts subject investment candidates to rigorous fundamental analysis to validate or refute the apparent investment anomaly. This research attempts to identify companies possessing an improving financial outlook and the potential for improved investor perception. T. Rowe Price believes proprietary, fundamental research is the key driver of value-added active management. Analysts generate more than 90% percent of their information. • Verify Value Opportunities – The portfolio manager performs quantitative analysis to confirm the valuation anomalies of attractive companies. This is a further, deeper examination of relevant valuation metrics, including P/E, price/sales ratio, price/cash flow ratio, and absolute and relative dividend yield. Analysis is relative to a company’s history, its industry, and/or the market as a whole. PORTFOLIO CONSTRUCTION & RISK CONTROL METHODOLOGY: T. Rowe Price constructs the portfolio from the bottom up, one stock at a time. While they consider a security’s weighting in the fund relative to the benchmark, weightings of individual stocks are driven by company-specific fundamental analysis and their goal of maintaining broad diversification. I di ndividual position i i sizes average from 1% to 2% of total assets and generally range from 0.75% to 3%. For purposes of di versification and i ifi risk control, they will not purchase a security if, as a result, with respect to 75% of the fund’s total assets, more than 5% of its total assets would be invested in securities of a single issuer. Sector and industry weightings are a residual of their bottom-up stock selection process. In some instances, they may have a macro view that modestly influences sector and industry weightings, but that is a qualitative, not quantitative, judgment. The portfolio’s sector weightings typically vary from 0.5x – 2.0x the S&P 500 Index weightings. For diversification and risk control, they generally do not invest more than 25% of the fund’s assets in any one sector or more than 20% of assets in any one industry. . 18

Wellington/Vanguard RESEARCH & SCREENING PROCESS: As pexperienced investors with pp support from a large central research team, the Value q Equity Income Team does not find it necessary to rely on standard valuation screens to narrow the investment universe. The Team primarily evaluates large cap companies ( >US$2 billion) with below- average valuation ratios and depressed stock prices. Investment opportunities are primarily found through a focus on factors that can lead to discounted share valuations. The Team refers to these factors as areas of opportunity. The following four areas of opportunity are common examples that can lead to new ideas for the Portfolio: - i d misunderstood negative event - new or improving management - consolidating industry structures - low but improving return on capital Companies identified within these various areas of opportunity are then further evaluated. The Value Equity Income Team scrutinizes financial statements looking for hidden values, and particularly, signs of an inflection point in profits. This refining stage clearly involves an important element of professional judgment and experience. Detailed earnings forecast models on each company are maintained and updated frequently. The analysts and portfolio managers add value to the basic framework by looking behind the results for nonrecurring factors. This differentiates the Teams model projections from simple extrapolations. PORTFOLIO CONSTRUCTION & RISK CONTROL METHODOLOGY: Portfolio construction is driven primarily by security selection; market timing is not employed, and secondary consideration is given to macroeconomic analysis in establishing sector and industry weightings. The team’s bottom-up process may, however, lead to contrarian industry concentrations. Rlelative to h the market, h the Portfolio is expected to have a combination of a higher di id bi vidend i yield, a b l elow-average i / price/earnings ratio, and a market- like earnings growth rate. The Portfolio typically limits exposure to a single stock to 7% at market. Sector weights are generally limited to 10% relative to the Russell 1000 Value Index. The Portfolio is generally fully invested; the normal cash level is below 5% and the maximum is 10%. 19

Definitions • Alpha - Alpha measures the difference between an investment's actual performance, and its expected performance as indicated by the returns of a selected market index. A positive Alpha indicates the risk- adjusted performance is above that index. In calculating Alpha, Standard Deviation (total risk) is used as risk measure. Alpha is often used to judge the value added or subtracted by a manager. • Batting Average - Batting Average is sometimes known as the probability of success. This measures the frequency with which a manager performs better than a selected Market Index. It is computed by dividing the number of positive excess returns by the total number of excess returns during the period. • Beta - Beta is defined as a Manager's sensitivity to market movements and is used to evaluate market related, or systematic risk. Beta is a measure of the linear relationship, over time, of the Manager's returns and those of the Benchmark. Beta is computed by regressing the Manager's excess returns over the risk free rate (cash proxy) against the excess returns of the Benchmark over the risk free rate. An investment that is as equally volatile as the market will have a Beta of 1.0; an investment half as volatile as the market will have a Beta of 0.5; and so on. Thus, Betas higher than 1.0 indicate that the fund is more volatile than the market. • Distribution of Excess Returns - Distribution of Excess Returns displays an arrangement of statistical data that exhibits the frequency of occurrence of the investment's returns in excess of the selected Market Index. • Down Market (Mkt) Capture Ratio - Down Market Capture Ratio is a measure of an investment's performance in down markets relative to the market itself. A down market is one in which the market's return is less than zero. The lower the investment's Down Market Capture Ratio, the better the investment protected capital during a market decline. A negative Down Market Capture Ratio indicates that an investment's returns rose while the market declined. • GARP – Growth at a reasonable price – combines both growth and value tenets of investing. • R-Squared (R²) - The diversification measure R² indicates the percentage of volatility in portfolio returns which can be “explained” by market volatility. This statistic indicates the degree to which the observed values of one variable, such as the returns of a managed portfolio, can be explained by, or are associated with the values of another variable, such as a Market Index. It is especially helpful in assessing how likely it is that Alpha and Beta are statistically significant. The R² values generally range from 0.0 to 1.0. An investment with an R² of 1.0 is perfectly correlated with the market whereas an investment with an R² of 0.0 will behave independently of the market. An R² of 0.95, for example, implies that 95% of the fluctuations in a portfolio are explained by fluctuations in the market. • Russell 2000 Growth Index – Contains those Russell 2000 securities with a greater-than-average growth orientation. Securities in this index tend to exhibit higher price-to-book and price-earnings ratios, lower di id vidend i yields and higher forecasted growth l values h than securities in h the l value i universe. • Sector Allocations - The percentage a manager has allocated to specific economic sectors. • Sharpe Ratio - The Sharpe Ratio indicates the excess return per unit of total risk as measured by Standard Deviation. It is a ratio of the arithmetic average of excess returns over the risk free rate to the Standard Deviation. The Sharpe Ratio is a measure of the premium earned for the risk incurred by the portfolio. • Standard Deviation (StdDev) - A measure of the extent to which observations in a series vary from the arithmetic mean of the series. The Standard Deviation of a series of asset returns is a measure of volatility or risk of the asset. • Style Map - Plots the historical exposures of a fund's style across appropriate dimensions, such as growth vs. value for equity funds and credit quality for fixed income funds. By viewing this chart, an investor can determine a manager's style consistency over. • Tracking Error (Excess Standard Deviation) - Tracking Error is a measure of how closely an investment's returns track the returns of the selected Market Index. It is the annualized Standard Deviation of the differences between the investment's and the associated index's returns. If an investment tracks its associated index closely, then Tracking Error will be low. If an investment tracks its associated index perfectly, then Tracking Error will be zero. • Up Market (Mkt) Capture Ratio - Up Market Capture Ratio is a measure of a product's performance in up markets relative to the market itself. An up market is one in which the market's return is greater than or equal to zero. The higher the investment's Up Market Capture Ratio, the better the investment capitalized on a rising market. • YTD - Year to Date. 20