Attachment

POLICE PENSION BOARD AGENDA NOVEMBER 14, 2013 - 10:00 A.M. CITY HALL CONFERENCE ROOM 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. Approval of Minutes - Police Pension Board Meeting of August 8, 2013 2. Quarterly Performance Review (Quarter Ending September 30, 2013) (Milliman, Inc.) (Staff Recommends Acceptance of the Report) 3. Adjournment by 10:50 a.m. 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. /js S:\AGENDAS-MINUTES-PACKETS\Misc-Agendas\PENSION BOARDS\2013\11-14-2013 POLICE PENSION BOARD AGENDA.wpd 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.

POLICE PENSION BOARD The Police Pension Board meeting was held on August 8, 2013 at 1:05 p.m. with Chairman Mullaney presiding. Members present were Mr. Bonar, Mr. Stallings, and Mr. Koenig. Mr. Lynn, Mr. Unterkofler, and Chief Hosfelt were absent. AGENDA ADDITIONS/DELETIONS By unanimous consent, the agenda was adopted as presented. Adoption of Minutes - Police Pension Board Meeting of May 9, 2013 Mr. Bonar moved for adoption of the minutes of the Police Pension Board meeting of May 9, 2013, seconded by Mr. Stallings and unanimously carried. Organizational Issues - Election of Chair Mr. Mullaney opened the floor for nominations for Chair of the Police Pension Board. Mr. Bonar moved to nominate Mr. Mullaney to serve as Chair, seconded by Mr. Koenig. Mr. Bonar moved to close nominations, seconded by Mr. Koenig and unanimously carried. The motion to elect Mr. Mullaney as Chair of the Police Pension Board was unanimously carried. Quarterly Performance Review (Quarter Ending June 30, 2013) (Milliman, Inc.) Mr. Jeff Marzinsky, Principal and Employee Benefits Consultant, Milliman, Inc., reviewed Item #1 of the Investment Committee Meeting Notes - 8/8/2013 Memo included with the Quarterly Investment Monitor Summary Report for the Quarter Ending June 30, 2013. He noted that plan assets as of the end of June were approximately $11M, which was a slight decrease for the quarter. He indicated that a contribution of approximately $767,000 was made. The plan had a return of approximately -2.19% net for the period and performed close to the benchmark. Mr. Marzinsky stated that the plan was dragged down by fixed income investments due to a spike in interest rates at the end of the quarter. He explained that fixed income funds across the board had negative returns during this period and international emerging market investments did not perform well. He stated that because a contribution occurred at the end of the quarter, Wells Fargo was working on rebalancing the assets, noting that this is performed whenever a contribution is added, and for this reason the allocation was slightly off from the target. He advised members that funds were rebalanced after the end of the quarter and were now in line with the target allocation. Mr. Marzinsky stated that there were no recommendations for changes in the investment managers at this time. Investment Manager Recommendations Mr. Marzinsky reviewed Item #2 of the Investment Committee Meeting Notes - 8/8/2013 Memo included with the Quarterly Investment Monitor Summary Report for the Quarter Ending June 30, 2013 and advised members of potential future concerns in regard to longer duration fixed income and emerging market investments. He noted the possibility of a spike in interest rates, which could

POLICE PENSION BOARD MEETING OF AUGUST 8, 2013 PAGE 2 result in negative returns on bonds, especially bonds with a longer duration. He suggested that some of the Fund’s long duration bonds be reallocated into other asset categories, including high-yield bonds with a shorter duration and less than high credit quality, and that some of the funds from emerging markets be reallocated among other equity categories. Referring to the Portfolio Options chart, Mr. Marzinsky reviewed the recommended adjustments in the Customized Alternative Portfolio column, which reflected the 40% funded status indicated in Amendment II to the Investment Policy for the City of Dover Police Pension Board. He explained that long-term bonds would be reduced from the present allocation of approximately 17% of the portfolio and reallocated among fixed-income investments. Emerging market investments would also be reduced from approximately 15% and reallocated among the equity allocations. He advised members that the plan would remain at 60% equity and 40% fixed income. This would increase the expected return from 6.49% to approximately 6.62%, which would be closer to the 7.0%-7.5% target return for the actuarial valuation of the portfolio without significantly increasing the volatility. Referring to Item # 3 of the Investment Committee Meeting Notes - 8/8/2013 Memo, Mr. Marzinsky stated that Milliman’s additional recommendations were to add high-yield bonds to the portfolio and to select Ivy High Income I as the high-yield bond manager. He noted that this fund had the best return and rank in its category with the lowest risk over three (3) and five (5) year periods. Mr. Bonar moved to accept the asset allocations, as recommended by Mr. Marzinsky and reflected in Amendment II to the Investment Policy Statement for the City of Dover Police Pension Board, seconded by Mr. Stallings and unanimously carried. Mr. Koenig moved to introduce high-yield bonds into the Police Pension Fund portfolio, as reflected in Amendment II to the Investment Policy Statement for the City of Dover Police Pension Board, seconded by Mr. Stallings and unanimously carried. By unanimous consent, Amendment II to the Investment Policy Statement for the City of Dover Police Pension Board was adopted as submitted. Mr. Bonar moved to select Ivy High Income I as the high-yield fund manager, seconded by Mr. Stallings and unanimously carried. Mrs. Mitchell suggested that a statement be added to the City of Dover Investment Policy for the City of Dover Police Pension Board that the Policy would be reviewed with the Fund’s Investment Manager at least once every year by the Board of Trustees. Mr. Marzinsky stated that typically recommendations for changing allocations would be done annually and recommendations would be made to the Board and he felt that adjustments once per year were appropriate. Mr. Bonar moved to amend the Investment Policy for the City of Dover Police Pension Board to include a statement that the Police Pension Board Trust Fund Investment Policy will be adopted by the Board of Trustees. The policy will be reviewed with the Investment Manager at least once every year by the Board of Trustees, which is charged with considering the

POLICE PENSION BOARD MEETING OF AUGUST 8, 2013 PAGE 3 existing policy and any recommendations to modify the policy. The motion was seconded by Mr. Stallings and carried unanimously. (City Clerk’s Office Note: Subsequent to the meeting, the Investment Policy for the City of Dover Police Pension Board was revised to include this statement as well as Amendment II (Attachment #1). Scheduling of Future Meeting Dates Mr. Stallings moved to tentatively schedule meetings for the Police Pension Board on November 14, 2013; February 13, 2014; May 8, 2014; and August 14, 2014 at 10:00 a.m. The motion was seconded by Mr. Bonar and unanimously carried. Mr. Bonar moved for adjournment, seconded by Mr. Stallings and unanimously carried. Meeting adjourned at 1:23 p.m. Timothy Mullaney Chair TM/JS/dd/tm S:\AGENDAS-MINUTES-PACKETS\Misc-Minutes\PENSION\2013\08-08-2013 Police Pension.wpd Attachment Attachment #1 - Investment Policy for the City of Dover Police Pension Board, as amended

ATTACHMENT #1 Police Pension Board Meeting of 08/08/2013 INVESTMENT POLICY CITY OF DOVER POLICE PENSION BOARD August 8, 2013

TABLE OF CONTENTS INTRODUCTION .........................................................................................................................................................3 PURPOSES OF THE STATEMENT .......................................................................................................................3 PLAN DESCRIPTION .............................................................................................................................................3 PORTFOLIO MANAGEMENT PRECEPTS ..........................................................................................................3 PRUDENCE IN INVESTMENT..............................................................................................................................4 RESPONSIBILITIES OF THE BOARD AND STAFF ...........................................................................................4 RESPONSIBILITIES OF THE INVESTMENT MANAGER(S) ............................................................................5 RESPONSIBILITIES OF THE PLAN CUSTODIAN(S) ........................................................................................6 INVESTMENT OBJECTIVES .....................................................................................................................................6 INVESTMENT POLICY ..............................................................................................................................................8 ASSET ALLOCATION ...........................................................................................................................................8 ALLOCATION MONITORING/REBALANCING ................................................................................................9 LIQUIDITY ..............................................................................................................................................................9 PROXY VOTING ....................................................................................................................................................9 DIVERSIFICATION ................................................................................................................................................9 MUTUAL FUNDS .................................................................................................................................................10 INVESTMENT GUIDELINES ...................................................................................................................................10 GENERAL GUIDELINES .....................................................................................................................................10 DOMESTIC EQUITY INVESTMENT GUIDELINES ......................................................................................... 11 Specific Guidelines, Domestic Equity ....................................................................................................................11 INTERNATIONAL EQUITY INVESTMENT GUIDELINES .............................................................................12 Specific Guidelines, International Equity ...............................................................................................................12 DOMESTIC FIXED INCOME INVESTMENT GUIDELINES ...........................................................................13 Specific Guidelines, Fixed Income .........................................................................................................................13 REVIEW PROCEDURES...........................................................................................................................................15 SIGNATURES ............................................................................................................................................................16 AMENDMENT I .........................................................................................................................................................18 AMENDMENT II .......................................................................................................................................................20 2

City of Dover Police Pension Board Investment Policy Statement Pension Plan INTRODUCTION PURPOSES OF THE STATEMENT Based upon and in keeping with requirements of City of Dover officials and Police Pension Plan participants serving as members of the Police Pension Board of the City of Dover (“Board”) under Section 2-202 of the City of Dover Code of Ordinances, this Investment Policy Statement (“Statement”) presents investment objectives, policies, guidelines, and monitoring and review procedures relating to financial assets (the “Fund”) of the City of Dover Police Pension Plan (“Plan”). The Statement’s purposes are to: 1. Present appropriate goals and objectives relating to investment management of the Fund. 2. Recognize and/or specify diversification and liquidity requirements and identify any legal constraints affecting investment management of the Fund. 3. Promulgate guidelines, consistent with any Board-selected investment time horizon(s), investment management classifications, and/or investment management styles, to which any Board-appointed Investment Manager (IM) shall adhere when determining investment strategies, making periodic investment decisions, and/or undertaking specific investment transactions relating to the Fund. 4. Establish standards and procedures for monitoring, measuring, reviewing, and absolutely and comparatively evaluating IM investment performance, along with similar standards and procedures for assuring conformity with investment policies, goals, objectives, guidelines, and/or constraints. 5. Foster understanding and effective communications between the Board and Staff and any persons appointed, employed, designated or in any way called upon by the Board or Staff to serve the Plan and its participants and/or beneficiaries. PLAN DESCRIPTION The Plan is a public employee retirement plan governed by the City of Dover Code of Ordinances as cited within “Purposes of the Statement,” above. PORTFOLIO MANAGEMENT PRECEPTS The Board endorses contemporary investment practices, based upon the construction of well diversified multi-asset portfolios, which facilitate control of investment risk and afford reasonably predictable long-term investment returns, primarily by IM selection which maintain distinct investment practices or “styles” within any asset class. The monitoring and appropriate investment performance measurement respecting such styles requires relative comparisons 3

among peers and to chosen (usually index) benchmarks as well as absolute measures respecting the financial progress of the Plan itself. PRUDENCE IN INVESTMENT Applicable terms, conditions, limitations and restrictions of applicable law upon Delaware fiduciaries notwithstanding, any IM serving the Fund shall discharge any duties relating to the Fund solely in the interest of Plan participants and beneficiaries, shall demonstrate appropriate knowledge of the Plan’s purpose and contemporary operations, and shall diversify the investments of any Fund investment portfolio so as to minimize the risk of substantial loss. When contemplating any investment, investment strategy or investment program, any IM managing any part of the Fund shall consider all relevant factual and circumstantial information and the impact of such information on a particular investment, strategy, or program, and on the Total Fund. Further, respecting investment strategies, programs and/or specific investment actions for the Fund, any IM shall also consider: 1. potential losses and gains, 2. the composition of any IM-assigned portfolio, and the Total Fund, with regard to a. diversification b. liquidity and current return relative to the Fund’s cash flow requirements c. projected total return relative to the Plan's funding objectives Guidelines respecting Prudence have been developed in light of investment objectives related solely to the Plan’s varied and dynamic obligations to its participants and beneficiaries. Actuarial, economic, investment, and even socio-political events and trends are fluid factors affecting the funding of those obligations. Accordingly, these guidelines respecting Prudence are, as a part of this Statement, intended singularly to present broad and balanced considerations to guide incumbent and successor Board and Staff, and all other parties concerned, seeking appropriate allocation, investment, safekeeping, monitoring and evaluation of the Fund. RESPONSIBILITIES OF THE BOARD AND STAFF The Board is charged under Section 18-51 of the City of Dover Code of Ordinances with overall responsibility for investment of the Fund. To assist the Board in this function, it is authorized and permitted by said Ordinances to appoint an IM or IM(s), including for this purpose banks, insurance companies, and firms registered under the Investment Advisers Act of 1940 and/or Delaware State law, to manage (including the power to acquire and dispose of) Plan assets. Any appointed IM must agree to conduct itself in accordance with all applicable City of Dover Ordinances. The Board must also develop prudent management policies and guidelines intended to assure that the Plan will fulfill its objectives. Policies and guidelines are inclusive of, but not restricted to: 4

1. Establishment of investment objectives, investment policy, investment guidelines, and monitoring and review procedures. 2. Establishment of standards for measuring, monitoring, evaluating and comparing absolute and relative investment performance to assure that investment returns are reviewed on a regular basis and investment return objectives are met during acceptable periods of time. 3. Establishment of authorization, reporting, control, review and general governance procedures to assure that investment policies and guidelines are reviewed on a regular basis and conformed to at all times. All modifications of policies and/or guidelines shall be in writing, signed by all Board members, and delivered on a timely basis to any IM and/or Custodian affected by such changes. 4. Establishment of, through contractual relationships with recognized and carefully selected professional organizations, or by alternative means satisfactory to the Board, a retirement plan management structure which will assure appropriate investment management, custody, and surveillance or compliance procedures to meet investment objectives in conformity with the Board's stated investment policies and guidelines. 5. The City of Dover Police Pension Plan investment policy will be adopted by the Board of Trustees. The policy will be reviewed with the Investment Manager at least once every year by the Board of Trustees, which is charged with considering the existing policy and any recommendations to modify the policy. The Board shall examine this Statement from time to time and make appropriate revisions. At least annually the Board shall review the Statement entire and communicate any material changes to any persons affected by them. RESPONSIBILITIES OF THE INVESTMENT MANAGER(S) Fund management and responsibilities for investment decisions are delegated to any appointed IM. Any IM shall exercise complete discretion within the clear limits established by this Statement. Accordingly, the Board requires adherence to Delaware or other pertinent laws as now apply, or may apply in the future, with particular attention to the standards established by applicable rules of law. Fiduciary insurance, and officer liability and omissions and errors insurance coverages, of any IM, must meet standards set by the Board from time to time. If at any time a manager believes that this Investment Policy Statement inhibits its investment performance, it is the manager’s responsibility to communicate this view to the Pension Board. In addition, the manager will promptly (within 30 days) notify the Pension Board, in writing, regarding all material or significant matters that change pertaining to the investments of the retirement fund assets, including but not limited to:  changes in investment strategy portfolio structure, tactical approaches and market value of managed assets; 5

 changes in ownership organizational structure, financial condition, and/or professional staff of the investment firm; and  all material legal, SEC and other regulatory proceedings affecting the firm. RESPONSIBILITIES OF THE PLAN CUSTODIAN(S) Any Custodian appointed by the Board shall be responsible for safekeeping of the Fund, including all security transaction settlements and deliveries, and for comprehensive recordkeeping and reporting, which shall include any custom recordkeeping, record retention, or reporting reasonably required by the Board or Staff. Safety and continuity of operations shall be the primary objectives of any Custodian. Timely, accurate, and complete recordkeeping and reporting, arising from superior state-of-the-art information systems and committed staff, shall be the primary benchmarks for month-to-month evaluation of Custodian performance. Fund safekeeping and securities settlement procedures shall include direct Custodian participation in one or more appropriate securities depositories (e.g., Depository Trust Company, New York) and, as necessary, correspondent participation in other major depositories (e.g., the Federal Reserve System). The Plan's beneficial ownership of all assets shall be inviolate and in all circumstances perfected. Board or designated IM authority to direct all investment transactions shall similarly be protected. Ready access to information by the Board and Staff shall be a prime requisite of recordkeeping and reporting services, with no bar as to frequency of access, nor any delay greater than one day acceptable. Transaction records shall be maintained on a trade date basis and shall remain immediately available for at least two years. Nationally accepted asset pricing should be daily and reported not less often than monthly, and "non-trade" transaction records (e.g., stock splits, etc.) should be both available immediately and properly carried into monthly transaction and asset value reports. Fiduciary insurance, and officer liability and omissions and errors insurance coverages, of any Custodian, must meet standards set by the Board from time to time. INVESTMENT OBJECTIVES Investment Objectives for the Plan represent anticipated results and are long-term in nature. Given the Board assumptions respecting current and projected Plan and capital market conditions, the following Objectives have been delineated: 1. All Plan fiduciaries shall discharge their responsibilities and the Fund shall be invested in a manner consistent with [relevant law] and generally accepted fiduciary standards. Further: (1) all transactions undertaken on behalf of the Plan shall be solely in the interest of Plan participants and beneficiaries, and (2) with reference to Prudence in Investment, set forth earlier in this Statement, safeguards and diversification to which a prudent investor familiar with and managing the Fund of this Plan under known or foreseeable circumstances would 6

adhere, and liquidity and current return consistent with rationally anticipated cash flow requirements of the Fund, shall be governing factors in all investment considerations. 2. Consideration shall be given to suitable long-term investment intended to provide Fund capital and income growth which may be utilized to increase future benefits and thus maintain the purchasing power of Plan participants and their beneficiaries; the Board anticipates that such capital and income growth will be achieved during each economic and/or securities market cycle and/or within its selected three-to-five (3-5) year investment time horizon. 3. Consideration shall also be given, granting conformity with the objectives of 2., above, to providing adequate and timely cash flows to meet anticipated Plan benefit payments, with sufficient reserves to meet relatively smaller flows for unanticipated benefit payments; adequate emphasis, consistent with the foregoing, shall be placed upon current investment return; any Fund IM should expect to receive periodic projections of Fund liquidity requirements but, in the absence of such projections, shall be responsible for seeking necessary information from the Board or any party designated by the Board for this purpose. 4. While professional managers may strive to record positive rates of investment return during all measurement periods, securities markets are unlikely to provide a consistently favorable climate, on a shorter-term basis, for longer-term investments. Therefore, considering usual multi-year economic and/or investment cycles, and the three-to-five (3-5) year investment time horizon selected by the Board, requisite but not exclusive comparative or benchmark measures of investment return, and of risk or volatility, are delineated as follows: a. Commensurate with preserving participant and beneficiary purchasing power through the Plan, it is desired to achieve a positive real (post-inflation) rate of return during any multi-year period and over the life of the Plan. Based upon current and projected Plan and capital market conditions, and the extensive historical records provided by such sources as Ibbotson-Sinquefeld, the Board has set returns meeting or exceeding the Plan’s actuarial interest rate assumption at any time, annualized, as a gross multi-year return target. Concurrently, 3.5 percentage points above the CPI, or an annualized 3.5 percent real rate of return, is anticipated for the Total Fund. b. Consistent with anticipated real returns (above) and separate asset class returns (below), annualized Total Fund investment performance, for periods of three-to-five (3- 5) years or more, is expected to meet or exceed the Plan's assumed actuarial rate and to meet or exceed the annualized investment performance of a "policy index" comprised of a weighted average of relevant asset-class indexes matched with policy or "target" asset allocations in effect on average for the Fund during the period considered. c. Consistent with b., above, the Total Fund’s investment return volatility, as measured by the standard deviation of quarterly investment returns, is not expected to exceed the volatility of the policy index during any three-to-five (3-5) year measurement period. d. Also consistent with b., above, Total Fund domestic equity investment returns are expected to meet or exceed similar annualized returns of the Russell 3000 Stock Index during periods of three-to-five (3-5) years or more; equity investment returns of any 7

specific IM, annualized, are expected to meet or exceed returns of any index or benchmark cited in writing by the Board as appropriate to the investment process or "style" of any specific IM. e. Also consistent with b., above, Total Fund domestic fixed income investment returns, annualized, are expected to meet or exceed similar returns of the Lehman Brothers Intermediate Government/Credit Bond Index during periods of three-to-five (3-5) years or more; as in d., above, any index or benchmark may be chosen by the Board as appropriate to the investment process, "style", or time-horizon of any specific IM. f. All investment performance data submitted to the Board or its designees directly or indirectly by or on behalf of any IM shall as applicable be submitted in conformity with the North American Performance Presentation Standards and/or Global Investment Performance Standards promulgated by the Association for Investment Management and Research. 5. Investment performance objectives of the Fund are, as stated initially under Investment Objectives, above, long-term in nature. Concern respecting market value or Fund investment return volatility and other measures reflecting investment uncertainty will be addressed in part by functional constraints imposed by the Board through asset (class) allocations, investment management processes or "styles" chosen, portfolio diversification requirements, and other investment management guidelines and/or limitations. INVESTMENT POLICY Investment Policy delineates controls and the associated monitoring intended to enhance the likelihood of meeting Investment Objectives during acceptable periods of time. ASSET ALLOCATION Asset class allocation, resulting in so-called asset mix or investment ratios, is intended to afford an optimum approach toward Investment Objectives while limiting investment risk by assuring basic diversification. The variable percentages of asset classes delineated below provide a framework through which the Fund investments may be adjusted to meet economic and/or investment market conditions while remaining centered on the allocation target deemed most appropriate to the Fund's long-term Investment Objectives. 8

Asset Class Minimum % Target % Maximum% Benchmark Equities 60 65 70 Domestic 44 49 54 Russell 3000 International 11 16 21 MSCI EAFE (net) Fixed Income 30 35 40 Bonds 28 33 38 Barclays Intermediate Gov't/Credit Cash 0 2 5 ML 90 Day T-Bill ALLOCATION MONITORING/REBALANCING The Board shall review asset allocation quarterly to monitor Total Fund allocation targets. In the event that asset allocations because of cash flows or market value changes fall moderately outside the ranges in the tables above, any appointed Custodian may be notified and instructed by the Board to adjust contribution cash flows to any specific IM and thus return the Total Fund to appropriate asset allocation levels. Should an allowable range be breached substantially, i.e., by ten (10) percent of per-portfolio per-IM assets or five (5) percent of Total Fund Assets, any IM involved may be required by the Board to adjust assets immediately. The Board may set asset allocation ranges for any specific IM different from ranges for the Total Fund. LIQUIDITY Emphasis shall, per Investment Objectives, 3., above, be placed on providing adequate and timely Fund cash flow to permit benefit payments from the Plan when due. The Board endeavors to meet all of the Plan’s multiple objectives through asset allocation and constructive Investment Guidelines. Nevertheless, any IM appointed by the Board shall be responsible for seeking from the Board or its designee(s) current information respecting cash flow requirements and for assisting in meeting said requirements. PROXY VOTING While matters of public interest as well as corporate governance have long been a part of publicly owned corporations’ Annual Meetings and proxy voting activity in the United States, the Board continues to believe that the Fund’s proxy voting must be based upon the long-term economic value of the securities represented in each case and thus solely in the interests of Plan participants and their beneficiaries. The Board delegates timely and complete proxy voting to any IM to assure that the interests cited immediately above have been met. Delegation as stated precludes Board interference with or exercise of proxy voting, but does not preclude any IM request for and independent consideration of Board views officially determined and expressed. DIVERSIFICATION Total Fund investments must be diversified broadly to minimize the risk of substantial losses. The Board recognizes that significant diversification is accomplished through asset allocation 9

and the selection of investment management organizations. Nevertheless, the Investment Guidelines provided herewith include certain provisions intended to optimize investment diversification. MUTUAL & OTHER COMMINGLED FUNDS Given the nature of mutual and other commingled funds, it is recognized that there may be deviations between this Investment Policy Statement and the objectives of the mutual and other commingled fund(s). However, every effort shall be made to the extent practical or prudent and appropriate to select mutual and other commingled funds that have investment objectives and policies that are consistent with this Investment Policy. INVESTMENT GUIDELINES Investment Guidelines describe for any IM and for the information of any Custodian or interested person a wide range of permissible investment activities and choices while also delineating, specifically or by broader proscription, those which are not permissible. GENERAL GUIDELINES Subject to the asset allocation ranges set forth as a table within Investment Policy, above, or separate asset allocation ranges assigned specifically to any IM by the Board, any IM is expected to undertake flexible discretionary management of Fund assets. Nevertheless, when responsible for any investment portfolio, any IM shall report immediately to the Board or its designee(s) any shift between or change in market value of asset classes which equals or exceeds ten (10) percent of the market value of the assets assigned to the specific IM. For the purpose described herein, cash and money market or cash equivalent securities shall be considered an asset class. The Board has determined that certain investment practices, as well as certain types of investments, are not suitable for the Fund irrespective of circumstances: 1. Buying or (short) selling securities on margin, and/or the use of any other form of leverage, excepting the lending of securities if approved in writing by the Board. 2. Privately placed or otherwise unregistered securities excepting fixed income securities, issued under SEC Rule 144(a), which are demonstrably marketable and otherwise within guidelines. 3. Investment in commodities or in any type of commodities contracts, forward or futures trading activities, and all forms of portfolio hedging, excepting the limited use of stock options and/or currency hedges; (See Domestic Equity and International Equity Investment Guidelines, below.) 4. Fixed income investments may not include deep discount or zero coupon (excepting U.S. Treasury) securities, tax exempt, indirectly asset backed or spread-dependent, and stripped or otherwise derivative or synthetic securities. Certain exceptions are delineated below. 10

DOMESTIC EQUITY INVESTMENT GUIDELINES The Board shall review the Fund at least quarterly to assure that the domestic equity limit of 54 percent of Fund market value is not exceeded; as necessary, any Custodian will be instructed to redirect cash flows to or from any IM or to accommodate immediate Board-directed IM asset allocation revision to restore the Asset Allocation currently approved by the Board. Permissible equity investments shall include convertible securities, which shall be limited to ten (10) percent of Fund assets at market value, as well as American Depositary Receipts (ADRs), equally limited. Any IM retained for this mandate shall conform to the Domestic Equity Investment Guidelines set forth above and below. Any departure from the Guidelines must be submitted in writing to the Board for prior approval, as must any change in the “style” or investment philosophy, process, or practices approved by the Board at the time any IM was retained to serve the Fund. Specific Guidelines, Domestic Equity 1. Full discretion, consistent with the Investment Objectives, Policies, and Guidelines set forth in this Statement, is granted to each IM retained to manage domestic equity securities. 2. Each IM retained for this mandate shall select domestic equity investments in conformity with criteria normally applied in its decision making process and previously reviewed and approved by the Board. 3. No IM shall invest on a market value basis more than five (5) percent of the domestic equity portion of any portfolio in the equity security(ies) of a single corporation or group of directly affiliated corporations, nor maintain an investment of more than eight (8) percent similarly calculated. 4. No IM may make or maintain an investment equaling or exceeding four and nine-tenths (4.9) percent ownership of the outstanding domestic equity security(ies) of a single corporation, or group of directly affiliated corporations, without the written consent of the Board. 5. Each IM is expected to purchase marketable domestic equity securities listed on national securities exchanges or actively traded within the national NASDAQ framework; domestic U.S. equity securities, purchased outside the channels cited, or purchased without regard to necessary market liquidity as demonstrated through weekly trading statistics, place upon any IM a special burden respecting Board tolerance of unacceptable risk and/or losses which might ensue. 6. As an exception to the general prohibition against so-called alternative investment instruments, stock options may be utilized by each IM managing domestic U.S. equity securities in “covered” or hedging postures but not in “naked” or speculative postures. 11

7. Again the total annualized investment return of all domestic U.S. equity investments of the Fund is expected to meet or exceed the total annualized return of the Russell 3000 Stock Index for cumulative periods of three-to-five (3-5) years or more. 8. Any IM serving as an active domestic U.S. equity manager will be assigned an index or other type of benchmark deemed suitable for it and agreed upon with the Board; as a general expectation any IM should exceed its assigned benchmark, post fees, on annualized bases during periods of three-to-five (3-5) years or more. INTERNATIONAL EQUITY INVESTMENT GUIDELINES The Board/Trustees shall review the Fund at least quarterly to assure that the International Equity limit of 21 percent of Fund market value is not exceeded; as necessary, the Custodian(s) will be instructed to redirect cash flows to the DA(s) or to accommodate immediate Board- directed DA(s)’ asset allocation revisions to restore the asset allocation currently approved by the Board/Trustees. Stated percentages may include foreign equity securities admitted to trading on U.S. Stock Exchanges or NASDAQ; American Depositary Receipts (ADRs) shall be designated as domestic equities. Specific Guidelines, International Equity 1. Investment in International Equity is permissible up to the maximum stated in asset allocation (page 8). Each IM retained as an International Equity Manager must receive specific Board authorization to invest in International Equity. Investing in emerging market equity securities is permissible subject to a maximum of fifteen (15) percent of any international equity portfolio at market value. Appropriate regional, national, industry and individual security diversification must be maintained at all times. 2. Any IM retained for this mandate is expected to select International Equity investments in conformity with criteria normally applied in its decision making process and previously reviewed and approved by the Board. 3. No IM shall invest more than five (5) percent of the equity portion of any International Equity portfolio in the equity security(ies) of a single corporation or group of directly affiliated corporations; no IM may maintain an investment equaling or exceeding eight (8) percent ownership in the equity security(ies) of any corporation, or group of directly affiliated corporations, without the written consent of the Board, nor may any International Equity IM exceed four (4) percent ownership of the outstanding equity of any company or group of affiliated companies. 4. Any IM retained for this mandate shall purchase marketable foreign stocks traded on regulated foreign or U.S. stock exchanges for which trading activity is published on a daily basis and for which any IM can demonstrate necessary liquidity as well as acceptable investment quality standards. 5. The annualized total investment return from any portfolio of International Equity investments of the Fund is expected to meet or exceed after fees the annualized total return of an appropriate benchmark, to be agreed upon by any IM and the Board, for periods of three- 12

to-five (3-5) years or more. In the absence of another selected benchmark, the Morgan Stanley C.I. “EAFE” Index shall serve as benchmark. 6. Because an active currency hedging strategy may reduce risk of loss and/or enhance IM International Equity investment performance, hedging to protect against currency impact upon a security position may be in the best interest of the Fund. Nevertheless, the purchase of speculative or “naked” currency contracts (i.e., “currency trading” or related risk taking undertaken without a demonstrable exposed investment position to be hedged in a specific currency) is prohibited. DOMESTIC FIXED INCOME INVESTMENT GUIDELINES The Board shall review the Fund portfolio at least quarterly to assure that the domestic fixed income securities market value limit of 40 percent is not exceeded. As necessary, any Custodian will be instructed by the Board to redirect investment and/or contribution cash flows to or from any IM or to accommodate immediate Board-ordered portfolio revisions to restore the asset allocation currently approved. Any IM retained for this mandate shall conform to the Domestic Fixed Income Investment Guidelines set forth above and below. Any departure from the Guidelines must be submitted in writing to the Board for prior approval, as must any change in the "style" or investment philosophy, process, or practices approved by the Board at the time any IM was retained to manage domestic fixed income securities of the Fund. Specific Guidelines, Domestic Intermediate Term Fixed Income 1. Full discretion, consistent with the Investment Objectives, Policies, and Guidelines set forth in this Statement, is granted to each IM retained to manage domestic intermediate term fixed income securities. 2. Any IM retained for this mandate is expected to select domestic intermediate term fixed income investments in conformity with the criteria normally applied in its decision making process and previously reviewed and approved by the Board. 3. Suitable domestic intermediate term fixed income investments include, but are not limited to, U.S. Treasury and Agency securities, marketable debt securities of U.S. corporations, U.S. certificates of deposit and bankers’ acceptances, and commercial paper or other generally utilized money market or cash equivalent investments, including money market mutual funds meeting the quality standards delineated below. 4. Foreign fixed income securities, if rated Baa or above, including Canadian securities, denominated in U.S. dollars (i.e., foreign “Yankee” and Canadian U.S. pay securities) may be purchased to a limit of the applicable fixed income manager’s benchmark plus 5% at market value of any domestic intermediate term fixed income securities portfolio. 5. Permissible private placement (Rule 144a) securities, per General Guidelines, 2., p. 10 above, shall not exceed twenty (20) percent of the market value of any domestic intermediate term fixed income portfolio. Fixed income investments may not otherwise include unregistered, deep discount or zero coupon securities (excepting U.S. Treasury, see 13

12., p. 15, below), tax exempt, indirectly asset backed, spread-dependent, stripped, or otherwise derivative or synthetic securities. 6. At no time shall margin or other leveraged transactions, short sales, forward or futures trading, or any form of portfolio hedging be employed in the management of domestic intermediate term fixed income investments. 7. The total annualized investment return of all domestic fixed income investments of the Fund is expected to meet or exceed the total annualized return of the Lehman Intermediate Government/Credit Index. 8. The average quality of domestic intermediate term fixed income securities purchased by any IM shall equal or exceed A, the third broad investment grade as determined by any nationally recognized and regulated general or specialty debt/credit rating agency (e.g., including but not limited to Moody's, Standard & Poor's, Fitch, Duff & Phelps, Thompson's Bank Watch). If commercial paper is purchased the single acceptable quality shall be A1 or P1 or "Prime,” with no second level considered. 9. The minimum quality of any single fixed income investment shall be investment grade, as defined by two out of three of the following rating agencies; Moody’s, Standard and Poors, or Fitch. If an investment is made in commercial paper, the single standard shall be A1 or P1 or “Prime.” 10. The average effective duration of domestic fixed income securities, said average including any investments considered to be reserve or cash equivalent assets specific to any fixed income portfolio, shall never be more than twelve (12) months greater or less than the most recently published average or effective duration of the fixed income policy benchmark. 11. There shall be no limit upon investment in U.S. Treasury securities as a percentage of domestic intermediate term fixed income investments at cost or market value, except that any single coupon issue thereof may constitute at purchase more than thirty (30) percent of domestic intermediate term fixed income portfolio at market value, nor any single Treasury zero coupon issue ten (10) percent at market value, with a per-portfolio collective limit for Treasury or Agency zero coupon securities of thirty (30) percent at market value and an eight (8) year effective duration limit for any zero coupon security. Federal Agency securities are hereby limited to forty (40) percent of any domestic intermediate term fixed income investment portfolio at market value, with a per-issue limit of ten (10) percent at market value, excepting zero coupon Agency securities which shall be limited to five (5) percent per-issue at market value. Sharply lower limits are set for other types of securities. Without prior written Board approval, excepting Treasury and Agency securities: a. any single security issue shall not constitute more than five (5) percent, b. securities of any single issuer or of directly affiliated issuers shall not constitute more than seven (7) percent, c. securities of a recognized industry (e.g., steel, auto, aluminum, banking), or d. securities of a single broad issuer type (e.g., utility, finance, industrial), or e. of one structural or transaction type (e.g., mortgage-backed, asset-backed), 14

f. shall not constitute more than twenty (20) percent of any domestic intermediate term fixed income securities portfolio at market value. Permissible Rule 144a securities shall also be limited to twenty (20) percent at market value. 12. Any domestic fixed income security purchased in compliance with the quality, maturity, and/or diversification standards cited in 3., through 12., above, but no longer meeting a specific, per-security Investment Guideline standard, and/or by marginal effect causing non-compliance (e.g., occasioning fixed income portfolio decline to sub-standard average quality), may in lieu of immediate depressed or inappropriate sale be reported to the Board, with background information and an intended future course of action, by any IM. The Board may upon review approve temporary or indefinite retention or, in the Board’s best judgment, order disposition of the security and a return to full compliance with the Investment Guidelines. Securities retained under such circumstances shall constitute no more than five (5) percent of the market value of domestic intermediate term fixed income securities (5% “basket clause”). 13. AAA-rated asset-backed securities and AAA-rated agency and private label mortgage- backed securities, including collateralized mortgage obligations limited to five (5) percent per-issue and ten (10) percent of the market value of any domestic intermediate term fixed income portfolio at the time of purchase, are suitable fixed income investments, provided said obligations afford no features which would increase volatility beyond that of the underlying collateral. (E.g., C.M.O. “floaters” indexed to the London Interbank Offering Rate or LIBOR would not be suitable investments.) REVIEW PROCEDURES All Investment Policies, Objectives and Guidelines contained in this Statement shall be reviewed by the Board annually, or whenever circumstances change to the extent that earlier representations are ineffective or inappropriate. All concerned parties shall be notified in writing of any changes and/or additions. 1. Investment performance shall be reviewed quarterly. 2. Total Fund, asset class (e.g., domestic equity, international equity, domestic fixed income), and asset sub-class and/or “style” returns, shall be compared to universes of returns of comparable professionally managed tax-exempt balanced, equity and fixed income portfolios or collective or mutual funds as well as to benchmark indices or index composites. 3. It is expected that the investment performance of an IM will rank above any agreed upon universe median or index over periods of three-to-five (3-5) years and will meet or exceed the Investment Objectives identified in this Statement. 4. The Board reserves the right to terminate a relationship with any IM at any time, subject to the terms of any investment advisory agreement, if the Board determines that said action is warranted. In addition, the Board reserves the right to remove assets, in part, at any time 15

provided that any contracted asset and/or fee minimum of any IM is met or a change is negotiated. 5. Any IM shall provide statements of assets under management to the Board quarterly, and shall also comply with reasonable additional information requests from the Board, including details of any/all securities transactions and/or “soft dollar” payments if said payments are made at official Board request and/or arise from transactions involving the Fund. 6. Any IM shall meet at least annually, if requested by the Board, to review the Total Fund and any respective portfolio(s) and to discuss investment results in the context of all of the goals, Objectives, Policies and Guidelines set forth in this Statement. SIGNATURES The effective date of this Investment Policy Statement, adopted by the City of Dover Police Pension Board, is August 8, 2013. Chairperson City of Dover-Controller/Treasurer Amended November 9, 2011 Amended November 8, 2012 Amended August 8, 2013 16

AMENDMENT 1 The following amendment to the investment policy has been reviewed and approved by the Board: I. Allocation of Plan Assets -The plan will utilize a dynamic policy linked to funded status of the plan. As funded status improves to the next threshold, the allocation of the plan will be adjusted to the specified allocation. Within each threshold, there will be a range of+/- 5% to the target to allow for modest market fluctuations before rebalancing of the portfolio. The portfolio will be reviewed at least quarterly and adjusted as necessary to maintain alignment with the target allocations Dynamic Investment Policy Funded Status Asset Category 40% 70% 80% 85% 90% 95% 100% Cash & Short Term Bond 7% 7% 5% 5% 5% 5% 5% US Treasuries/Inflation-linked 2% 2% 4% 5% 7% 10% 13% Intermediate Term Bond 14% 15% 16% 18% 18% 21% 23% Long Term Bond 17% 19% 20% 23% 26% 30% 34% Large Cap Value -US Stock 10% 10% 9% 8% 8% 7% 4% Large Cap Growth -US Stock 10% 9% 9% 8% 7% 5% 4% Mid Cap -US Stock 5% 5% 5% 5% 5% 4% 3% Small Cap-US Stock 5% 5% 5% 4% 4% 3% 3% Real Estate/REIT 5% 5% 5% 4% 4% 3% 3% Non-US Stock 10% 9% 9% 8% 7% 5% 3% Emerging Markets 15% 14% 13% 12% 10% 7% 5% Equity 60% 57% 55% 49% 45% 34% 25% Fixed Income/Cash 40% 43% 45% 51% 56% 66% 75% Total 100% 100% 100% 100% 101% 100% 100% II. Performance Monitoring Benchmarks - The plan will utilize asset category specific benchmarks to monitor investment manager performance. In addition, overall portfolio performance will be benchmarked to a normal portfolio composed of category indexes allocated based on the Dynamic Investment Policy funded status position. Asset Category Index Cash & Money Market CitiGroup 3 Month TBill Short-term Bond BofA Merrill Lynch 1-3 Yr Corp Intermediate-term Bond BarCap lnterm US Govt/Credit Long-term Bond BarCap Long GovtCredit Index Large Cap Value S&P/Citi 500Value Large Cap Blend S&P 500 Index Large Cap Growth S&P/Citi 500 Growth Mid Cap Value S&P/Citi Mid-Cap 400 Value Mid Cap S&P 400 Mid Cap Mid Cap Growth S&P/Citi Mid-Cap 400 Growth Small Cap Value S&P/Citi Small Cap 600 Value Small Cap S&P 600 Small Cap Small Cap Growth S&P/CitiSmall Cap 600 Growth MSCI ACWI xUS NR MSCI EAFE S&P EPACEMI MSCI EAFE Small Cap MSCI EM NR MSCI EM (Emerging Markets) REIT/Real Estate FTSE NAREIT Equity REIT 17

AMENDMENT 1 TO THE INVESTMENT POLICY STATEMENT FOR CITY OF DOVER POLICE PENSION BOARD Ill. Approval by the Board- To indicate approval of this amendment to the Investment Policy Statement, the appropriate designated Board member shall sign below. This Amendment to the Statement of Investment Policy approved by action of the Board. Date: ______________________ Approved by, ____________________ Chairman Title: ______________________ 18

250 Washington Ave Ext Albany, NY 12203 USA Tel +1 518 514 7157 Fax +1 518 514 7200 MEMO milliman.com To: City of Dover, Delaware Police Pension Plan – Board From: Jeff Marzinsky & Kevin Abessi /Milliman Re: Investment Committee Meeting Notes – 11/14/2013 Enclosures: Milliman Quarterly Investment Monitor Report (QIM) 1. Police Pension Plan Investment Review through 9/30/2013: a. As of 9/30/2013, assets in the plan total $11.41 million, up from $11.03 million as of 6/30/2013. During the quarter, the plan had contributions of approximately $398 thousand, withdrawals of approximately $382 thousand, and fees of $1.3 thousand. b. Total performance of the plan portfolio was 3.30% net (3.37% gross) for the quarter, slightly below the Plan’s benchmark index performance of 3.77%. c. As of 9/30/13, the Plan’s asset allocation was in line with the allocation targets, as the plan was rebalanced on its quarterly schedule prior to quarter end. NEW Target Allocation Fund with Additional Asset NEW Asset Allocation Range Category Description Category Investment Name Classes 8/2013 Money Market CA Wells Fargo Advtg Treas Plus MMkt 4.50% 0-10%; target 10% Cash + STB Short Term Bonds STB Vanguard Short Term Bond 5.50% 0-10%; target 10% Cash + STB Inflation Protected Bonds TIPS Vanguard Inflation Prot Sec 5.00% 0-10%; target of 5% TIPS Intermediate Term Bonds INTB Vanguard Intermediate Bond 8.00% 3-13%; target 8% INTB Long Term Bonds LTB PIMCO Long Duration 4.50% 4-14%; target 9% LTB Long Term Bonds LTB Vanguard Long Duration 4.50% 4-14%; target 9% LTB High Yield Bond HYB Ivy High Income I 8.00% 3-13%; target 8% HYB Large Cap Value LCV Vanguard Equity Income 10.00% 5-15%; target 10% LCV Large Cap Growth LCG Vanguard Morgan Growth 5.00% 5-15%; target 10% LCG Large Cap Growth LCG Vanguard Primecap 5.00% 5-15%; target 10% LCG Mid Cap MCV Vanguard Mid Cap Value Index 5.00% 0-10%; target 5% MC Small Cap SCV Target Small Cap Value 8.00% 3-13%; target 8% SC Real Estatement Investment REIT Vanguard REIT Index 7.00% 2-12%; target 7% REIT Foreign Equity GLB American Funds New Perspective 5.00% 5-15%; target 10% GLB Foreign Equity GLB Harding Loevner Global Equity 5.00% 5-15%; target 10% GLB Emerging Markets EMG Vanguard Emerging Mkts 10.00% 5-15%; target 10% Emg Mkts Offices in Principal Cities Worldwide

Meeting Notes Page 2 2. Comments on specific funds: a. American Funds New Perspective and Harding Loevner Equity  Both funds are "world allocation" mandates; including US, non-US stocks and emerging markets stock.  This broad-based allocation has caused under performance to the non-US specific allocation strategy in the IPS.  In addition, the underlying holdings have overlap to the US stock and emerging markets funds in the plan.  Being legacy funds, from the prior advisor who employed a different strategy, we find that they no longer fit the investment strategy for the plan.  For the next meeting, there will be recommendations for more focused non-US stock investment fund(s). Offices in Principal Cities Worldwide

City of Dover Police Pension Plan Quarterly Return Summary POLICE-NET POLICE GROSS- Month End BMV Contribution Withdrawls Fees Gain EMV RETURN RETURN 7/31/2013 $ 11,035,245.05 $ 932.00 $ 127,422.77 $ 474.22 $ 251,685.70 $ 11,159,965.76 2.31% 2.33% 8/31/2013 $ 11,159,965.76 $ 89,276.85 $ 127,486.81 $ 452.59 $ (266,321.80) $ 10,854,981.41 -2.41% -2.39% 9/30/2013 $ 10,854,981.41 $ 307,400.00 $ 127,486.81 $ 445.06 $ 380,551.50 $ 11,415,001.04 3.46% 3.49% $ 397,608.85 $ 382,396.39 $ 1,371.87 $ 365,915.40 Quarterly Return 3.30% 3.37% Milliman, Inc.

Quarterly Investment Monitor Summary Report for the Quarter Ending September 30, 2013 Prepared for City of Dover, Delaware Police Pension Plan

Quarterly Investment Monitor Contents Section A: Market Commentary Section B: Performance Summary Section C: Core Fund Review Section D: Glossary City of Dover, Delaware Police Pension Plan 2

Quarterly Investment Monitor Market Indices - 3rd Quarter 2013 Index 3 1 3 5 Months Year Years Years BofAML US Treasury Bill 3 Mon 0.02 0.10 0.10 0.16 Barclays US Govt 1-3 Yr TR USD 0.29 0.37 0.75 1.84 Barclays US Govt/Credit Interm TR USD 0.62 -0.50 2.41 4.95 Barclays US Government Long TR USD -2.12 -10.43 3.64 6.50 Barclays US Long Credit TR USD -0.03 -6.89 5.36 11.17 Barclays US Corporate High Yield TR USD 2.28 7.14 9.19 13.53 DJ Industrial Average TR USD 2.12 15.59 14.94 9.93 S&P 500 TR 5.24 19.34 16.27 10.02 NASDAQ 100 TR USD 11.01 16.71 18.61 16.22 NASDAQ Composite TR USD 11.19 22.77 18.17 13.76 Russell 1000 Value TR USD 3.94 22.30 16.25 8.86 Russell 1000 TR USD 6.02 20.91 16.64 10.53 Russell 1000 Growth TR USD 8.11 19.27 16.94 12.07 Russell 2000 Value TR USD 7.59 27.04 16.57 9.13 Russell 2000 TR USD 10.21 30.06 18.29 11.15 Russell 2000 Growth TR USD 12.80 33.07 19.96 13.17 FTSE NAREIT All REITs TR -2.39 5.14 12.60 6.47 MSCI EAFE NR USD 11.56 23.77 8.47 6.35 MSCI EAFE Small Cap NR USD 15.52 29.43 11.25 11.43 MSCI EM NR USD 5.77 0.98 -0.33 7.22 City of Dover, Delaware Police Pension Plan 3

Quarterly Investment Monitor Broad Market Commentary - 3rd Quarter 2013 Broad Markets - Quarter Broad Markets - Five Years Jul-13 - Sep-13 Sep-08 - Sep-13 12 200 180 10 160 8 Total Return, % Growth of $100 140 6 120 4 100 2 80 0 60 Jul-13 - Sep-13 Sep-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Sep-13 Total Total Barclays US Govt/Credit Interm TR USD S&P 500 TR Barclays US Govt/Credit Interm TR USD S&P 500 TR NASDAQ Composite TR USD MSCI EAFE NR USD NASDAQ Composite TR USD MSCI EAFE NR USD Market Commentary · The U.S. stock market rose on improving U.S. economic data, steady growth in corporate earnings, and the Federal Reserve's decision to postpone its planned reduction (“tapering”) of securities purchases. · The international equity markets made substantial gains on Europe's emergence from recession, improving economic data in certain emerging markets economies, and the Fed's decision to maintain its stimulus program at current levels. · The market experienced wide swings in financial and commodity prices during the quarter, which may not necessarily be reflected in the manager's performance. · The Fed surprised many investors in mid-September by not reducing its securities purchases, announcing it would continue its purchases at the current rate of $85 billion per month and keep short-term interest rates low until at least 2015. · As the quarter ended, mutual fund investors decreased their holdings in bonds and increased their holdings in stocks. For the quarter, bond funds had net outflows of $60.0 billion, while stock funds had net inflows of $30.8 billion. Total money market mutual fund assets increased by $99.5 billion to $2.694 trillion. · The price of oil increased from $97 per barrel to $102 during the quarter, an increase of 5.2%. City of Dover, Delaware Police Pension Plan 4

Quarterly Investment Monitor US Fixed Income Market Commentary - 3rd Quarter 2013 US Fixed Income - Quarter US Fixed Income - Five Years Jul-13 - Sep-13 Sep-08 - Sep-13 3 200 180 2 160 Growth of $100 1 Total Return, % 140 0 120 -1 100 -2 80 60 -3 Sep-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Sep-13 Jul-13 - Sep-13 Total Total BofAML US Treasury Bill 3 Mon Barclays US Govt 1-3 Yr TR USD BofAML US Treasury Bill 3 Mon Barclays US Govt 1-3 Yr TR USD Barclays US Govt/Credit Interm TR USD Barclays US Government Long TR USD Barclays US Govt/Credit Interm TR USD Barclays US Government Long TR USD Barclays US Long Credit TR USD Barclays US Corporate High Yield TR USD Barclays US Long Credit TR USD Barclays US Corporate High Yield TR USD US Bond Market · The broad fixed income market rose 0.57% in the 3rd quarter, as the coupon return of 0.70% more than offset the negative impact from a rise in interest rates. · The short end of the yield curve remained unchanged as the Fed maintained its near-zero interest rate policy. · Interest rates increased slightly for 7- to 30-year Treasury bonds. · High-yield bonds were the best performing sector this quarter, up 2.28%, as investors favored bonds with higher yields. · Long-term corporate bonds were up 0.03%, as tightening spreads slightly offset the negative impact from rising yields on the long end of the curve. · Long-term government bonds were the worst performing sector this quarter, down 2.70%, as investors anticipated lower bond purchases by the Fed. · 3-month T-Bill returned 0.02% in the third quarter, the same return as in the second quarter. City of Dover, Delaware Police Pension Plan 5

Quarterly Investment Monitor US Equity Market Commentary - 3rd Quarter 2013 US Equity - Quarter US Equity - Five Years Jul-13 - Sep-13 Sep-08 - Sep-13 14 200 12 180 160 10 Total Return, % Growth of $100 140 8 120 6 100 4 80 2 60 0 40 Jul-13 - Sep-13 Sep-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Sep-13 Total Total Russell 1000 Value TR USD Russell 1000 TR USD Russell 1000 Value TR USD Russell 1000 TR USD Russell 1000 Growth TR USD Russell 2000 Value TR USD Russell 1000 Growth TR USD Russell 2000 Value TR USD Russell 2000 TR USD Russell 2000 Growth TR USD Russell 2000 TR USD Russell 2000 Growth TR USD US Stock Market · Most major domestic equity indices posted a gain for the quarter. The small-cap Russell 2000 Growth Index had the best return, up 12.80%. · In terms of capitalization, small-cap stocks outperformed large-cap stocks. · In comparing styles, growth stocks did better than value stocks. · REITs fell 3.15%, as dividend-oriented and defensive sectors lagged the broad market. The worst performing sectors were health care and apartments. · Materials were the best performing sector, up 9.89%, on optimism over U.S. and global economic growth and mostly higher commodity prices. · Telecommunications services were the worst performing sector, falling 3.22%, as Verizon shares lost 6% after the company agreed to buy Vodafone's stake in Verizon Wireless. City of Dover, Delaware Police Pension Plan 6

Quarterly Investment Monitor International Market Commentary - 3rd Quarter 2013 International - Quarter Jul-13 - Sep-13 16 14 International - Five Years 12 Sep-08 - Sep-13 Total Return, % 10 180 8 6 160 4 2 0 140 Growth of $100 MSCI EAFE NR USD MSCI EAFE Small Cap NR USD 120 MSCI EM NR USD Regional Performance - Quarter Jul-13 - Sep-13 100 16 14 12 80 Total Return, % 10 8 60 6 Sep-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Sep-13 4 MSCI EAFE NR USD MSCI EAFE Small Cap NR USD 2 MSCI EM NR USD 0 MSCI Australia NR USD MSCI Europe Ex UK NR USD MSCI UK NR USD MSCI Pacific Ex Japan NR USD MSCI Japan NR USD MSCI EM Latin America NR USD International Markets · The dollar was down against the euro, pound, and yen. · For the quarter, the EAFE Index was up 11.56%, and Emerging Markets were up 5.77%. Local currency returns for the EAFE Index and Emerging Markets were 7.50% and 5.63%, respectively. · Among the major international regions, European stocks had the highest return, up 14.94%, as the euro zone had positive economic growth, and certain telecom and technology stocks benefited from acquisitions. · Stocks in India had the lowest return, down 5.67%, on worries about rising inflation, weak economic growth, and a sharply depreciating rupee. · Small-cap stocks, up 15.5%, outperformed large-cap stocks. City of Dover, Delaware Police Pension Plan 7

Quarterly Investment Monitor Data as of 09/30/2013 Performance Summary City of Dover, Delaware Police Pension Plan 8

Quarterly Investment Monitor Data as of 09/30/2013 Asset Allocation Balances As of Percent As of Balances As of Percent As of Notes 09/30/2013 09/30/2013 06/30/2013 06/30/2013 Wells Fargo Advantage Treas Plus MMkt I $461,096 4.04% $830,063 7.52% PISXX Vanguard Short-Term Bond Index Signal $693,482 6.08% $217,797 1.97% VBSSX Vanguard Inflation-Protected Secs I $579,182 5.07% $204,092 1.85% VIPIX Vanguard Interm-Term Bond Index Signal $934,479 8.19% $1,484,885 13.46% VIBSX Vanguard Long-Term Bond Index I $530,774 4.65% $884,237 8.01% VBLLX PIMCO Long Duration Total Return Instl $528,166 4.63% $875,982 7.94% PLRIX Ivy High Income I $920,775 8.07% $0 0.00% IVHIX Vanguard Equity-Income Adm $1,125,296 9.86% $1,142,758 10.35% VEIRX Vanguard Morgan Growth Adm $566,307 4.96% $565,461 5.12% VMRAX Vanguard PRIMECAP Inv $564,565 4.95% $574,108 5.20% VPMCX Vanguard Mid-Cap Value Index Admiral $566,425 4.96% $566,470 5.13% VMVAX Target Small Capitalization Value T $922,457 8.08% $568,307 5.15% TASVX American Funds New Perspective R6 $566,850 4.97% $551,580 5.00% RNPGX Harding Loevner Global Equity Inst $567,521 4.97% $542,553 4.92% HLMVX Vanguard Emerging Mkts Stock Idx I $1,102,882 9.66% $1,480,582 13.42% VEMIX Vanguard REIT Index I $784,594 6.87% $547,021 4.96% VGSNX Plan Total $11,414,851 $11,035,896 City of Dover, Delaware Police Pension Plan 9

Quarterly Investment Monitor Data as of 09/30/2013 Investment Policy Review - Active Management Return Return Excess Excess Relative Relative Alpha Sharpe Alpha Sharpe Fund Rank Rank Return Return StdDev StdDev Rank Rank Rank Rank Name 3Y 5Y 3Y 5Y 3Y 5Y 3Y 3Y 5Y 5Y Vanguard Inflation-Protected Secs I 10 34 -0.12 -0.22 1.02 1.01 24 18 59 53 PIMCO Long Duration Total Return Instl 73 20 -0.43 1.33 0.93 0.96 87 80 80 67 Ivy High Income I 1 2 2.49 0.41 0.77 0.75 1 1 0 0 Vanguard Equity-Income Adm 8 15 2.01 2.30 0.78 0.84 2 1 10 10 Vanguard Morgan Growth Adm 43 40 -0.95 -0.63 1.25 1.14 59 54 48 44 Vanguard PRIMECAP Inv 28 40 -0.02 -0.59 1.15 1.11 20 20 40 39 Target Small Capitalization Value T 50 43 -2.77 0.11 0.90 0.86 23 19 30 28 American Funds New Perspective R6 28 17 2.56 2.74 0.96 0.94 30 26 19 17 Harding Loevner Global Equity Inst 67 39 -0.35 1.28 0.98 0.96 62 61 45 39 Definitions Return Rank - Fund's category percentile return rank, a value less than 50 (1 is the best and 100 is the worst) implies the fund is beating more than 50% of its peer group. Excess Return - Fund's excess return over its benchmark, a value greater than 0 implies the fund's return is higher than its benchmark. Relative StdDev - Fund's standard deviation relative to its benchmark, a value less than 1 implies the fund's standard deviation is lower than its benchmark. Alpha Rank - Fund's category percentile Alpha rank, a value less than 50 (1 is the best and 100 is the worst) implies the fund is beating more than 50% of its peer group. Sharpe Rank - Fund's category percentile Sharpe Ratio rank, a value less than 50 (1 is the best and 100 is the worst) implies the fund is beating more than 50% of its peer group. City of Dover, Delaware Police Pension Plan 10

Quarterly Investment Monitor Data as of 09/30/2013 Investment Policy Review - Passive Management Excess Excess Tracking Tracking Fund Beta Beta Expense Return Return Error Error Name 3Y 5Y Ratio 3Y 5Y 3Y 5Y Vanguard Short-Term Bond Index Signal 0.43 0.93 2.09 0.76 1.66 0.89 0.10 Vanguard Interm-Term Bond Index Signal 0.74 1.94 0.84 1.99 0.82 3.09 0.10 Vanguard Long-Term Bond Index I -0.01 0.01 1.01 0.79 1.02 0.81 0.07 Vanguard Mid-Cap Value Index Admiral -0.22 0.25 0.97 2.19 1.03 3.17 0.10 Vanguard Emerging Mkts Stock Idx I 0.20 -0.54 1.02 3.42 1.02 3.37 0.12 Vanguard REIT Index I 1.26 1.92 1.00 0.21 0.99 0.53 0.08 Definitions Excess Return - Fund's excess return over its benchmark, a value greater than 0 implies the fund's return is higher than its benchmark. Beta - Fund's Beta or sensitivity to movements compared to its benchmark, a value of 1 implies its moving in sync with its benchmark. Tracking Error - Fund's Tracking Error versus its benchmark, a value of 0 implies the Fund's ups and downs are the same size as its benchmark. City of Dover, Delaware Police Pension Plan 11

Quarterly Investment Monitor Data as of 09/30/2013 Investment Option Return Summary Asset Fund 3 1 3 5 10 Mstar Expense YTD Ticker Class Name Months Year Years Years Years Rating Ratio Taxable Money Market Wells Fargo Advantage Treas Plus MMkt I 0.00 0.01 0.01 0.01 0.02 1.54 PISXX NA 0.20 BofA ML 3-month T-bill total return Index 0.02 0.06 0.10 0.10 0.17 1.70 N/A NA NA Short-term Bond Vanguard Short-Term Bond Index Signal 0.57 0.04 0.18 1.51 3.46 3.34 VBSSX 3.00 0.10 Barclays US Govt/Credit 1-3 Yr TR USD 0.40 0.47 0.62 1.08 2.52 2.91 N/A NA NA Inflation-Protected Bond Vanguard Inflation-Protected Secs I 0.91 (6.74) (6.21) 3.90 5.09 5.10 VIPIX 4.00 0.07 Barclays US Treasury US TIPS TR USD 0.70 (6.74) (6.10) 4.02 5.31 5.23 N/A NA NA Intermediate-term Bond Vanguard Interm-Term Bond Index Signal 0.75 (2.89) (2.44) 3.76 7.55 5.41 VIBSX 4.00 0.10 Barclays US Govt 5-10 Yr TR USD 0.29 (3.17) (3.22) 3.02 5.61 5.15 N/A NA NA Long-term Bond Vanguard Long-Term Bond Index I (0.98) (8.60) (8.44) 4.70 9.08 6.37 VBLLX 2.00 0.07 Long-term Bond PIMCO Long Duration Total Return Instl (0.65) (8.37) (7.97) 4.28 10.40 NA PLRIX 3.00 0.50 BC Long Government/Credit (0.83) (8.74) (8.33) 4.71 9.07 6.33 N/A NA NA High Yield Bond Ivy High Income I 2.97 6.86 10.66 11.68 13.94 8.83 IVHIX 5.00 0.70 BC High Yield Corporate Bond 2.28 3.73 7.14 9.19 13.53 8.86 N/A NA NA Large Value Vanguard Equity-Income Adm 3.62 19.45 19.61 17.88 10.68 9.19 VEIRX 5.00 0.21 S&P 500 Value 3.84 20.17 22.15 15.86 8.38 7.74 N/A NA NA Large Growth Vanguard Morgan Growth Adm 8.71 22.02 20.86 15.78 10.95 8.14 VMRAX 3.00 0.26 Large Growth Vanguard PRIMECAP Inv 7.29 26.39 29.63 16.71 10.99 10.19 VPMCX 4.00 0.45 S&P 500 Growth 6.60 19.44 17.00 16.73 11.58 7.35 N/A NA NA Mid-Cap Value Vanguard Mid-Cap Value Index Admiral 6.52 24.52 28.94 17.07 12.90 NA VMVAX 3.00 0.10 CRSP US Mid Cap TR USD 7.71 24.53 28.08 17.30 12.66 10.58 N/A NA NA Small Value Target Small Capitalization Value T 8.43 24.88 29.57 17.20 11.59 11.91 TASVX 4.00 0.68 S&P 600 Value 9.53 27.71 31.78 19.97 11.48 10.76 N/A NA NA World Stock American Funds New Perspective R6 8.35 17.12 22.05 12.77 10.45 10.05 RNPGX 4.00 0.46 World Stock Harding Loevner Global Equity Inst 8.24 12.17 13.37 9.86 8.99 8.79 HLMVX 3.00 0.95 MSCI AC World Index ND USD 7.90 14.43 17.73 10.21 7.71 7.86 N/A NA NA Diversified Emerging Mkts Vanguard Emerging Mkts Stock Idx I 4.82 (6.50) (0.10) (0.91) 6.52 12.40 VEMIX 3.00 0.12 FTSE Emerging NR USD 4.30 (5.26) 0.17 (1.11) 7.07 13.04 N/A NA NA Real Estate Vanguard REIT Index I (2.96) 3.19 5.76 12.35 6.37 9.66 VGSNX 3.00 0.08 MSCI US REIT NR USD (3.28) 2.30 4.52 11.09 4.45 NA N/A NA NA Total Plan POLICE GROSS-RETURN 3.37 5.20 6.78 7.15 7.23 NA N/A NA NA Total Plan POLICE-NET RETURN 3.30 4.99 6.49 6.86 6.92 NA N/A NA NA Police Plan Policy Index 3.77 5.49 7.22 8.50 7.21 6.39 N/A NA NA City of Dover, Delaware Police Pension Plan 12

Quarterly Investment Monitor Data as of 09/30/2013 U.S. Fixed Income Style Map 36 Month moving average, Oct-08 - Sep-13 BC Government BC Credit Bond BC Municipal Bond BC High Yield Corporate Bond BC Mortgage Backed Securities Barcap US Fixed Income Vanguard Short-Term Bond Index Signal Vanguard Inflation-Protected Secs I Vanguard Interm-Term Bond Index Signal Vanguard Long-Term Bond Index I PIMCO Long Duration Total Return Instl Ivy High Income I City of Dover, Delaware Police Pension Plan 13

Quarterly Investment Monitor Data as of 09/30/2013 U.S. Equity Style Map 36 Month moving average, Oct-08 - Sep-13 LgValue LgGrowth Small - Large MidValue MidGrowth SmValue SmGrowth Value - Growth S&P/BARRA Style Indices Vanguard Equity-Income Adm Vanguard Morgan Growth Adm Vanguard PRIMECAP Inv Vanguard Mid-Cap Value Index Admiral Target Small Capitalization Value T Vanguard REIT Index I City of Dover, Delaware Police Pension Plan 14

Quarterly Investment Monitor Data as of 09/30/2013 International Equity Style Map 36 Month moving average, Oct-08 - Sep-13 Europe Large Asia Pacific Large Small - Large Europe Small Asia Pacific Small European Emerging Asia Pacific Emerging Europe - Asia SBI Equity Indices American Funds New Perspective R6 Harding Loevner Global Equity Inst Vanguard Emerging Mkts Stock Idx I City of Dover, Delaware Police Pension Plan 15

Quarterly Investment Monitor Data as of 09/30/2013 Core Fund Review City of Dover, Delaware Police Pension Plan 16

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Short-Term Bond Index Signal 1.10 Portfolio Information Investment Strategy Summary 10.95 % Cash Ticker VBSSX % US Stocks Morningstar Category Short-term Bond % Bonds The investment seeks to track the performance of a market-weighted bond index with a Avg Mkt Cap $MM NA % Non-US Stocks short-term dollar-weighted average maturity. The fund employs an indexing investment Cat Med Mkt Cap $MM 85765.91 approach designed to track the performance of the Barclays U.S. 1-5 Year % Pref Net Assets $MM 33077.30 Government/Credit Float Adjusted Index. This Index includes all medium and larger issues % Conv Turnover Ratio 51.00 of U.S. government, investment-grade corporate, and investment-grade international % Other % Assets in Top 10 Holdings 13.90 dollar-denominated bonds that have maturities between 1 and 5 years and are publicly % Non-US Bonds Total Number of Holdings 1705.00 issued. All of the fund's investments will be selected through the sampling process, and at Manager Name Joshua C. Barrickman least 80% of the fund's assets will be invested in bonds held in the index. 87.90 Manager Tenure 0.60 _______________________________________________________________________ Fund Incept Date 03/01/1994 __ Prospectus Exp Ratio 0.10 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States NA % Cash 1.10 7 % Canada NA % US Stocks 0.00 % Latin America NA % Bonds 87.90 6 % United Kingdom NA % Non-US Stocks 0.00 % Eurozone NA % Pref 0.05 Portfolio Ratings 5 % Europe - ex Euro NA % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging NA % Other 0.00 3 Year Mstar Rating % Africa NA % Non-US Bonds 10.95 % Rank Cat 3 Yr 58 4 % Middle East NA 5 Year Mstar Rating % Japan NA % Rank Cat 5 Yr 52 3 % Australasia NA 10 Year Mstar Rating % Asia - Developed NA % Rank Cat 10 Yr 31 2 % Asia - Emerging NA 1 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 2 250 % Basic Materials NA Avg Eff Duration 2.72 0 % Communication Services NA Effective Maturity 2.80 % Consumer Cyclical NA Avg Credit Quality AA 225 -1 % Consumer Defensive NA AAA 75.63 % Healthcare NA AA 4.21 200 -2 % Industrials NA A 11.61 3 Months YTD 1 Year 3 Years 5 Years % Real Estate NA BBB 8.55 175 % Technology NA BB 0.00 5th to 25th Percentile 25th to Median % Energy NA B 0.00 Prospectus Exp Ratio 150 Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services NA Below B 0.00 Vanguard Short-Term Bond Index Signal Barclays US Govt/Credit 1-3 Yr TR USD % Utilities NA NR/NA 0.00 1 125 Turnover 100 Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years US Treasury Note 0.25% 2.28% 75 Vanguard Short-Term Bond Index Signal 0.57 0.04 0.18 1.51 3.46 US Treasury Note 2.125% 1.62% Barclays US Govt/Credit 1-3 Yr TR USD 0.40 0.47 0.62 1.08 2.52 US Treasury Note 2.25% 1.37% 50 Universe(5%) 1.10 1.45 2.58 3.69 6.15 US Treasury Note 2.625% 1.32% Universe(25%) 0.77 0.50 1.11 2.38 4.62 US Treasury Note 2.5% 1.31% Universe(Median) 0.53 0.17 0.53 1.81 3.63 US Treasury Note 0.375% 1.25% 25 Universe(75%) 0.33 -0.28 0.00 1.25 2.78 US Treasury Note 0.875% 1.20% Universe(95%) 0.14 -1.44 -1.24 0.51 1.62 US Treasury Note 0.625% 1.19% 0 0 US Treasury Note 1.75% 1.19% Prospectus Exp Ratio Turnover Ratio US Treasury Note 0.25% 1.18% City of Dover, Delaware Police Pension Plan 17

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Short-Term Bond Index Signal Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 20 0 15 25 Total Return Rank, % 10 50 5 Total Return, % 75 0 -5 100 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -10 Up/Down Market Capture Ratio -15 Oct-10 - Sep-13 450 -20 400 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Up Mkt Capture Ratio, % 350 Vanguard Short-Term Bond Index Signal Barclays US Govt/Credit 1-3 Yr TR USD 300 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 250 Vanguard Short-Term Bond Index Signal 3.37 1.70 1.31 4.09 7.28 5.51 4.38 4.03 3.08 2.05 200 Barclays US Govt/Credit 1-3 Yr TR USD 2.81 1.30 1.77 4.25 6.83 4.97 3.82 2.80 1.59 1.26 150 100 50 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 2 3 3 3 0 -200 -100 0 100 200 300 400 500 600 700 Down Mkt Capture Ratio, % 1 Morningstar Short Term Bond Universe Vanguard Short-Term Bond Index Signal Total Annualized StdDev, % Excess Annualized StdDev, % 2 2 2 Barclays US Govt/Credit 1-3 Yr TR USD Alpha, % Sharpe Ratio 0 Return vs. Risk 1 1 1 Oct-10 - Sep-13 -1 7 6 Total Annualized Return, % 5 -2 0 0 0 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile 4 Vanguard Short-Term Bond Index Signal Barclays US Govt/Credit 1-3 Yr TR USD 3 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 2 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error 1 Vanguard Short-Term Bond Index Signal -0.64 2.09 90.18 1.08 1.30 0.76 0 Barclays US Govt/Credit 1-3 Yr TR USD 0.00 1.00 100.00 1.66 0.59 0.00 Universe(5%) 1.56 3.26 86.45 2.25 2.60 2.36 -1 0 1 2 3 4 Universe(25%) 0.48 2.09 72.66 1.51 1.87 1.49 Total Annualized StdDev, % Universe(Median) -0.02 1.54 61.09 1.22 1.29 0.92 Universe(75%) -0.38 1.34 45.05 0.99 0.99 0.64 Morningstar Short Term Bond Universe Vanguard Short-Term Bond Index Signal Universe(95%) -1.23 0.81 16.74 0.42 0.69 0.33 Cash Barclays US Govt/Credit 1-3 Yr TR USD City of Dover, Delaware Police Pension Plan 18

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Inflation-Protected Secs I 1.87 Portfolio Information Investment Strategy Summary % Cash Ticker VIPIX % US Stocks Morningstar Category Inflation-Protected Bond % Bonds The investment seeks to provide inflation protection and income consistent with Avg Mkt Cap $MM NA % Non-US Stocks investment in inflation-indexed securities. The fund invests at least 80% of its assets in Cat Med Mkt Cap $MM 21693.40 inflation-indexed bonds issued by the U.S. government, its agencies and instrumentalities, % Pref Net Assets $MM 29347.34 and corporations. It may invest in bonds of any maturity; however, its dollar-weighted % Conv Turnover Ratio 33.00 average maturity is expected to be in the range of 7 to 20 years. At a minimum, all bonds % Other % Assets in Top 10 Holdings 45.39 purchased by the fund will be rated investment-grade or, if unrated, will be considered by % Non-US Bonds Total Number of Holdings 43.00 the advisor to be investment-grade. Manager Name Gemma Wright-Casparius _______________________________________________________________________ Manager Tenure 2.12 __ 98.13 Fund Incept Date 06/29/2000 Prospectus Exp Ratio 0.07 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States NA % Cash 1.87 8 % Canada NA % US Stocks 0.00 % Latin America NA % Bonds 98.13 6 % United Kingdom NA % Non-US Stocks 0.00 % Eurozone NA % Pref 0.00 Portfolio Ratings 4 % Europe - ex Euro NA % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging NA % Other 0.00 3 Year Mstar Rating % Africa NA % Non-US Bonds 0.00 % Rank Cat 3 Yr 4 2 % Middle East NA 5 Year Mstar Rating % Japan NA % Rank Cat 5 Yr 27 0 % Australasia NA 10 Year Mstar Rating % Asia - Developed NA % Rank Cat 10 Yr 17 -2 % Asia - Emerging NA -4 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 1.0 350 % Basic Materials NA Avg Eff Duration 8.14 -6 % Communication Services NA Effective Maturity 8.80 % Consumer Cyclical NA Avg Credit Quality Government 0.9 -8 % Consumer Defensive NA AAA 100.00 300 % Healthcare NA AA 0.00 0.8 -10 % Industrials NA A 0.00 3 Months YTD 1 Year 3 Years 5 Years % Real Estate NA BBB 0.00 0.7 250 % Technology NA BB 0.00 5th to 25th Percentile 25th to Median % Energy NA B 0.00 Prospectus Exp Ratio 0.6 Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services NA Below B 0.00 200 Vanguard Inflation-Protected Secs I Barclays US Treasury US TIPS TR USD % Utilities NA NR/NA 0.00 0.5 Turnover 150 0.4 Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years US Treasury Note 5.75% 0.3 Vanguard Inflation-Protected Secs I 0.91 -6.74 -6.21 3.90 5.09 US Treasury Note 4.98% 100 Barclays US Treasury US TIPS TR USD 0.70 -6.74 -6.10 4.02 5.31 US Treasury Note 4.90% 0.2 Universe(5%) 1.16 -3.77 -3.40 4.11 6.35 US Treasury Note 4.88% Universe(25%) 0.91 -6.44 -5.71 3.62 5.57 US Treasury Note 0.125% 4.84% 50 Universe(Median) 0.68 -6.91 -6.31 3.44 4.91 US Treasury Note 4.62% 0.1 Universe(75%) 0.56 -7.25 -6.65 3.12 4.42 US Treasury Note 1.125% 4.51% Universe(95%) 0.39 -9.60 -9.77 2.01 3.33 US Treasury Note 1.25% 4.00% 0.0 0 US Treasury Bond 2.375% 3.93% Prospectus Exp Ratio Turnover Ratio US Treasury Note 0.5% 2.98% City of Dover, Delaware Police Pension Plan 19

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Inflation-Protected Secs I Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 20 0 15 25 Total Return Rank, % 10 50 Total Return, % 5 75 0 100 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -5 Up/Down Market Capture Ratio -10 Oct-10 - Sep-13 180 -15 160 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Up Mkt Capture Ratio, % 140 Vanguard Inflation-Protected Secs I Barclays US Treasury US TIPS TR USD 120 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 100 Vanguard Inflation-Protected Secs I 8.00 8.25 2.78 0.46 11.82 -2.81 11.03 6.33 13.39 6.87 80 Barclays US Treasury US TIPS TR USD 8.40 8.46 2.84 0.41 11.64 -2.35 11.41 6.31 13.56 6.98 60 40 20 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 1 0.8 7 5 0 0 20 40 60 80 100 120 140 160 180 200 0.7 6 Down Mkt Capture Ratio, % 4 0.6 Morningstar Inflation Proteced Bond Universe Vanguard Inflation-Protected Secs I Excess Annualized StdDev, % 5 Total Annualized StdDev, % 0 Barclays US Treasury US TIPS TR USD 0.5 3 Sharpe Ratio 4 Alpha, % 0.4 3 2 Return vs. Risk 0.3 -1 2 Oct-10 - Sep-13 0.2 6 1 1 0.1 5 Total Annualized Return, % -2 0.0 0 0 4 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile Vanguard Inflation-Protected Secs I Barclays US Treasury US TIPS TR USD 3 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 2 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error Vanguard Inflation-Protected Secs I -0.17 1.01 99.29 0.67 5.78 0.49 1 Barclays US Treasury US TIPS TR USD 0.00 1.00 100.00 0.71 5.67 0.00 Universe(5%) 0.35 1.07 99.66 0.75 6.22 4.04 0 0 1 2 3 4 5 6 7 8 9 10 11 Universe(25%) -0.19 1.01 99.32 0.66 5.73 1.27 Total Annualized StdDev, % Universe(Median) -0.47 0.97 98.99 0.61 5.54 0.66 Universe(75%) -0.71 0.93 96.23 0.57 5.31 0.50 Morningstar Inflation Proteced Bond Universe Vanguard Inflation-Protected Secs I Universe(95%) -1.56 0.62 71.18 0.40 4.24 0.34 Cash Barclays US Treasury US TIPS TR USD City of Dover, Delaware Police Pension Plan 20

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Interm-Term Bond Index Signal Portfolio Information Investment Strategy Summary % Cash 13.40 Ticker VIBSX % US Stocks Morningstar Category Intermediate-term Bond % Bonds The investment seeks the performance of a market-weighted bond index with an Avg Mkt Cap $MM NA % Non-US Stocks intermediate-term dollar-weighted average maturity. The fund employs an indexing Cat Med Mkt Cap $MM NA investment approach designed to track the performance of the Barclays U.S. 5-10 Year % Pref Net Assets $MM 14770.76 Government/Credit Float Adjusted Index. This Index includes all medium and larger issues % Conv Turnover Ratio 65.00 of U.S. government, investment-grade corporate, and investment-grade international % Other % Assets in Top 10 Holdings 26.98 dollar-denominated bonds that have maturities between 5 and 10 years and are publicly % Non-US Bonds Total Number of Holdings 1495.00 issued. All of the fund's investments will be selected through the sampling process, and at Manager Name Joshua C. Barrickman least 80% of the fund's assets will be invested in bonds held in the index. 86.41 Manager Tenure 5.44 _______________________________________________________________________ Fund Incept Date 03/01/1994 __ Prospectus Exp Ratio 0.10 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States NA % Cash 0.15 8 % Canada NA % US Stocks 0.00 % Latin America NA % Bonds 86.41 7 % United Kingdom NA % Non-US Stocks 0.00 6 % Eurozone NA % Pref 0.00 Portfolio Ratings % Europe - ex Euro NA % Conv 0.00 Mstar Rating Total Annualized Return, % 5 % Europe - Emerging NA % Other 0.04 3 Year Mstar Rating % Africa NA % Non-US Bonds 13.40 % Rank Cat 3 Yr 33 4 % Middle East NA 5 Year Mstar Rating % Rank Cat 5 Yr 22 3 % Japan NA % Australasia NA 10 Year Mstar Rating 2 % Asia - Developed NA % Rank Cat 10 Yr 16 % Asia - Emerging NA 1 0 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 350 -1 % Basic Materials NA Avg Eff Duration 6.55 % Communication Services NA Effective Maturity 7.30 -2 % Consumer Cyclical NA Avg Credit Quality A % Consumer Defensive NA AAA 54.17 300 -3 0.5 % Healthcare NA AA 4.48 -4 % Industrials NA A 18.87 3 Months YTD 1 Year 3 Years 5 Years % Real Estate NA BBB 22.48 250 % Technology NA BB 0.00 0.4 5th to 25th Percentile 25th to Median % Energy NA B 0.00 Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services NA Below B 0.00 200 Vanguard Interm-Term Bond Index Signal Barclays US Govt 5-10 Yr TR USD % Utilities NA NR/NA 0.00 0.3 Turnover 150 Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years US Treasury Note 3.625% 3.21% 0.2 Vanguard Interm-Term Bond Index Signal 0.75 -2.89 -2.44 3.76 7.55 US Treasury Note 3.5% 3.18% 100 Barclays US Govt 5-10 Yr TR USD 0.29 -3.17 -3.22 3.02 5.61 US Treasury Note 1.75% 3.09% Universe(5%) 0.67 -2.02 -1.95 3.13 6.24 US Treasury Note 3.625% 3.05% 0.1 Universe(25%) 0.54 -2.11 -2.00 2.65 5.24 US Treasury Note 3.125% 2.82% 50 Universe(Median) 0.52 -2.14 -2.05 2.60 5.16 US Treasury Note 2% 2.63% Universe(75%) 0.49 -2.20 -2.12 2.43 5.06 US Treasury Note 2.625% 2.38% Universe(95%) 0.35 -2.56 -2.33 2.37 4.50 US Treasury Note 3.625% 2.36% 0.0 0 US Treasury Note 1.625% 2.13% Prospectus Exp Ratio Turnover Ratio US Treasury Note 2.625% 2.12% City of Dover, Delaware Police Pension Plan 21

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Interm-Term Bond Index Signal Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 16 0 14 25 Total Return Rank, % 12 10 50 Total Return, % 8 75 6 4 100 2 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 0 Up/Down Market Capture Ratio -2 Oct-10 - Sep-13 100 -4 90 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 80 Up Mkt Capture Ratio, % Vanguard Interm-Term Bond Index Signal Barclays US Govt 5-10 Yr TR USD 70 60 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 50 Vanguard Interm-Term Bond Index Signal 5.65 5.22 1.75 3.91 7.66 5.01 6.89 9.48 10.73 7.02 40 Barclays US Govt 5-10 Yr TR USD 2.48 4.50 2.25 3.33 9.84 15.38 -3.55 8.62 12.98 3.72 30 20 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 10 2 1.0 5 3 0 0 10 20 30 40 50 60 70 80 90 100 0.9 Down Mkt Capture Ratio, % 0.8 4 Morningstar IntermTerm Bond Index Universe Vanguard Interm-Term Bond Index Signal Total Annualized StdDev, % Excess Annualized StdDev, % 0.7 2 Barclays US Govt 5-10 Yr TR USD 0.6 3 Alpha, % Sharpe Ratio 1 0.5 0.4 2 Return vs. Risk 1 0.3 Oct-10 - Sep-13 4 0.2 1 0.1 Total Annualized Return, % 3 0 0.0 0 0 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile Vanguard Interm-Term Bond Index Signal Barclays US Govt 5-10 Yr TR USD 2 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error 1 Vanguard Interm-Term Bond Index Signal 1.16 0.84 84.15 0.81 4.59 1.99 Barclays US Govt 5-10 Yr TR USD 0.00 1.00 100.00 0.60 4.99 0.00 Universe(5%) 1.10 0.66 89.12 0.93 3.58 2.66 0 0 1 2 3 4 5 Universe(25%) 0.98 0.54 86.90 0.89 2.86 2.61 Total Annualized StdDev, % Universe(Median) 0.93 0.53 85.85 0.88 2.83 2.60 Universe(75%) 0.77 0.52 84.65 0.83 2.80 2.56 Morningstar IntermTerm Bond Index Universe Vanguard Interm-Term Bond Index Signal Universe(95%) 0.69 0.52 82.54 0.78 2.79 2.27 Cash Barclays US Govt 5-10 Yr TR USD City of Dover, Delaware Police Pension Plan 22

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Long-Term Bond Index I Portfolio Information Investment Strategy Summary % Cash 14.14 Ticker VBLLX % US Stocks Morningstar Category Long-term Bond % Bonds The investment seeks to track the performance of a market-weighted bond index with a Avg Mkt Cap $MM NA % Non-US Stocks long-term dollar-weighted average maturity. The fund employs an indexing investment Cat Med Mkt Cap $MM NA approach designed to track the performance of the Barclays U.S. Long Government/Credit % Pref Net Assets $MM 5621.45 Float Adjusted Index. This Index includes all medium and larger issues of U.S. % Conv Turnover Ratio 41.00 government, investment-grade corporate, and investment-grade international % Other % Assets in Top 10 Holdings 18.41 dollar-denominated bonds that have maturities of greater than 10 years and are publicly % Non-US Bonds Total Number of Holdings 1571.00 issued. All of the fund's investments will be selected through the sampling process, and at Manager Name Joshua C. Barrickman least 80% of the fund's assets will be invested in bonds held in the index. 85.29 Manager Tenure 0.60 _______________________________________________________________________ Fund Incept Date 03/01/1994 __ Prospectus Exp Ratio 0.07 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States NA % Cash 0.50 15 % Canada NA % US Stocks 0.00 % Latin America NA % Bonds 85.29 % United Kingdom NA % Non-US Stocks 0.00 10 % Eurozone NA % Pref 0.07 Portfolio Ratings % Europe - ex Euro NA % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging NA % Other 0.00 3 Year Mstar Rating % Africa NA % Non-US Bonds 14.14 % Rank Cat 3 Yr 73 5 % Middle East NA 5 Year Mstar Rating % Japan NA % Rank Cat 5 Yr 78 % Australasia NA 10 Year Mstar Rating 0 % Asia - Developed NA % Rank Cat 10 Yr 45 % Asia - Emerging NA -5 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 2 400 % Basic Materials NA Avg Eff Duration 14.13 % Communication Services NA Effective Maturity 24.00 -10 % Consumer Cyclical NA Avg Credit Quality A 350 % Consumer Defensive NA AAA 40.09 % Healthcare NA AA 7.27 -15 % Industrials NA A 25.15 300 3 Months YTD 1 Year 3 Years 5 Years % Real Estate NA BBB 27.49 % Technology NA BB 0.00 250 5th to 25th Percentile 25th to Median % Energy NA B 0.00 Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services NA Below B 0.00 Vanguard Long-Term Bond Index I BC Long Government/Credit % Utilities NA NR/NA 0.00 1 200 Turnover Performance 3 Year to 1 3 5 Top Ten Holdings 150 Months Date Year Years Years US Treasury Bond 3.125% 2.28% Vanguard Long-Term Bond Index I -0.98 -8.60 -8.44 4.70 9.08 US Treasury Bond 4.25% 2.18% 100 BC Long Government/Credit -0.83 -8.74 -8.33 4.71 9.07 US Treasury Bond 2.75% 1.93% Universe(5%) 1.35 0.88 3.23 7.75 14.95 US Treasury Bond 4.375% 1.88% Universe(25%) 0.71 -1.57 -0.59 5.50 10.36 US Treasury Bond 4.75% 1.84% 50 Universe(Median) 0.19 -4.08 -3.06 4.69 9.19 US Treasury Bond 2.75% 1.77% Universe(75%) -0.36 -6.70 -5.68 4.22 8.41 US Treasury Bond 4.625% 1.71% Universe(95%) -2.11 -10.80 -11.13 2.14 4.47 US Treasury Bond 4.375% 1.65% 0 0 US Treasury Bond 4.375% 1.63% Prospectus Exp Ratio Turnover Ratio US Treasury Bond 3.125% 1.54% City of Dover, Delaware Police Pension Plan 23

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Long-Term Bond Index I Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 40 0 30 25 Total Return Rank, % 20 50 Total Return, % 10 75 0 100 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -10 Up/Down Market Capture Ratio -20 Oct-10 - Sep-13 250 -30 225 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 200 Up Mkt Capture Ratio, % Vanguard Long-Term Bond Index I BC Long Government/Credit 175 150 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 125 Vanguard Long-Term Bond Index I 5.50 8.40 5.32 2.75 6.71 8.77 1.91 10.43 22.23 8.63 100 BC Long Government/Credit 5.87 8.56 5.33 2.71 6.60 8.44 1.92 10.16 22.49 8.78 75 50 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 25 7 2 14 14 0 -100 -50 0 50 100 150 200 250 6 12 12 Down Mkt Capture Ratio, % 5 Morningstar Long Term Bond Universe Vanguard Long-Term Bond Index I Excess Annualized StdDev, % 10 10 Total Annualized StdDev, % 4 BC Long Government/Credit Sharpe Ratio 3 8 8 Alpha, % 1 2 6 6 Return vs. Risk 1 4 4 Oct-10 - Sep-13 0 9 2 2 8 -1 Total Annualized Return, % 7 -2 0 0 0 6 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile Vanguard Long-Term Bond Index I BC Long Government/Credit 5 4 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error 2 Vanguard Long-Term Bond Index I -0.05 1.01 99.31 0.52 9.45 0.79 BC Long Government/Credit 0.00 1.00 100.00 0.53 9.31 0.00 1 Universe(5%) 6.39 1.35 95.56 1.67 13.19 13.53 0 0 5 10 15 20 25 Universe(25%) 3.53 0.77 79.63 0.98 8.15 8.85 Total Annualized StdDev, % Universe(Median) 2.33 0.39 60.36 0.78 5.92 7.00 Universe(75%) 0.43 0.19 34.52 0.56 4.87 4.91 Morningstar Long Term Bond Universe Vanguard Long-Term Bond Index I Universe(95%) -1.37 0.02 2.99 0.44 2.04 1.89 Cash BC Long Government/Credit City of Dover, Delaware Police Pension Plan 24

Quarterly Investment Monitor Data as of 09/30/2013 PIMCO Long Duration Total Return Instl 6.97 Portfolio Information Investment Strategy Summary % Cash 20.75 Ticker PLRIX % US Stocks Morningstar Category Long-term Bond % Bonds The investment seeks maximum total return, consistent with prudent investment Avg Mkt Cap $MM 65992.63 % Non-US Stocks management. The fund invests at least 65% of its total assets in a diversified portfolio of Cat Med Mkt Cap $MM NA Fixed Income Instruments of varying maturities, which may be represented by forwards or % Pref Net Assets $MM 5782.12 derivatives such as options, futures contracts or swap agreements. It invests primarily in % Conv Turnover Ratio 81.00 investment grade debt securities, but may invest up to 10% of its total assets in high yield % Other % Assets in Top 10 Holdings 33.49 securities ("junk bonds") that are rated B or higher by Moody's, or equivalently rated by % Non-US Bonds Total Number of Holdings 858.00 S&P or Fitch, or, if unrated, determined by PIMCO to be of comparable quality. Manager Name Stephen A. Rodosky _______________________________________________________________________ 71.80 Manager Tenure 6.17 __ Fund Incept Date 08/31/2006 Prospectus Exp Ratio 0.50 Portfolio Region Portfolio Structure Phone Number 888-877-4626 Performance vs. Peer Group % United States 100.00 % Cash 6.97 15 % Canada 0.00 % US Stocks 0.00 % Latin America 0.00 % Bonds 71.80 % United Kingdom 0.00 % Non-US Stocks 0.00 10 % Eurozone 0.00 % Pref 0.26 Portfolio Ratings % Europe - ex Euro 0.00 % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging 0.00 % Other 0.22 3 Year Mstar Rating % Africa 0.00 % Non-US Bonds 20.75 % Rank Cat 3 Yr 83 5 % Middle East 0.00 5 Year Mstar Rating % Japan 0.00 % Rank Cat 5 Yr 53 % Australasia 0.00 10 Year Mstar Rating NA 0 % Asia - Developed 0.00 % Rank Cat 10 Yr NA % Asia - Emerging 0.00 -5 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 2 400 % Basic Materials 0.00 Avg Eff Duration 14.02 % Communication Services 0.00 Effective Maturity 21.39 -10 % Consumer Cyclical 0.00 Avg Credit Quality NA 350 % Consumer Defensive 0.00 AAA NA % Healthcare 0.00 AA NA -15 % Industrials 0.00 A NA 300 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 0.00 BBB NA % Technology 0.00 BB NA 250 5th to 25th Percentile 25th to Median % Energy 0.00 B NA Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 100.00 Below B NA PIMCO Long Duration Total Return Instl BC Long Government/Credit % Utilities 0.00 NR/NA NA 1 200 Turnover Performance 3 Year to 1 3 5 Top Ten Holdings 150 Months Date Year Years Years Fin Fut Euro$ Cme 06/15/15 10.89% PIMCO Long Duration Total Return Instl -0.65 -8.37 -7.97 4.28 10.40 US Treasury Bond 3.125% 5.21% 100 BC Long Government/Credit -0.83 -8.74 -8.33 4.71 9.07 US Treasury Bond 5.5% 3.23% Universe(5%) 1.35 0.88 3.23 7.75 14.95 US Treasury Bond 2.75% 2.72% Universe(25%) 0.71 -1.57 -0.59 5.50 10.36 US Treasury Bond 4.5% 2.43% 50 Universe(Median) 0.19 -4.08 -3.06 4.69 9.19 US Treasury Bond 4.25% 2.37% Universe(75%) -0.36 -6.70 -5.68 4.22 8.41 US Treasury Bond 3.125% 2.19% Universe(95%) -2.11 -10.80 -11.13 2.14 4.47 U S Treas Bd Stripped Prin Pmt 1.57% 0 0 Quebec Prov Cda 5.75% 1.48% Prospectus Exp Ratio Turnover Ratio US Treasury Bond 5.25% 1.39% City of Dover, Delaware Police Pension Plan 25

Quarterly Investment Monitor Data as of 09/30/2013 PIMCO Long Duration Total Return Instl Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 40 0 30 25 Total Return Rank, % 20 50 Total Return, % 10 75 0 100 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -10 Up/Down Market Capture Ratio -20 Oct-10 - Sep-13 250 -30 225 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 200 Up Mkt Capture Ratio, % PIMCO Long Duration Total Return Instl BC Long Government/Credit 175 150 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 125 PIMCO Long Duration Total Return Instl NA NA NA NA 7.83 12.38 5.62 11.64 18.57 10.28 100 BC Long Government/Credit 5.87 8.56 5.33 2.71 6.60 8.44 1.92 10.16 22.49 8.78 75 50 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 25 7 2 14 14 0 -100 -50 0 50 100 150 200 250 6 12 12 Down Mkt Capture Ratio, % 5 Morningstar Long Term Bond Universe PIMCO Long Duration Total Return Instl Excess Annualized StdDev, % 10 10 Total Annualized StdDev, % 4 BC Long Government/Credit Sharpe Ratio 3 8 8 Alpha, % 1 2 6 6 Return vs. Risk 1 4 4 Oct-10 - Sep-13 0 9 2 2 8 -1 Total Annualized Return, % 7 -2 0 0 0 6 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile PIMCO Long Duration Total Return Instl BC Long Government/Credit 5 4 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error 2 PIMCO Long Duration Total Return Instl 0.02 0.90 94.30 0.52 8.62 2.26 BC Long Government/Credit 0.00 1.00 100.00 0.53 9.31 0.00 1 Universe(5%) 6.39 1.35 95.56 1.67 13.19 13.53 0 0 5 10 15 20 25 Universe(25%) 3.53 0.77 79.63 0.98 8.15 8.85 Total Annualized StdDev, % Universe(Median) 2.33 0.39 60.36 0.78 5.92 7.00 Universe(75%) 0.43 0.19 34.52 0.56 4.87 4.91 Morningstar Long Term Bond Universe PIMCO Long Duration Total Return Instl Universe(95%) -1.37 0.02 2.99 0.44 2.04 1.89 Cash BC Long Government/Credit City of Dover, Delaware Police Pension Plan 26

Quarterly Investment Monitor Data as of 09/30/2013 Ivy High Income I 11.72 Portfolio Information Investment Strategy Summary % Cash Ticker IVHIX % US Stocks Morningstar Category High Yield Bond % Bonds The investment seeks to provide total return through a combination of high current income Avg Mkt Cap $MM NA % Non-US Stocks and capital appreciation. The fund invests primarily in a diversified portfolio of high-yield, 37.97 Cat Med Mkt Cap $MM 11135.61 high-risk, fixed income securities, including secured and unsecured loan assignments, loan % Pref Net Assets $MM 8665.75 participations and other loan instruments (loans), of U.S. and foreign issuers, the risks of % Conv Turnover Ratio 68.00 which are, in the judgment of the adviser consistent with the fund's objective. It invests % Other % Assets in Top 10 Holdings 20.35 primarily in lower quality debt securities, which include debt securities rated BBB+ or % Non-US Bonds Total Number of Holdings 320.00 lower. 48.25 Manager Name Bryan C. Krug _______________________________________________________________________ Manager Tenure 7.62 1.96 __ Fund Incept Date 07/31/1997 Prospectus Exp Ratio 0.70 Portfolio Region Portfolio Structure Phone Number 800-777-6472 Performance vs. Peer Group % United States 100.00 % Cash 11.72 14 % Canada 0.00 % US Stocks 0.03 % Latin America 0.00 % Bonds 48.25 % United Kingdom 0.00 % Non-US Stocks 0.00 12 % Eurozone 0.00 % Pref 0.00 Portfolio Ratings % Europe - ex Euro 0.00 % Conv 0.07 Mstar Rating Total Annualized Return, % % Europe - Emerging 0.00 % Other 1.96 3 Year Mstar Rating 10 % Africa 0.00 % Non-US Bonds 37.97 % Rank Cat 3 Yr 1 % Middle East 0.00 5 Year Mstar Rating % Japan 0.00 % Rank Cat 5 Yr 2 8 % Australasia 0.00 10 Year Mstar Rating % Asia - Developed 0.00 % Rank Cat 10 Yr 5 % Asia - Emerging 0.00 6 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 4 2 160 % Basic Materials NA Avg Eff Duration 4.10 % Communication Services NA Effective Maturity 5.24 % Consumer Cyclical NA Avg Credit Quality B 2 140 % Consumer Defensive NA AAA 0.00 % Healthcare NA AA 0.06 0 % Industrials NA A 0.45 120 3 Months YTD 1 Year 3 Years 5 Years % Real Estate NA BBB 0.72 % Technology NA BB 10.09 100 5th to 25th Percentile 25th to Median % Energy NA B 53.93 Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services NA Below B 27.26 Ivy High Income I BC High Yield Corporate Bond % Utilities NA NR/NA 7.49 1 80 Turnover Performance 3 Year to 1 3 5 Top Ten Holdings 60 Months Date Year Years Years Laureate Educ 144A 9.25% 3.05% Ivy High Income I 2.97 6.86 10.66 11.68 13.94 Us Foods 8.5% 2.71% 40 BC High Yield Corporate Bond 2.28 3.73 7.14 9.19 13.53 Magic 2 Lien (Misys Plc) 2.50% Universe(5%) 3.28 7.29 11.25 10.47 13.14 Us Foods Senior Secured 2.27% Universe(25%) 2.50 4.52 7.96 8.96 12.09 Fmg Resources Pty Ltd 2.19% 20 Universe(Median) 2.12 3.45 6.60 8.21 11.21 Formula 1 (Proj Green Ii) 2.03% Universe(75%) 1.85 2.63 5.57 7.68 10.18 Hd Sply 11.5% 1.55% Universe(95%) 1.35 1.34 3.58 6.05 8.13 Delta 2 Sarl Tl 1l 1.47% 0 0 Delta 2 Sarl Tl 1l 1.31% Prospectus Exp Ratio Turnover Ratio Aa Bond Co Ltd 144a 1.28% City of Dover, Delaware Police Pension Plan 27

Quarterly Investment Monitor Data as of 09/30/2013 Ivy High Income I Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 80 0 25 Total Return Rank, % 60 50 40 Total Return, % 75 20 100 0 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -20 Up/Down Market Capture Ratio Oct-10 - Sep-13 140 -40 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 120 Up Mkt Capture Ratio, % Ivy High Income I BC High Yield Corporate Bond 100 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 80 Ivy High Income I 18.10 7.58 0.59 9.69 4.05 -19.73 46.56 15.62 6.44 17.16 60 BC High Yield Corporate Bond 28.97 11.13 2.74 11.85 1.87 -26.16 58.21 15.12 4.98 15.81 40 20 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 5 3 9 5 0 0 20 40 60 80 100 120 140 160 180 8 4 Down Mkt Capture Ratio, % 4 7 3 Morningstar High Yield Universe Ivy High Income I Total Annualized StdDev, % Excess Annualized StdDev, % 2 6 BC High Yield Corporate Bond 2 3 Sharpe Ratio 5 Alpha, % 1 4 2 Return vs. Risk 0 1 3 Oct-10 - Sep-13 -1 12 2 1 -2 1 10 Total Annualized Return, % -3 0 0 0 8 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile Ivy High Income I BC High Yield Corporate Bond 6 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 4 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error Ivy High Income I 4.42 0.75 95.17 2.18 5.10 2.00 2 BC High Yield Corporate Bond 0.00 1.00 100.00 1.35 6.63 0.00 Universe(5%) 2.12 1.25 99.23 1.76 8.93 4.37 0 0 2 4 6 8 10 12 14 Universe(25%) 0.24 1.08 98.66 1.35 7.20 2.04 Total Annualized StdDev, % Universe(Median) -0.83 0.99 97.62 1.21 6.67 1.22 Universe(75%) -1.47 0.90 93.31 1.12 6.11 0.87 Morningstar High Yield Universe Ivy High Income I Universe(95%) -2.89 0.61 78.40 0.90 4.38 0.65 Cash BC High Yield Corporate Bond City of Dover, Delaware Police Pension Plan 28

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Equity-Income Adm 2.60 Portfolio Information Investment Strategy Summary 10.73 % Cash Ticker VEIRX % US Stocks Morningstar Category Large Value % Bonds The investment seeks to provide an above-average level of current income and reasonable Avg Mkt Cap $MM 71562.86 % Non-US Stocks long-term capital appreciation. The fund invests mainly in common stocks of mid-size and Cat Med Mkt Cap $MM 73259.36 large companies whose stocks pay above-average levels of dividend income and are % Pref Net Assets $MM 13972.66 considered to have the potential for capital appreciation. In addition, the advisors % Conv Turnover Ratio 26.00 generally look for companies that they believe are committed to paying dividends % Other % Assets in Top 10 Holdings 30.18 consistently. Under normal circumstances, it will invest at least 80% of its assets in equity % Non-US Bonds Total Number of Holdings 149.00 securities. The fund uses multiple investment advisors. Manager Name James P. Stetler _______________________________________________________________________ 85.88 Manager Tenure 9.76 __ Fund Incept Date 03/21/1988 Prospectus Exp Ratio 0.21 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States 88.89 % Cash 2.60 30 % Canada 1.30 % US Stocks 85.88 % Latin America 0.00 % Bonds 0.00 % United Kingdom 4.22 % Non-US Stocks 10.73 25 % Eurozone 3.43 % Pref 0.00 Portfolio Ratings % Europe - ex Euro 2.16 % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging 0.00 % Other 0.79 3 Year Mstar Rating % Africa 0.00 % Non-US Bonds 0.00 % Rank Cat 3 Yr 4 20 % Middle East 0.00 5 Year Mstar Rating % Japan 0.00 % Rank Cat 5 Yr 12 % Australasia 0.00 10 Year Mstar Rating 15 % Asia - Developed 0.00 % Rank Cat 10 Yr 7 % Asia - Emerging 0.00 10 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 2 180 % Basic Materials 3.67 Avg Eff Duration NA % Communication Services 4.83 Effective Maturity NA 5 % Consumer Cyclical 7.19 Avg Credit Quality NA 160 % Consumer Defensive 12.43 AAA NA % Healthcare 13.48 AA NA 140 0 % Industrials 12.38 A NA 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 0.00 BBB NA % Technology 12.42 BB NA 120 5th to 25th Percentile 25th to Median % Energy 12.39 B NA Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 14.71 Below B NA 100 Vanguard Equity-Income Adm S&P 500 Value % Utilities 6.51 NR/NA NA 1 Turnover 80 Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years Johnson & Johnson 3.84% 60 Vanguard Equity-Income Adm 3.62 19.45 19.61 17.88 10.68 Chevron Corp 3.63% S&P 500 Value 3.84 20.17 22.15 15.86 8.38 Exxon Mobil Corporation 3.50% 40 Universe(5%) 7.03 25.75 29.44 18.47 11.90 Microsoft Corporation 3.48% Universe(25%) 5.54 22.67 25.09 16.30 10.18 Wells Fargo & Co 3.29% 20 Universe(Median) 4.64 20.61 22.24 15.23 9.04 JPMorgan Chase & Co 3.01% Universe(75%) 3.89 19.04 19.58 13.78 7.81 Merck & Co Inc 2.69% Universe(95%) 2.75 14.70 13.70 11.21 6.14 General Electric Co 2.57% 0 0 Pfizer Inc 2.20% Prospectus Exp Ratio Turnover Ratio AT&T Inc 1.97% City of Dover, Delaware Police Pension Plan 29

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Equity-Income Adm Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 50 0 40 25 Total Return Rank, % 30 20 50 Total Return, % 10 75 0 -10 100 -20 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -30 Up/Down Market Capture Ratio -40 Oct-10 - Sep-13 180 -50 160 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Up Mkt Capture Ratio, % 140 Vanguard Equity-Income Adm S&P 500 Value 120 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 100 Vanguard Equity-Income Adm 25.24 13.69 4.52 20.77 4.99 -30.86 17.26 14.99 10.69 13.58 80 S&P 500 Value 30.36 15.03 8.71 20.80 1.99 -39.22 21.18 15.10 -0.48 17.68 60 40 20 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 6 2 18 7 0 0 20 40 60 80 100 120 140 160 180 5 16 6 Down Mkt Capture Ratio, % 4 14 Morningstar Large Value Universe Vanguard Equity-Income Adm Excess Annualized StdDev, % 3 5 Total Annualized StdDev, % 12 S&P 500 Value 2 Sharpe Ratio 10 4 Alpha, % 1 1 0 8 3 Return vs. Risk -1 6 2 Oct-10 - Sep-13 -2 4 30 -3 1 2 25 Total Annualized Return, % -4 -5 0 0 0 20 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile Vanguard Equity-Income Adm S&P 500 Value 15 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 10 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error Vanguard Equity-Income Adm 5.28 0.75 92.18 1.59 10.69 4.53 5 S&P 500 Value 0.00 1.00 100.00 1.14 13.67 0.00 Universe(5%) 4.53 1.19 98.84 1.50 16.49 6.62 0 0 5 10 15 20 25 Universe(25%) 1.27 1.04 97.54 1.22 14.53 4.36 Total Annualized StdDev, % Universe(Median) -0.03 0.97 95.91 1.12 13.43 3.13 Universe(75%) -1.46 0.88 92.52 1.02 12.27 2.29 Morningstar Large Value Universe Vanguard Equity-Income Adm Universe(95%) -4.29 0.67 84.56 0.81 9.78 1.65 Cash S&P 500 Value City of Dover, Delaware Police Pension Plan 30

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Morgan Growth Adm 3.67 4.46 Portfolio Information Investment Strategy Summary % Cash Ticker VMRAX % US Stocks Morningstar Category Large Growth % Bonds The investment seeks long-term growth of capital. The fund invests mainly in the stocks of Avg Mkt Cap $MM 34583.13 % Non-US Stocks mid- and large-capitalization U.S. companies whose revenues and/or earnings are Cat Med Mkt Cap $MM 56784.53 expected to grow faster than those of the average company in the market. It uses multiple % Pref Net Assets $MM 9941.09 investment advisors. % Conv Turnover Ratio 49.00 % Other % Assets in Top 10 Holdings 17.04 _______________________________________________________________________ % Non-US Bonds Total Number of Holdings 331.00 __ Manager Name James P. Stetler Manager Tenure 9.76 91.87 Fund Incept Date 12/31/1968 Prospectus Exp Ratio 0.26 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States 95.37 % Cash 3.67 30 % Canada 0.64 % US Stocks 91.87 % Latin America 0.00 % Bonds 0.00 % United Kingdom 0.56 % Non-US Stocks 4.46 25 % Eurozone 1.47 % Pref 0.00 Portfolio Ratings % Europe - ex Euro 1.09 % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging 0.00 % Other 0.00 3 Year Mstar Rating % Africa 0.00 % Non-US Bonds 0.00 % Rank Cat 3 Yr 41 20 % Middle East 0.51 5 Year Mstar Rating % Japan 0.00 % Rank Cat 5 Yr 40 % Australasia 0.11 10 Year Mstar Rating 15 % Asia - Developed 0.26 % Rank Cat 10 Yr 33 % Asia - Emerging 0.00 10 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 2 300 % Basic Materials 3.53 Avg Eff Duration NA % Communication Services 2.71 Effective Maturity NA 5 % Consumer Cyclical 19.26 Avg Credit Quality NA % Consumer Defensive 7.05 AAA NA 250 % Healthcare 15.57 AA NA 0 % Industrials 13.11 A NA 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 0.38 BBB NA % Technology 27.14 BB NA 200 5th to 25th Percentile 25th to Median % Energy 4.45 B NA Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 6.80 Below B NA Vanguard Morgan Growth Adm S&P 500 Growth % Utilities 0.00 NR/NA NA 1 150 Turnover Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years Google, Inc. Class A 2.70% 100 Vanguard Morgan Growth Adm 8.71 22.02 20.86 15.78 10.95 Cisco Systems Inc 2.68% S&P 500 Growth 6.60 19.44 17.00 16.73 11.58 Microsoft Corporation 2.14% Universe(5%) 13.89 28.81 29.58 19.02 15.43 Apple Inc 2.05% 50 Universe(25%) 10.80 23.15 23.10 16.90 12.27 Wal-Mart Stores Inc 1.34% Universe(Median) 8.99 20.99 20.13 15.34 10.38 Monsanto Company 1.29% Universe(75%) 7.45 18.80 17.74 13.65 9.08 Home Depot, Inc. 1.27% Universe(95%) 5.13 15.81 14.03 11.28 6.68 Costco Wholesale Corporation 1.22% 0 0 TJX Companies 1.18% Prospectus Exp Ratio Turnover Ratio Biogen Idec Inc 1.17% City of Dover, Delaware Police Pension Plan 31

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Morgan Growth Adm Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 60 0 25 Total Return Rank, % 40 50 20 Total Return, % 75 0 100 -20 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -40 Up/Down Market Capture Ratio Oct-10 - Sep-13 250 -60 225 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 200 Up Mkt Capture Ratio, % Vanguard Morgan Growth Adm S&P 500 Growth 175 150 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 125 Vanguard Morgan Growth Adm 33.91 10.61 9.31 11.32 11.36 -41.33 36.31 18.90 -2.42 15.25 100 S&P 500 Growth 27.08 6.97 1.14 11.01 9.13 -34.92 31.57 15.05 4.65 14.61 75 50 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 25 1 2 18 9 0 0 25 50 75 100 125 150 175 200 225 250 0 16 8 Down Mkt Capture Ratio, % -1 14 7 Morningstar Large Growth Universe Vanguard Morgan Growth Adm Total Annualized StdDev, % Excess Annualized StdDev, % -2 12 6 S&P 500 Growth Sharpe Ratio -3 10 5 Alpha, % 1 -4 8 4 Return vs. Risk -5 6 3 Oct-10 - Sep-13 -6 4 2 35 -7 2 1 30 Total Annualized Return, % -8 0 0 0 25 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile 20 Vanguard Morgan Growth Adm S&P 500 Growth 15 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error 10 Vanguard Morgan Growth Adm -3.96 1.22 94.40 1.08 14.54 4.27 5 S&P 500 Growth 0.00 1.00 100.00 1.39 11.60 0.00 Universe(5%) 0.35 1.38 96.47 1.35 17.06 8.35 0 0 5 10 15 20 25 30 Universe(25%) -1.82 1.22 93.94 1.19 15.05 5.44 Total Annualized StdDev, % Universe(Median) -3.39 1.17 92.24 1.10 14.09 4.47 Universe(75%) -5.13 1.10 88.98 0.97 13.26 3.73 Morningstar Large Growth Universe Vanguard Morgan Growth Adm Universe(95%) -7.73 0.95 80.39 0.78 11.60 2.60 Cash S&P 500 Growth City of Dover, Delaware Police Pension Plan 32

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard PRIMECAP Inv 4.77 Portfolio Information Investment Strategy Summary 12.10 % Cash Ticker VPMCX % US Stocks Morningstar Category Large Growth % Bonds The investment seeks long-term capital appreciation. The fund invests in stocks Avg Mkt Cap $MM 51900.61 % Non-US Stocks considered to have above-average earnings growth potential that is not reflected in their Cat Med Mkt Cap $MM 56784.53 current market prices. Its portfolio consists predominantly of large- and mid-capitalization % Pref Net Assets $MM 36188.11 stocks. % Conv Turnover Ratio 6.00 % Other % Assets in Top 10 Holdings 41.27 _______________________________________________________________________ % Non-US Bonds Total Number of Holdings 131.00 __ Manager Name Joel P. Fried 83.13 Manager Tenure 24.77 Fund Incept Date 11/01/1984 Prospectus Exp Ratio 0.45 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States 87.29 % Cash 4.77 30 % Canada 1.66 % US Stocks 83.13 % Latin America 0.04 % Bonds 0.00 % United Kingdom 0.79 % Non-US Stocks 12.10 25 % Eurozone 1.01 % Pref 0.00 Portfolio Ratings % Europe - ex Euro 8.54 % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging 0.00 % Other 0.00 3 Year Mstar Rating % Africa 0.00 % Non-US Bonds 0.00 % Rank Cat 3 Yr 26 20 % Middle East 0.00 5 Year Mstar Rating % Japan 0.66 % Rank Cat 5 Yr 39 % Australasia 0.00 10 Year Mstar Rating 15 % Asia - Developed 0.00 % Rank Cat 10 Yr 7 % Asia - Emerging 0.00 10 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 2 300 % Basic Materials 3.15 Avg Eff Duration NA % Communication Services 1.73 Effective Maturity NA 5 % Consumer Cyclical 5.65 Avg Credit Quality NA % Consumer Defensive 0.68 AAA NA 250 % Healthcare 32.91 AA NA 0 % Industrials 13.65 A NA 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 0.00 BBB NA % Technology 31.66 BB NA 200 5th to 25th Percentile 25th to Median % Energy 4.07 B NA Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 6.36 Below B NA Vanguard PRIMECAP Inv S&P 500 Growth % Utilities 0.13 NR/NA NA 1 150 Turnover Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years Biogen Idec Inc 6.63% 100 Vanguard PRIMECAP Inv 7.29 26.39 29.63 16.71 10.99 Amgen Inc 5.39% S&P 500 Growth 6.60 19.44 17.00 16.73 11.58 Google, Inc. Class A 4.30% Universe(5%) 13.89 28.81 29.58 19.02 15.43 Roche Holding AG 4.30% 50 Universe(25%) 10.80 23.15 23.10 16.90 12.27 Microsoft Corporation 3.89% Universe(Median) 8.99 20.99 20.13 15.34 10.38 Eli Lilly and Company 3.68% Universe(75%) 7.45 18.80 17.74 13.65 9.08 FedEx Corporation 3.48% Universe(95%) 5.13 15.81 14.03 11.28 6.68 Texas Instruments, Inc. 3.47% 0 0 Adobe Systems Inc 3.12% Prospectus Exp Ratio Turnover Ratio Novartis AG ADR 3.02% City of Dover, Delaware Police Pension Plan 33

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard PRIMECAP Inv Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 60 0 25 Total Return Rank, % 40 50 20 Total Return, % 75 0 100 -20 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -40 Up/Down Market Capture Ratio Oct-10 - Sep-13 250 -60 225 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 200 Up Mkt Capture Ratio, % Vanguard PRIMECAP Inv S&P 500 Growth 175 150 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 125 Vanguard PRIMECAP Inv 37.75 18.31 8.49 12.30 11.49 -32.41 34.45 12.89 -1.84 15.27 100 S&P 500 Growth 27.08 6.97 1.14 11.01 9.13 -34.92 31.57 15.05 4.65 14.61 75 50 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 25 1 2 18 9 0 0 25 50 75 100 125 150 175 200 225 250 0 16 8 Down Mkt Capture Ratio, % -1 14 7 Morningstar Large Growth Universe Vanguard PRIMECAP Inv Total Annualized StdDev, % Excess Annualized StdDev, % -2 12 6 S&P 500 Growth Sharpe Ratio -3 10 5 Alpha, % 1 -4 8 4 Return vs. Risk -5 6 3 Oct-10 - Sep-13 -6 4 2 35 -7 2 1 30 Total Annualized Return, % -8 0 0 0 25 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile 20 Vanguard PRIMECAP Inv S&P 500 Growth 15 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error 10 Vanguard PRIMECAP Inv -1.39 1.10 91.79 1.23 13.30 3.98 5 S&P 500 Growth 0.00 1.00 100.00 1.39 11.60 0.00 Universe(5%) 0.35 1.38 96.47 1.35 17.06 8.35 0 0 5 10 15 20 25 30 Universe(25%) -1.82 1.22 93.94 1.19 15.05 5.44 Total Annualized StdDev, % Universe(Median) -3.39 1.17 92.24 1.10 14.09 4.47 Universe(75%) -5.13 1.10 88.98 0.97 13.26 3.73 Morningstar Large Growth Universe Vanguard PRIMECAP Inv Universe(95%) -7.73 0.95 80.39 0.78 11.60 2.60 Cash S&P 500 Growth City of Dover, Delaware Police Pension Plan 34

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Mid-Cap Value Index Admiral 1.51 Portfolio Information Investment Strategy Summary % Cash Ticker VMVAX % US Stocks Morningstar Category Mid-Cap Value % Bonds The investment seeks to track the performance of a benchmark index that measures the Avg Mkt Cap $MM 8639.42 % Non-US Stocks investment return of mid-capitalization value stocks. The fund employs an indexing Cat Med Mkt Cap $MM 7873.53 investment approach designed to track the performance of the CRSP US Mid Cap Value % Pref Net Assets $MM 3959.52 Index, a broadly diversified index of value stocks of mid-size U.S. companies. It attempts % Conv Turnover Ratio 33.00 to replicate the target index by investing all, or substantially all, of its assets in the stocks % Other % Assets in Top 10 Holdings 10.77 that make up the index, holding each stock in approximately the same proportion as its % Non-US Bonds Total Number of Holdings 206.00 weighting in the index. Manager Name Donald M. Butler _______________________________________________________________________ Manager Tenure 7.13 98.07 __ Fund Incept Date 09/27/2011 Prospectus Exp Ratio 0.10 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States 98.48 % Cash 0.42 35 % Canada 0.00 % US Stocks 98.07 % Latin America 0.00 % Bonds 0.00 % United Kingdom 1.18 % Non-US Stocks 1.51 30 % Eurozone 0.00 % Pref 0.00 Portfolio Ratings % Europe - ex Euro 0.34 % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging 0.00 % Other 0.00 3 Year Mstar Rating 25 % Africa 0.00 % Non-US Bonds 0.00 % Rank Cat 3 Yr 31 % Middle East 0.00 5 Year Mstar Rating % Japan 0.00 % Rank Cat 5 Yr 20 20 % Australasia 0.00 10 Year Mstar Rating NA % Asia - Developed 0.00 % Rank Cat 10 Yr NA % Asia - Emerging 0.00 15 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 10 3 300 % Basic Materials 5.99 Avg Eff Duration NA % Communication Services 1.45 Effective Maturity NA % Consumer Cyclical 15.05 Avg Credit Quality NA 5 % Consumer Defensive 9.81 AAA NA 250 % Healthcare 9.06 AA NA 0 % Industrials 12.32 A NA 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 4.24 BBB NA % Technology 9.55 BB NA 2 200 5th to 25th Percentile 25th to Median % Energy 5.18 B NA Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 17.97 Below B NA Vanguard Mid-Cap Value Index Admiral CRSP US Mid Cap TR USD % Utilities 9.37 NR/NA NA 150 Turnover Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years Macy's Inc 1.30% 1 100 Vanguard Mid-Cap Value Index Admiral 6.52 24.52 28.94 17.07 12.90 Delta Air Lines Inc 1.27% CRSP US Mid Cap TR USD 7.71 24.53 28.08 17.30 12.66 Delphi Automotive PLC 1.18% Universe(5%) 10.72 31.12 34.37 20.30 15.07 ConAgra Foods, Inc. 1.06% 50 Universe(25%) 8.70 25.60 30.04 17.86 12.90 Boston Scientific, Inc. 1.03% Universe(Median) 7.50 23.12 27.27 16.50 12.15 Mattel, Inc. 1.02% Universe(75%) 6.58 20.84 24.09 14.82 10.01 Hartford Financial Services Group Inc 0.99% Universe(95%) 4.42 16.36 18.12 9.86 6.41 Regions Financial Corporation 0.99% 0 0 Northeast Utilities 0.98% Prospectus Exp Ratio Turnover Ratio M&T Bank Corp 0.95% City of Dover, Delaware Police Pension Plan 35

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Mid-Cap Value Index Admiral Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 80 0 60 25 Total Return Rank, % 40 50 Total Return, % 20 75 0 100 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -20 Up/Down Market Capture Ratio -40 Oct-10 - Sep-13 250 -60 225 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 200 Up Mkt Capture Ratio, % Vanguard Mid-Cap Value Index Admiral CRSP US Mid Cap TR USD 175 150 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 125 Vanguard Mid-Cap Value Index Admiral NA NA NA NA -4.28 -36.54 37.72 21.81 -0.30 16.02 100 CRSP US Mid Cap TR USD 35.96 20.28 13.31 15.32 7.04 -41.83 36.90 26.16 -1.79 16.69 75 50 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 25 3 2 20 9 0 0 25 50 75 100 125 150 175 200 225 2 18 8 Down Mkt Capture Ratio, % 1 16 7 Morningstar Midcap Blend Universe Vanguard Mid-Cap Value Index Admiral Total Annualized StdDev, % Excess Annualized StdDev, % 0 14 6 CRSP US Mid Cap TR USD -1 12 Sharpe Ratio 5 Alpha, % -2 1 10 4 -3 8 Return vs. Risk 3 -4 6 Oct-10 - Sep-13 2 30 -5 4 -6 2 1 25 Total Annualized Return, % -7 0 0 0 20 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile Vanguard Mid-Cap Value Index Admiral CRSP US Mid Cap TR USD 15 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 10 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error Vanguard Mid-Cap Value Index Admiral 0.23 0.97 97.67 1.18 14.17 2.19 5 CRSP US Mid Cap TR USD 0.00 1.00 100.00 1.18 14.39 0.00 Universe(5%) 2.85 1.31 98.51 1.37 19.61 8.98 0 0 5 10 15 20 25 30 35 Universe(25%) 0.57 1.12 97.49 1.16 16.39 5.53 Total Annualized StdDev, % Universe(Median) -1.17 1.07 95.23 1.08 15.53 3.75 Universe(75%) -3.17 0.95 91.87 0.97 14.53 2.76 Morningstar Midcap Blend Universe Vanguard Mid-Cap Value Index Admiral Universe(95%) -6.25 0.76 79.78 0.72 11.59 2.24 Cash CRSP US Mid Cap TR USD City of Dover, Delaware Police Pension Plan 36

Quarterly Investment Monitor Data as of 09/30/2013 Target Small Capitalization Value T 6.20 1.89 Portfolio Information Investment Strategy Summary % Cash Ticker TASVX % US Stocks Morningstar Category Small Value % Bonds The investment seeks above-average capital appreciation. The Portfolio seeks investments Avg Mkt Cap $MM 2156.13 % Non-US Stocks that will increase in value. It normally invests at least 80% of its investable assets in Cat Med Mkt Cap $MM 1928.09 common stocks of small companies. Small companies are those companies with market % Pref Net Assets $MM 1664.26 capitalizations comparable to those in the Russell 2000 Value Index. As of December 31, % Conv Turnover Ratio 37.00 2012, the Russell 2000 Value Index median market capitalization was approximately $472 % Other % Assets in Top 10 Holdings 8.85 million and the largest company by market capitalization was $4.664 billion. Market % Non-US Bonds Total Number of Holdings 669.00 capitalization is measured at the time of purchase. Manager Name Paul E. Viera, Jr. _______________________________________________________________________ Manager Tenure 11.76 __ 91.72 Fund Incept Date 01/05/1993 Prospectus Exp Ratio 0.68 Portfolio Region Portfolio Structure Phone Number 800-225-1852 Performance vs. Peer Group % United States 97.98 % Cash 6.20 40 % Canada 0.95 % US Stocks 91.72 % Latin America 0.14 % Bonds 0.00 35 % United Kingdom 0.02 % Non-US Stocks 1.89 % Eurozone 0.66 % Pref 0.00 Portfolio Ratings % Europe - ex Euro 0.00 % Conv 0.00 Mstar Rating Total Annualized Return, % 30 % Europe - Emerging 0.00 % Other 0.19 3 Year Mstar Rating % Africa 0.00 % Non-US Bonds 0.00 % Rank Cat 3 Yr 41 % Middle East 0.23 5 Year Mstar Rating 25 % Japan 0.00 % Rank Cat 5 Yr 37 % Australasia 0.00 10 Year Mstar Rating 20 % Asia - Developed 0.00 % Rank Cat 10 Yr 5 % Asia - Emerging 0.02 15 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 2 200 10 % Basic Materials 5.80 Avg Eff Duration NA % Communication Services 0.49 Effective Maturity NA % Consumer Cyclical 10.93 Avg Credit Quality NA 180 5 % Consumer Defensive 4.42 AAA NA % Healthcare 5.91 AA NA 160 0 % Industrials 23.63 A NA 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 4.87 BBB NA 140 % Technology 12.84 BB NA 5th to 25th Percentile 25th to Median % Energy 6.45 B NA Prospectus Exp Ratio 120 Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 21.23 Below B NA Target Small Capitalization Value T S&P 600 Value % Utilities 3.43 NR/NA NA 1 100 Turnover 80 Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years Bristow Group, Inc. 1.20% 60 Target Small Capitalization Value T 8.43 24.88 29.57 17.20 11.59 Hexcel Corporation 0.95% S&P 600 Value 9.53 27.71 31.78 19.97 11.48 Aaron's, Inc. 0.94% 40 Universe(5%) 10.95 30.05 37.11 20.84 16.87 Protective Life Corp 0.94% Universe(25%) 9.20 27.44 32.80 18.57 12.55 Silgan Holdings, Inc. 0.88% Universe(Median) 8.40 24.45 29.36 17.20 11.32 Littelfuse Inc. 0.82% 20 Universe(75%) 7.31 22.24 26.79 15.54 10.08 Firstmerit Corp 0.80% Universe(95%) 4.62 17.65 22.07 11.43 8.63 Group 1 Automotive Inc 0.79% 0 0 Raymond James Financial Inc 0.78% Prospectus Exp Ratio Turnover Ratio GATX Corp 0.76% City of Dover, Delaware Police Pension Plan 37

Quarterly Investment Monitor Data as of 09/30/2013 Target Small Capitalization Value T Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 80 0 60 25 Total Return Rank, % 40 50 Total Return, % 20 75 0 100 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -20 Up/Down Market Capture Ratio -40 Oct-10 - Sep-13 120 -60 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 100 Up Mkt Capture Ratio, % Target Small Capitalization Value T S&P 600 Value 80 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 60 Target Small Capitalization Value T 47.10 24.02 10.10 17.72 0.52 -27.45 26.69 23.63 -0.48 14.14 S&P 600 Value 40.03 23.25 6.45 19.57 -5.54 -29.51 22.85 24.72 -1.38 18.21 40 20 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 3 2 22 10 0 0 20 40 60 80 100 120 140 160 20 9 2 Down Mkt Capture Ratio, % 18 8 1 Morningstar SmallCap Value Universe Target Small Capitalization Value T Excess Annualized StdDev, % 16 Total Annualized StdDev, % 7 0 S&P 600 Value 14 6 Sharpe Ratio -1 Alpha, % 12 1 5 -2 10 4 Return vs. Risk 8 -3 3 Oct-10 - Sep-13 6 -4 30 4 2 -5 1 25 Total Annualized Return, % 2 -6 0 0 0 20 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile Target Small Capitalization Value T S&P 600 Value 15 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 10 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error Target Small Capitalization Value T -0.35 0.88 96.63 1.13 15.02 3.37 5 S&P 600 Value 0.00 1.00 100.00 1.17 16.69 0.00 Universe(5%) 2.36 1.16 98.05 1.28 20.04 9.05 0 0 5 10 15 20 25 Universe(25%) -0.50 1.05 96.82 1.10 17.90 5.10 Total Annualized StdDev, % Universe(Median) -1.89 0.95 95.39 1.03 16.39 4.17 Universe(75%) -3.21 0.91 92.86 0.95 15.54 3.12 Morningstar SmallCap Value Universe Target Small Capitalization Value T Universe(95%) -5.04 0.67 87.61 0.86 13.03 2.43 Cash S&P 600 Value City of Dover, Delaware Police Pension Plan 38

Quarterly Investment Monitor Data as of 09/30/2013 American Funds New Perspective R6 3.73 1.72 Portfolio Information Investment Strategy Summary % Cash Ticker RNPGX 44.16 % US Stocks Morningstar Category World Stock % Bonds The investment seeks long-term growth of capital; future income is a secondary objective. Avg Mkt Cap $MM 46827.29 % Non-US Stocks The fund seeks to take advantage of investment opportunities generated by changes in Cat Med Mkt Cap $MM 37045.94 international trade patterns and economic and political relationships by investing in % Pref Net Assets $MM 48763.42 common stocks of companies located around the world. In pursuing its primary % Conv Turnover Ratio 16.00 investment objective, it invests primarily in common stocks that the investment adviser % Other % Assets in Top 10 Holdings 18.52 believes have the potential for growth. In pursuing its secondary objective, the fund % Non-US Bonds Total Number of Holdings 271.00 invests in common stocks of companies with the potential to pay dividends in the future. Manager Name Gregg E. Ireland 50.14 _______________________________________________________________________ Manager Tenure 20.84 __ Fund Incept Date 03/13/1973 Prospectus Exp Ratio 0.46 Portfolio Region Portfolio Structure Phone Number 800-421-4225 Performance vs. Peer Group % United States 46.83 % Cash 3.73 30 % Canada 2.03 % US Stocks 44.16 % Latin America 0.70 % Bonds 0.24 % United Kingdom 8.87 % Non-US Stocks 50.14 25 % Eurozone 15.67 % Pref 0.00 Portfolio Ratings % Europe - ex Euro 10.32 % Conv 0.01 Mstar Rating Total Annualized Return, % % Europe - Emerging 0.00 % Other 1.72 3 Year Mstar Rating 20 % Africa 2.82 % Non-US Bonds 0.00 % Rank Cat 3 Yr 24 % Middle East 0.00 5 Year Mstar Rating % Japan 6.13 % Rank Cat 5 Yr 21 15 % Australasia 1.45 10 Year Mstar Rating % Asia - Developed 4.28 % Rank Cat 10 Yr 18 % Asia - Emerging 0.89 10 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 5 3 180 % Basic Materials 5.54 Avg Eff Duration NA % Communication Services 3.59 Effective Maturity NA % Consumer Cyclical 18.42 Avg Credit Quality NA 0 160 % Consumer Defensive 11.79 AAA NA % Healthcare 15.52 AA NA 140 -5 % Industrials 11.65 A NA 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 0.16 BBB NA % Technology 12.57 BB NA 2 120 5th to 25th Percentile 25th to Median % Energy 5.70 B NA Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 14.74 Below B NA 100 American Funds New Perspective R6 MSCI AC World Index ND USD % Utilities 0.33 NR/NA NA Turnover 80 Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years Novo Nordisk A/S 3.97% 1 60 American Funds New Perspective R6 8.35 17.12 22.05 12.77 10.45 Amazon.com Inc 2.48% MSCI AC World Index ND USD 7.90 14.43 17.73 10.21 7.71 Google, Inc. Class A 1.92% 40 Universe(5%) 12.17 24.07 29.22 14.96 12.45 Home Depot, Inc. 1.84% Universe(25%) 10.19 20.13 26.16 13.06 9.90 Naspers Ltd 1.55% 20 Universe(Median) 8.29 16.65 21.36 10.98 8.25 Bayer AG 1.46% Universe(75%) 6.55 12.89 15.69 8.82 6.72 CME Group, Inc. Class A 1.41% Universe(95%) 3.55 -1.47 4.25 2.40 3.16 Taiwan Semiconductor Manufacturing Co Ltd 1.41% 0 0 American Express Co 1.27% Prospectus Exp Ratio Turnover Ratio ACE Ltd 1.20% City of Dover, Delaware Police Pension Plan 39

Quarterly Investment Monitor Data as of 09/30/2013 American Funds New Perspective R6 Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 60 0 25 Total Return Rank, % 40 50 20 Total Return, % 75 0 100 -20 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -40 Up/Down Market Capture Ratio Oct-10 - Sep-13 140 -60 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 120 Up Mkt Capture Ratio, % American Funds New Perspective R6 MSCI AC World Index ND USD 100 80 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 60 American Funds New Perspective R6 36.76 14.27 11.28 19.87 16.03 -37.83 37.72 13.11 -7.33 21.19 MSCI AC World Index ND USD 33.99 15.23 10.84 20.95 11.66 -42.20 34.63 12.67 -7.35 16.13 40 20 0 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 6 2 20 12 -20 0 20 40 60 80 100 120 140 160 180 200 18 4 Down Mkt Capture Ratio, % 10 16 2 Morningstar World Stock Universe American Funds New Perspective R6 Total Annualized StdDev, % Excess Annualized StdDev, % 14 8 MSCI AC World Index ND USD 0 12 Alpha, % Sharpe Ratio -2 1 10 6 8 Return vs. Risk -4 4 6 Oct-10 - Sep-13 -6 25 4 2 -8 20 2 Total Annualized Return, % 15 -10 0 0 0 10 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile American Funds New Perspective R6 MSCI AC World Index ND USD 5 0 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr -5 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error -10 American Funds New Perspective R6 2.83 0.94 97.12 0.92 14.08 2.53 MSCI AC World Index ND USD 0.00 1.00 100.00 0.73 14.71 0.00 -15 Universe(5%) 5.88 1.18 97.29 1.14 18.74 11.22 -20 0 5 10 15 20 25 30 35 Universe(25%) 3.45 1.09 95.18 0.93 16.74 6.92 Total Annualized StdDev, % Universe(Median) 1.38 1.01 92.35 0.79 15.43 5.03 Universe(75%) -1.50 0.89 83.11 0.62 13.81 3.67 Morningstar World Stock Universe American Funds New Perspective R6 Universe(95%) -8.20 0.59 62.06 0.22 10.37 2.59 Cash MSCI AC World Index ND USD City of Dover, Delaware Police Pension Plan 40

Quarterly Investment Monitor Data as of 09/30/2013 Harding Loevner Global Equity Inst 2.34 Portfolio Information Investment Strategy Summary % Cash Ticker HLMVX % US Stocks Morningstar Category World Stock % Bonds The investment seeks long-term capital appreciation. The fund invests in companies based 55.13 Avg Mkt Cap $MM 34509.06 % Non-US Stocks in the U.S. and other developed markets, as well as in emerging and frontier markets. It Cat Med Mkt Cap $MM 37045.94 invests at least 80% of net assets in common stocks, preferred stock, rights and warrants % Pref Net Assets $MM 602.34 issued by companies that are based both inside and outside the United States, securities % Conv Turnover Ratio 32.00 convertible into such securities and investment companies that invest in the types of % Other % Assets in Top 10 Holdings 28.13 securities in which the fund would normally invest. The fund normally holds 35-75 41.69 % Non-US Bonds Total Number of Holdings 67.00 investments across at least 15 countries. Manager Name Peter J. Baughan _______________________________________________________________________ Manager Tenure 10.59 __ Fund Incept Date 11/29/1996 Prospectus Exp Ratio 0.95 Portfolio Region Portfolio Structure Phone Number 877-435-8105 Performance vs. Peer Group % United States 56.94 % Cash 0.84 30 % Canada 0.00 % US Stocks 55.13 % Latin America 2.67 % Bonds 0.00 % United Kingdom 6.65 % Non-US Stocks 41.69 25 % Eurozone 7.12 % Pref 0.00 Portfolio Ratings % Europe - ex Euro 7.60 % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging 1.85 % Other 2.34 3 Year Mstar Rating 20 % Africa 1.32 % Non-US Bonds 0.00 % Rank Cat 3 Yr 68 % Middle East 0.00 5 Year Mstar Rating % Japan 8.46 % Rank Cat 5 Yr 45 15 % Australasia 0.93 10 Year Mstar Rating % Asia - Developed 2.06 % Rank Cat 10 Yr 43 % Asia - Emerging 4.40 10 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 5 3 180 % Basic Materials 6.77 Avg Eff Duration NA % Communication Services 2.44 Effective Maturity NA % Consumer Cyclical 12.54 Avg Credit Quality NA 0 160 % Consumer Defensive 11.83 AAA NA % Healthcare 6.75 AA NA 140 -5 % Industrials 7.78 A NA 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 0.00 BBB NA % Technology 27.03 BB NA 2 120 5th to 25th Percentile 25th to Median % Energy 5.80 B NA Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 19.06 Below B NA 100 Harding Loevner Global Equity Inst MSCI AC World Index ND USD % Utilities 0.00 NR/NA NA Turnover 80 Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years Wells Fargo & Co 4.12% 1 60 Harding Loevner Global Equity Inst 8.24 12.17 13.37 9.86 8.99 Google, Inc. Class A 3.29% MSCI AC World Index ND USD 7.90 14.43 17.73 10.21 7.71 Microsoft Corporation 3.15% 40 Universe(5%) 12.17 24.07 29.22 14.96 12.45 eBay Inc 2.87% Universe(25%) 10.19 20.13 26.16 13.06 9.90 Nestle SA ADR 2.79% 20 Universe(Median) 8.29 16.65 21.36 10.98 8.25 Coach, Inc. 2.54% Universe(75%) 6.55 12.89 15.69 8.82 6.72 Schlumberger NV 2.44% Universe(95%) 3.55 -1.47 4.25 2.40 3.16 Unicharm Corp 2.44% 0 0 Dassault Systemes SA 2.28% Prospectus Exp Ratio Turnover Ratio JPMorgan Chase & Co 2.21% City of Dover, Delaware Police Pension Plan 41

Quarterly Investment Monitor Data as of 09/30/2013 Harding Loevner Global Equity Inst Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 60 0 25 Total Return Rank, % 40 50 20 Total Return, % 75 0 100 -20 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -40 Up/Down Market Capture Ratio Oct-10 - Sep-13 140 -60 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 120 Up Mkt Capture Ratio, % Harding Loevner Global Equity Inst MSCI AC World Index ND USD 100 80 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 60 Harding Loevner Global Equity Inst 31.51 7.61 16.65 17.84 16.39 -38.29 40.16 15.55 -8.22 17.42 MSCI AC World Index ND USD 33.99 15.23 10.84 20.95 11.66 -42.20 34.63 12.67 -7.35 16.13 40 20 0 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 6 2 20 12 -20 0 20 40 60 80 100 120 140 160 180 200 18 4 Down Mkt Capture Ratio, % 10 16 2 Morningstar World Stock Universe Harding Loevner Global Equity Inst Total Annualized StdDev, % Excess Annualized StdDev, % 14 8 MSCI AC World Index ND USD 0 12 Alpha, % Sharpe Ratio -2 1 10 6 8 Return vs. Risk -4 4 6 Oct-10 - Sep-13 -6 25 4 2 -8 20 2 Total Annualized Return, % 15 -10 0 0 0 10 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile Harding Loevner Global Equity Inst MSCI AC World Index ND USD 5 0 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr -5 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error -10 Harding Loevner Global Equity Inst 0.25 0.94 93.26 0.72 14.34 3.82 MSCI AC World Index ND USD 0.00 1.00 100.00 0.73 14.71 0.00 -15 Universe(5%) 5.88 1.18 97.29 1.14 18.74 11.22 -20 0 5 10 15 20 25 30 35 Universe(25%) 3.45 1.09 95.18 0.93 16.74 6.92 Total Annualized StdDev, % Universe(Median) 1.38 1.01 92.35 0.79 15.43 5.03 Universe(75%) -1.50 0.89 83.11 0.62 13.81 3.67 Morningstar World Stock Universe Harding Loevner Global Equity Inst Universe(95%) -8.20 0.59 62.06 0.22 10.37 2.59 Cash MSCI AC World Index ND USD City of Dover, Delaware Police Pension Plan 42

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Emerging Mkts Stock Idx I 1.89 Portfolio Information Investment Strategy Summary % Cash Ticker VEMIX % US Stocks Morningstar Category Diversified Emerging Mkts % Bonds The investment seeks to track the performance of a benchmark index that measures the Avg Mkt Cap $MM 17565.76 % Non-US Stocks investment return of stocks issued by companies located in emerging market countries. Cat Med Mkt Cap $MM 18214.07 The fund employs an indexing investment approach by investing substantially all % Pref Net Assets $MM 65717.91 (approximately 95%) of its assets in the common stocks included in the FTSE Emerging % Conv Turnover Ratio 8.00 Index, while employing a form of sampling to reduce risk. The FTSE Emerging Index % Other % Assets in Top 10 Holdings 13.34 includes approximately 851 common stocks of companies located in emerging markets % Non-US Bonds Total Number of Holdings 925.00 around the world. As of May 31, 2013, the largest markets covered in the index were Manager Name Michael Perre China, Brazil, Taiwan, and India. Manager Tenure 5.09 97.38 _______________________________________________________________________ Fund Incept Date 05/04/1994 __ Prospectus Exp Ratio 0.12 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States 0.25 % Cash 0.05 12 % Canada 0.00 % US Stocks 0.23 % Latin America 21.38 % Bonds 0.00 10 % United Kingdom 0.00 % Non-US Stocks 97.38 % Eurozone 0.10 % Pref 1.89 Portfolio Ratings 8 % Europe - ex Euro 0.00 % Conv 0.00 Mstar Rating Total Annualized Return, % 3 Year Mstar Rating 6 % Europe - Emerging 9.91 % Other 0.45 % Africa 9.78 % Non-US Bonds 0.00 % Rank Cat 3 Yr 59 4 % Middle East 0.57 5 Year Mstar Rating % Japan 0.00 % Rank Cat 5 Yr 44 2 % Australasia 0.00 10 Year Mstar Rating % Asia - Developed 13.69 % Rank Cat 10 Yr 35 0 % Asia - Emerging 44.33 -2 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group -4 3 180 % Basic Materials 9.70 Avg Eff Duration NA % Communication Services 10.81 Effective Maturity NA -6 % Consumer Cyclical 7.55 Avg Credit Quality NA 160 % Consumer Defensive 9.17 AAA NA -8 % Healthcare 1.60 AA NA 140 -10 % Industrials 5.84 A NA 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 2.50 BBB NA % Technology 11.30 BB NA 2 120 5th to 25th Percentile 25th to Median % Energy 11.39 B NA Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 26.38 Below B NA 100 Vanguard Emerging Mkts Stock Idx I FTSE Emerging NR USD % Utilities 3.77 NR/NA NA Turnover 80 Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years China Mobile Ltd. 1.81% 1 60 Vanguard Emerging Mkts Stock Idx I 4.82 -6.50 -0.10 -0.91 6.52 China Construction Bank Corp H Shares 1.76% FTSE Emerging NR USD 4.30 -5.26 0.17 -1.11 7.07 Industrial And Commercial Bank Of China Ltd. H Shares 1.55% 40 Universe(5%) 9.20 4.08 9.93 3.63 11.28 Taiwan Semiconductor Manufacturing Co Ltd ADR 1.39% Universe(25%) 7.07 -2.12 3.76 0.86 7.42 Tencent Holdings Ltd. 1.36% 20 Universe(Median) 5.64 -4.62 2.05 -0.65 6.09 Taiwan Semiconductor Manufacturing Co Ltd 1.23% Universe(75%) 3.64 -6.29 -0.33 -2.02 4.87 America Movil, S.A.B. de C.V. 1.12% Universe(95%) -0.30 -8.93 -6.05 -7.23 0.81 Naspers Ltd 1.07% 0 0 Bank Of China Ltd. H Shares 1.03% Prospectus Exp Ratio Turnover Ratio Mtn Group Limited 1.03% City of Dover, Delaware Police Pension Plan 43

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard Emerging Mkts Stock Idx I Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 120 0 100 25 Total Return Rank, % 80 60 50 Total Return, % 40 75 20 0 100 -20 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -40 Up/Down Market Capture Ratio -60 Oct-10 - Sep-13 225 -80 200 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Up Mkt Capture Ratio, % 175 Vanguard Emerging Mkts Stock Idx I FTSE Emerging NR USD 150 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 125 Vanguard Emerging Mkts Stock Idx I 57.97 26.24 32.35 29.57 39.15 -52.74 76.35 19.06 -18.63 18.90 100 FTSE Emerging NR USD 53.69 27.58 34.70 32.84 39.41 -53.03 82.15 19.60 -19.15 17.58 75 50 25 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 5 25 9 0 0 20 40 60 80 100 120 140 160 180 200 4 8 Down Mkt Capture Ratio, % 3 0.2 20 7 Morningstar Emerging Markets Universe Vanguard Emerging Mkts Stock Idx I Excess Annualized StdDev, % 2 Total Annualized StdDev, % 0.1 6 FTSE Emerging NR USD 1 15 Sharpe Ratio 5 Alpha, % 0 0.0 -1 4 10 Return vs. Risk -2 -0.1 3 Oct-10 - Sep-13 -3 2 6 5 -4 -0.2 4 1 Total Annualized Return, % -5 2 -6 -0.3 0 0 0 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile -2 Vanguard Emerging Mkts Stock Idx I FTSE Emerging NR USD -4 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr -6 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error -8 Vanguard Emerging Mkts Stock Idx I 0.32 1.02 97.11 0.05 20.02 3.42 -10 FTSE Emerging NR USD 0.00 1.00 100.00 0.03 19.39 0.00 -12 Universe(5%) 4.74 1.13 97.03 0.27 22.56 8.66 -14 0 5 10 15 20 25 30 35 40 45 Universe(25%) 1.97 1.03 95.69 0.14 20.59 5.82 Total Annualized StdDev, % Universe(Median) 0.56 0.99 94.15 0.06 19.65 4.88 Universe(75%) -0.78 0.92 93.02 -0.01 18.70 4.17 Morningstar Emerging Markets Universe Vanguard Emerging Mkts Stock Idx I Universe(95%) -5.11 0.85 86.33 -0.20 17.07 3.44 Cash FTSE Emerging NR USD City of Dover, Delaware Police Pension Plan 44

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard REIT Index I 1.08 Portfolio Information Investment Strategy Summary % Cash Ticker VGSNX % US Stocks Morningstar Category Real Estate % Bonds The investment seeks to provide a high level of income and moderate long-term capital Avg Mkt Cap $MM 8261.38 % Non-US Stocks appreciation by tracking the performance of a benchmark index that measures the Cat Med Mkt Cap $MM 9821.37 performance of publicly traded equity REITs. The fund employs an indexing investment % Pref Net Assets $MM 33431.17 approach designed to track the performance of the MSCI US REIT Index. The index is % Conv Turnover Ratio 9.00 composed of stocks of publicly traded equity real estate investment trusts (known as % Other % Assets in Top 10 Holdings 41.64 REITs). The fund attempts to replicate the index by investing all, or substantially all, of its % Non-US Bonds Total Number of Holdings 134.00 assets in the stocks that make up the index, holding each stock in approximately the same Manager Name Gerard C. O'Reilly proportion as its weighting in the index. Manager Tenure 17.39 98.92 _______________________________________________________________________ Fund Incept Date 05/13/1996 __ Prospectus Exp Ratio 0.08 Portfolio Region Portfolio Structure Phone Number 800-662-7447 Performance vs. Peer Group % United States 100.00 % Cash 1.08 14 % Canada 0.00 % US Stocks 98.92 % Latin America 0.00 % Bonds 0.00 12 % United Kingdom 0.00 % Non-US Stocks 0.00 % Eurozone 0.00 % Pref 0.00 Portfolio Ratings 10 % Europe - ex Euro 0.00 % Conv 0.00 Mstar Rating Total Annualized Return, % % Europe - Emerging 0.00 % Other 0.00 3 Year Mstar Rating % Africa 0.00 % Non-US Bonds 0.00 % Rank Cat 3 Yr 9 8 % Middle East 0.00 5 Year Mstar Rating % Japan 0.00 % Rank Cat 5 Yr 25 6 % Australasia 0.00 10 Year Mstar Rating % Asia - Developed 0.00 % Rank Cat 10 Yr 32 4 % Asia - Emerging 0.00 2 Sector Allocation Credit Quality Expense Ratio vs. Peer Group Turnover Ratio vs. Peer Group 2 140 % Basic Materials 0.00 Avg Eff Duration NA 0 % Communication Services 0.00 Effective Maturity NA % Consumer Cyclical 0.00 Avg Credit Quality NA -2 % Consumer Defensive 0.00 AAA NA 120 % Healthcare 0.00 AA NA -4 % Industrials 1.23 A NA 3 Months YTD 1 Year 3 Years 5 Years % Real Estate 98.77 BBB NA 100 % Technology 0.00 BB NA 5th to 25th Percentile 25th to Median % Energy 0.00 B NA Prospectus Exp Ratio Median to 75th Percentile 75th to 95th Percentile Ratio % Financial Services 0.00 Below B NA 80 Vanguard REIT Index I MSCI US REIT NR USD % Utilities 0.00 NR/NA NA 1 Turnover 60 Performance 3 Year to 1 3 5 Top Ten Holdings Months Date Year Years Years Simon Property Group Inc 9.60% Vanguard REIT Index I -2.96 3.19 5.76 12.35 6.37 Public Storage 4.49% 40 MSCI US REIT NR USD -3.28 2.30 4.52 11.09 4.45 HCP Inc 3.85% Universe(5%) 2.60 4.46 10.30 12.98 10.52 Equity Residential 3.71% Universe(25%) -2.33 3.04 5.35 11.90 6.71 Ventas Inc 3.71% 20 Universe(Median) -2.78 2.29 4.41 11.43 5.66 Prologis Inc 3.66% Universe(75%) -3.11 1.48 3.68 10.54 4.52 Health Care REIT, Inc. 3.51% Universe(95%) -3.63 0.18 2.57 8.77 2.78 AvalonBay Communities Inc 3.22% 0 0 Boston Properties Inc 3.14% Prospectus Exp Ratio Turnover Ratio Vornado Realty Trust 2.76% City of Dover, Delaware Police Pension Plan 45

Quarterly Investment Monitor Data as of 09/30/2013 Vanguard REIT Index I Annual Performance vs. Peer Group 3 Year Rolling Return Rank within Category 50 0 40 25 Total Return Rank, % 30 20 50 Total Return, % 10 75 0 -10 100 -20 Oct-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Sep-13 -30 Up/Down Market Capture Ratio -40 Oct-10 - Sep-13 160 -50 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 140 Up Mkt Capture Ratio, % Vanguard REIT Index I MSCI US REIT NR USD 120 100 Annual Return % 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 80 Vanguard REIT Index I 35.65 30.93 12.05 35.15 -16.38 -36.95 29.76 28.56 8.70 17.65 MSCI US REIT NR USD NA NA NA 34.18 -17.84 -39.05 26.27 26.97 7.48 16.47 60 40 20 3 Yr Alpha 3 Yr Sharpe Ratio 3 Yr St Dev 3 Yr Tracking Error 3 1.0 20 12 0 0 20 40 60 80 100 120 140 160 0.9 18 Down Mkt Capture Ratio, % 10 2 0.8 16 Morningstar Real Estate Universe Vanguard REIT Index I Total Annualized StdDev, % Excess Annualized StdDev, % 0.7 14 8 MSCI US REIT NR USD 1 0.6 12 Alpha, % Sharpe Ratio 0.5 10 6 0 0.4 8 Return vs. Risk 4 0.3 6 Oct-10 - Sep-13 18 -1 0.2 4 2 16 0.1 2 Total Annualized Return, % 14 -2 0.0 0 0 12 5th to 25th Percentile 25th to Median Median to 75th Percentile 75th to 95th Percentile Vanguard REIT Index I MSCI US REIT NR USD 10 8 MPT 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 3 Yr 6 Statistics Alpha Beta R-Squared Sharpe Ratio St Dev Tracking Error 4 Vanguard REIT Index I 1.15 1.00 99.98 0.78 16.55 0.21 MSCI US REIT NR USD 0.00 1.00 100.00 0.71 16.57 0.00 2 Universe(5%) 2.68 1.03 99.67 0.92 18.72 11.30 0 0 5 10 15 20 25 Universe(25%) 0.91 1.01 99.44 0.76 16.91 2.45 Total Annualized StdDev, % Universe(Median) 0.44 0.98 99.02 0.73 16.47 1.70 Universe(75%) -0.03 0.96 98.04 0.70 16.16 1.28 Morningstar Real Estate Universe Vanguard REIT Index I Universe(95%) -1.88 0.78 78.68 0.55 14.52 0.97 Cash MSCI US REIT NR USD City of Dover, Delaware Police Pension Plan 46

Quarterly Investment Monitor Data as of 09/30/2013 Glossary Alpha (3 Yr) % Assets in Top 10 Holdings Alpha is a measure of the difference between a portfolio’s actual returns and its expected performance, given its level of risk as measured The aggregate assets, expressed as a percentage, of the fund's top 10 portfolio holdings. This figure is meant to be a measure of portfolio risk. by beta. A positive alpha figure indicates the portfolio has performed better than its beta would predict. In contrast, a negative alpha Specifically, the higher the percentage, the more concentrated the fund is in a few companies or issues, and the more the fund is susceptible to indicates the portfolio has underperformed, given the expectations established by beta. the market fluctuations in these few holdings. The figure is calculated from the most recent available fund holdings. Average Effective Duration Price/Book Ratio TTM A measure of a fund's interest-rate sensitivity--the longer a fund's duration, the more sensitive the fund is to shifts in interest rates. The weighted average of the price/book ratios of all the stocks in a fund’s portfolio. The P/B ratio of a company is calculated by dividing the Duration is determined by a formula that includes coupon rates and bond maturities. Small coupons tend to increase duration, while market price of its stock by the company’s per-share book value. Stocks with negative book values are excluded from this calculation. In theory, shorter maturities and higher coupons shorten duration. The relationship between funds with different durations is straightforward: A fund a high P/B ratio indicates that the price of the stock exceeds the actual worth of the company's assets, while a low P/B ratio indicates that the with a duration of 10 years is twice as volatile as a fund with a five-year duration. Morningstar prints an average effective duration statistic stock is a bargain. that incorporates call, put, and prepayment possibilities. Price/Earnings Ratio TTM Average Effective Maturity The weighted average of the price/earnings ratios of the stocks in a fund’s portfolio. The P/E ratio of a stock is calculated by dividing the current Average effective maturity is a weighted average of all the effective maturities of the bonds in a portfolio. Effective maturity takes into price of the stock by its trailing 12 months’ earnings per share. In computing the average, Morningstar weights each portfolio holding by the consideration mortgage prepayments, puts, calls, adjustable coupons, and other features of individual bonds and is thus a more accurate percentage of equity assets it represents, so that larger positions have proportionately greater influence on the fund’s final P/E. measure of interest-rate sensitivity. Longer-maturity funds are generally considered more interest-rate sensitive than their shorter counterparts. R-Squared Beta Reflects the percentage of a fund’s movements that can be explained by movements in its benchmark index. An R-squared of 100 indicates that all movements of a fund can be explained by movements in the index. Thus, index funds that invest only in S&P 500 stocks will have an A measure of a fund’s sensitivity to market movements. The beta of the market is 1.00 by definition. Morningstar calculates beta by R-squared very close to 100. Conversely, a low R-squared indicates that very few of the fund’s movements can be explained by movements in its comparing a fund’s excess return over Treasury bills to the market's excess return over Treasury bills, so a beta of 1.10 shows that the benchmark index. An R-squared measure of 35, for example, means that only 35% of the fund’s movements can be explained by movements in fund has performed 10% better than its benchmark index in up markets and 10% worse in down markets, assuming all other factors the benchmark index. remain constant. Conversely, a beta of 0.85 indicates that the fund’s excess return is expected to perform 15% worse than the market’s excess return during up markets and 15% better during down markets. Sharpe Ratio The Morningstar Rating The Sharpe Ratio is a risk-adjusted measure developed by Nobel Laureate William Sharpe. It is calculated by using standard deviation and excess return to determine reward per unit of risk. The higher the Sharpe Ratio, the better the portfolio’s historical risk-adjusted performance. It Commonly called the Star Rating, is a measure of a fund's risk-adjusted return, relative to funds in its category. Funds are rated from one can be used to compare two portfolios directly on how much excess return each portfolio achieved for a certain level of risk. to five stars, with the best performers receiving five stars and the worst performers receiving a single star. Standard Deviation Risk-adjusted return is calculated by subtracting a risk penalty from each fund total return, after accounting for all loads, sales charges, and redemption fees. The risk penalty is determined by the amount of variation in the fund's monthly return, with emphasis on downward Standard deviation is the statistical measurement of dispersion about an average, which depicts how widely a stock or portfolio’s returns varied variation. The greater the variation, the larger the penalty. Funds are ranked within their categories and stars are assigned as follows: Top over a certain period of time. Investors use the standard deviation of historical performance to try to predict the range of returns that is most 10% five stars; Next 22.5% four stars; Middle 35% three stars; Next 22.5% two stars; Bottom 10% one star. likely for a given investment. When a stock or portfolio has a high standard deviation, the predicted range of performance is wide, implying greater volatility. Audited Expense Ratio Total Number of Holdings 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 The total number of different holdings of a fund. This figure is meant to be a measure of portfolio risk. Specifically, the lower the figure, the more included in the expense ratio. concentrated the fund is in a few companies or issues, and the more the fund is susceptible to the market fluctuations in these few holdings. This figure also provides a context for the importance of % assets in top 10 holdings. The figure is calculated from the most recent available fund Geometric Average Market Capitalization holdings. It does not include a fund’s short positions. Morningstar defines the overall "size" of a stock fund's portfolio as the geometric mean of the market capitalization for all of the stocks it Total Return owns. It's calculated by raising the market capitalization of each stock to a power equal to that stock's stake in the portfolio. The resulting numbers are multiplied together to produce the geometric mean of the market caps of the stocks in the portfolio, which is reported as Expressed in percentage terms, Morningstar’s calculation of total return is determined each month by taking the change in monthly net asset average market capitalization. value, reinvesting all income and capital-gains distributions during that month, and dividing by the starting NAV. Reinvestments are made using This number is different from the fund's median market cap--the capitalization of the median stock in its portfolio. The geometric mean the actual reinvestment NAV, and daily payoffs are reinvested monthly. better identifies the portfolio's "center of gravity." That is, it provides more accurate insight into how market trends (as defined by capitalization) might affect the portfolio. Turnover Ratio Net Assets This is a measure of the fund’s trading activity which is computed by taking the lesser of purchases or sales (excluding all securities with maturities of less than one year) and dividing by average monthly net assets. A turnover ratio of 100% or more does not necessarily suggest that The month-end net assets of the mutual fund, recorded in millions of dollars. Net-asset figures are useful in gauging a fund’s size, agility, all securities in the portfolio have been traded. In practical terms, the resulting percentage loosely represents the percentage of the portfolio’s and popularity. They help determine whether a small company fund, for example, can remain in its investment-objective category if its holdings that have changed over the past year. asset base reaches an ungainly size. 12-Month Yield Also known as a distribution yield, Morningstar computes this figure by summing the trailing 12-month’s income distributions and dividing the sum by the last month’s ending NAV, plus any capital gains distributed over the same period. Income refers only to interest payments from fixed-income securities and dividend payoffs from common stocks. City of Dover, Delaware Police Pension Plan 47

Quarterly Investment Monitor Data as of 09/30/2013 Disclaimer This Milliman work product was prepared solely for the internal business use of City of Dover, Delaware Police Pension Plan. Milliman's work may not be provided to third parties without Milliman's prior written consent. The analysis in this report was prepared utilizing data from third parties and other sources including but not limited to internal computer software and databases. Reasonable care has been taken to assure the accuracy of the data contained herein, and comments are objectively stated and are based on facts gathered in good faith. These reports do not constitute investment advice with respect to the sale or disposition of individual securities. Unless explicitly stated in your Service Agreement, there should be no reliance on Milliman services to provide analysis or reporting on a daily basis, the changes to manager rankings, ratings or opinions thereon and are not intended to monitor investment manager compliance with individual security selection criteria, limits on security selection, and/or prohibitions to the holding of certain securities or security types. The One Year, Three Year, Five Year, and Ten Year rates of return are time-weighted annual rates. The One Month, Three Month, and Year to Date rates of return are rates for the period indicated. All returns include fund internal expenses, except sales charges, if any. The rates of return shown are for the mutual funds in which the retirement program participates, not for the plan specifically. Returns credited to individual accounts will vary due to the timing of contributions, transfers, and withdrawals. Past performance is no guarantee of future results. Milliman provides a copy of its SEC Form ADV Part II to clients without charge upon request. Milliman disclaims responsibility, financial or otherwise, for the accuracy or completeness of this report. City of Dover, Delaware Police Pension Plan 48