Vestor Capital Corporation

1. Descriptive Overview:

Vestor Capital is a privately owned investment management firm registered as an investment advisor under the Investment Advisor Act of 1940. The firm was founded in 1984 and in the early years operated primarily as a broker dealer. Since 1990, Vestor Capital has been providing investment advisory services primarily for individuals. More recently, the management of tax-exempt funds has become a growing portion of our client base. Ownership and profit sharing is limited to active employees of the firm. All employees are required to own only the same investments owned by clients of the firm.

2. Decision Making Process:

Primary Structure: Centralized

The firm's investment committee is the decision making body for all investments made by the firm. It is comprised of six of our most experienced portfolio managers and analysts who meet each week to set overall investment strategy, review purchase and sale valuations, review and approve research recommendations, and to review business, industry and sector weightings and concentrations. All investment ideas are generated internally. Research is focused on established U.S. companies that effectively deploy cash flows to increase profitability and to obtain above average returns on invested capital. No investments are sought in businesses involving speculation on economic cycles, commodity pricing, investment fads, or business with short product life cycles. We utilize a combination of business valuation multiples and discounted cash flow analyses to value businesses we invest in. Following the research process, companies are purchased in all client accounts. Approximately 30 business are owned in each client's equity portfolio. Each client of Vestor Capital receives strategy and investment policy set by the investment committee, not that of any single portfolio manager.

3. Strategy Description:

Our criteria include high returns on equity and total capital, strong and consistent cash flow, industry leadership, strong shareholder-oriented management and trading liquidity.

4. Investment Process:

U.S. Equity

Vestor Capital Corporation's equity selection process centers around a two step process. First, only businesses earning above average returns on investment capital are selected for possible investment. In addition, these businesses are typically one of the leading companies in their industries based on operating stability and growth. Second, Vestor Capital determines purchase and sale valuations for each company identified in the first step. Overall, approximately thirty (30) businesses are owned in each client's equity portfolio at any given time. The uniqueness of Vestor Capital's investment strategies stems from the dedication, focus and commitment of our investment professionals to maintain discipline in achieving our long-term investment objectives, irrespective of short-term market vagaries. Market and company specific risks are managed by limiting equity portfolio positions to no more than 25% in any one sector, 15% in any one industry and 8% in any one company. All of our investment services are measured against both a representative benchmark and the respective client's long-term investment goals.

U.S. Fixed Income

Vestor Capital Corporation invests clients' fixed income assets to meet two objectives: income generation and capital preservation. To achieve income generation, a strategy is employed to invest a client's fixed income assets in securities with a laddered maturity structure of 10 years and less. The proportion of fixed income assets invested in various maturities will primarily reflect each client's specific liquidity and cash flow requirements. It also reflects the benefits of diversifying fixed income investments across time and our outlook for interest rates. For a client whose investment income is currently taxable, we determine the appropriate breakdown of investments into taxable and tax exempt fixed income securities. This determination is based upon the client's tax rate, the available comparative after-tax yields on taxable and tax exempt fixed income securities and how prevailing after-tax yields compare to historical norms and ranges. Vestor Capital also seeks to enhance total return by emphasizing relatively attractive maturities on the yield curve, and by emphasizing sectors and individual securities with comparatively attractive yield spreads to U.S. Treasuries. The firm's assessments of interest rate movements, shifts of the yield curve, and changes in yield spreads relative to U.S. Treasuries are based upon economic, inflation, and interest rate models and in-house analytical research. In the interest of capital preservation, fixed income portfolios are invested in U.S. Treasury securities, U.S. Government agency securities, or investment grade corporate or municipal securities rated A or higher by the major bond rating services.

5. Trading Practices:

Vestor Capital seeks best execution when trading on behalf of the client. Trading execution is offered through the firm's clearing broker/dealer, Pershing L.L.C., or through the client's broker/dealer. Vestor Capital does not utilize any soft dollar arrangement in managing this product.

6. Organization/People:

Vestor Capital Corporation is a privately-owned and operated registered investment advisor founded in 1984. Four (4) investment professionals, who are responsible for investment analysis, administration & treasury functions, and portfolio management/ client services are principals of the firm. Three (3) research analysts, three (3) portfolio managers, and two (2) client service representatives are responsible for the firm's Institutional Business. Each investment professional is involved throughout the week in informal discussions with other investment professionals within the firm regarding investment selection and allocation. In addition, each investment professional is apprised of firm-wide investment portfolio developments at bi-weekly meetings. Separately, all analysts meet throughout the week to discuss investment ideas, overall portfolio strategy, and specific portfolio developments. The average investment industry experience of the analysts approximates 14 years, while the average investment industry tenure of all other professionals approximates 7 years. None of the institutional investment professionals hired within the past five years have left the firm.

7. Resources:

Vestor Capital Corporation's investment selection process relies on detailed, unbiased and proprietary research compiled from numerous data and information sources. In addition to applying proprietary screening tools to review potential target investments, Vestor Capital relies on one-on-one interviews with company management, industry conferences, customer and vendor interviews, and a number of other resources. Combined, the use of multiple resources throughout all phases of the investment process helps to bolster original and objective thinking, which serves as the platform for the firm's portfolio managers to provide long-term value-added investment management services.

8. Screening Process for U.S. Equity Value

Vestor Capital screens approximately 5000 U.S. companies to identify businesses that effectively deploy cash flows to increase profitability and to obtain above average returns on invested capital. In addition, Vestor Capital identifies companies with superior growth and profitability characteristics:
* Sales Growth
* Earnings Growth
* Profit Margin Sustainability
* Return on Capital
* Cash Flow Allocation
* Sound Management
Vestor Capital invests in established U.S. companies operated by shareholder-oriented managements that are expected to deliver superior and sustainable long-term rates of growth. No investments are sought in companies involving speculation on economic cycles, commodity pricing, investment fads or businesses with short product life cycles.

9. Buy/Sell Discipline for all U.S. Equity Value

Vestor Capital calculates each portfolio company's future stock value based upon:

Appropriate future growth estimates determined through Vestor's research, including discussions with company management.
Future valuation multiple estimates from Vestor's research and analysis.
Combination of 1 and 2 arrives at the future stock value.

Vestor Capital discounts the future stock value to determine buy and sell target prices.

Companies whose market prices are at or below their targeted buy prices are potential buy candidates, while companies whose market prices are at or above their targeted sell prices are potential sell candidates, if owned.
Additional information is reviewed for the targeted companies:

Buy or sell decisions are executed based on price targets.

10. VCC'S APPROACH TO CORPORATE GOVERNANCE ISSUES, eg: VOTING POLICY, OTHER PROCESSES:

Vestor Capital utilizes Institutional Shareholder Services, the world's leading provider of proxy voting and corporate governance services, to assist with the firm's proxy voting responsibilities. Proxy Voter Services (PVS), an independent division of ISS, offers voting agent services and publications based on AFL-CIO guidelines and other labor union and Taft-Hartley fund policies.
11. Business Strategy

Vestor Capital Corporation is a midwest-based registered investment adviser. We seek to develop long-term relationships with our clients through educating them about our fundamental investment process and then consistently executing this process in managing their portfolios. Our preferred minimum account size is an amount that represents a meaningful portion of the client's equity portfolio.

12. Portfolio Construction

A typical Vestor Capital U.S. Equity Portfolio consists of approximately thirty equally weighted equity holdings. Over time, the composition of a typical U.S. equity portfolio will hold no more than eight (8) percent in any one company, fifteen (15) percent in any one industry, or twenty-five (25) percent in any one sector.

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