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Agenda 01-09-13CITY OF BOYNTON BEACH BOARD OF TRUSTEES GENERAL EMPLOYEES' PENSION PLAN Special Board Meeting Wednesday, January 9, 2013 Location: Commission Chambers, City Hall 100 E. Boynton Beach Blvd. Boynton Beach, FL 33435 Plan Administrator: (561) 624-3277 Time: 1:30 PM I. Call to Order II. Approval of Agenda III. New Business A. Interview of Domestic Large Cap Value Managers: o 1:30 p.m. Ceredex Value Advisors— David McElroy & Steve Loncar o 2:15 p.m. DRZ — Victor Zollo, Harry Radovich & Brian Casey o 3:30 p.m. Wedge Capital Management — Richard Wells & John Norman B. Wells Fargo Signature Cards IV Adjournment NEXT QUARTERLY MEETING DATE: Monday, February 25 at 1:30 pm If a person decides to appeal any decision made by this Board with respect to any matter considered at this meeting, he/she will need a record of the proceedings, and that, for such purpose, he/she may need to ensure that a verbatim record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be based (F.S. 286.0105). Notice: The City shall furnish appropriate auxiliary aids and services where necessary to afford an individual with a disability an equal opportunity to participate in and enjoy the benefits of a service, program, or activity conducted by the City. Please contact the City Clerk's office at (561) 742-6060 at least 24 hours prior to the program or activity in order for the City to reasonably accommodate your request. CERE,�EX Overview of the Ceredex Large Cap Value Discipline Final Presentation for: Boynton Beach General Employees' Pension F January 9, 2013 Boynton Beach, Florida David B. McElroy Director, Institutional Sales RidgeWorth Investments (404) 845-7671 Email: david.mcelroys,ricrcr Steve Loncar Client Portfolio Manager Ceredex Value Advisors (407) 674-1254 Email: seve.loncarOi ceredexvalue.com This presentation was prepared by Ceredex Value Advisors LLC at the request of and for the exclusive use of Boynton Beach General Employees' Pension Fund and may not be used for any other purposes. This material may not be suitable for others and should not be redistributed. Past performance is not indicative of future results. RIDGEWORTJ I N V E S T M E N T SO � 1 ASSET ANAGEMENT' ZEVENBERGEN CAPITAL INVESTMENTS LILC CEREDEX V A L U E A D V I S 0 R S Investment Advisors LLc 'OSILVANT CAPITAL FMANAG ENTENT StableRiv'er CA1='iTAL MA:WACEMENT • An investment advisor registered with the SEC since 1985 • $47.8 billion in assets under management* "As of September 30, 2012. RidgeWorth's subsidiaries have in the aggregate $47.8 billion in assets under management. This amount includes C E E some duplication, in amounts viewed as immaterial by RidgeWorth, due to inclusion of certain amounts managed jointly by multiple subsidiaries. v A L U E A o v i s 0 R S t Vt1E A D V' R • Value Equity investing roots trace back to 1989 • Approximately $8.1 billion AUM* in three primary strategies • Headquartered in Orlando, Florida Assets $3.1 billion $2.5 billion $2.5 billion Lead Manager 30 Years 16 Years 27 Years Experience • 12 Investment Professionals • 3 Portfolio Managers have worked together for 16 years • 10 CFA Charterholders "As of September 30, 2012 (includes sub -advisory relationships and separate accounts). C E E Effective April 20, 2012, the Small Cap Value Equity Fund is closed to new investors. v A L U E A o v i s 0 R s mr Corporations Old Russell Investments Company 111111,1111r; Catholic Diocese of St. Petersburg Coca-Cola Foundation The Stabler Foundation University System of New Hampshire Foundation Orlando Health Municipalities City of Atlanta General City of Ft. Pierce City of Pensacola Firefighters City of Philadelphia City of Roanoke Contra Costa Country Fulton County School Employees Louisiana Sheriffs Board of Trustees of the Sunrise Police Officers Taft Hartley Teamsters Union 142 National Automatic Sprinkler Industry Transport Employees' As of November 20, 2012. Client performance was not a determining factor in creating this representative client list. The names included herein were selected as being E E representative of the different types of institutional clients and businesses serviced by Ceredex Value Advisors LLC. Inclusion of a client name on this list should not be taken as an indication that the client approved or disapproves of Ceredex Value Advisors LLC or the advisory services provided. v a E o v i s a R s Mills Riddick, CFA Donald Wordell, CFA Brett Barrier, CFA Large Cap Value Lead Portfolio Manager Mid -Cap Value Lead Portfolio Manager Small Cap Value Lead Portfolio Manager Charlie Carter, CFA Jennifer Graff, CFA Melissa Miller, CFA Consumer Staples Industrials Financials Consumer Discretionary Cody Smith, CFA Health Care Technology Nicole Blakley, CFA' Energy Materials Hein Hanekom, CFA Utilities Steve Loncar Client Portfolio Manager Jason Fraser, CFA Financials Telecom Sarah Thompson Portfolio Assistant Joe Ward, CFA Stephen P. Smith, CFA Large Cap Value Lead Trader Small Cap Value Lead Trader Mid -Cap Value Lead Trader E E 1,/► As of September 30, 2012. v A L U E A o v i s 0 R s _ Dividends reflect past performance and there is no guarantee they will continue to be paid. E E V A L U E A D V I S 0 R S Dividends reflect past performance and there is no guarantee they will continue to be paid. E E Effective April 20, 2012, the Small Cap Value Equity Strategy is closed to new investors. v A L U E A o v i s 0 R s • Eliminated — Automatic Sell • Cut unexpectedly — Reevaluate Fundamentals • Cut expectedly — Retain • Stock Reaches its Previously Established Price Target • More Attractive Risk/Reward Prospects • Cyclical • Structural • Timing of Catalyst Extended Dividends reflect past performance and there is no guarantee they will continue to be paid. CE E V A L U E A D V I S 0 R S Benchmark Number Of Holdings Russell 1000 Value Russell Midcap Value Russell 2000 Value 80% within range of 80% within range of $50 million to $3 Russell 1000 Value Russell Midcap billion at purchase 60-80 60-80 80-100 No Formal No Formal No Formal Restrictions Restrictions Restrictions Portfolio Turnover Range 75-100% 125-175% 50-75% IDon Wordell Brett Barn'er Portfolios generally have position sizes of 5% or less and are fully invested. As of September 30, 2012. Data subject to change. Effective April 20, 2012, the Small Cap Value Equity Fund is closed to new investors. Fully invested means cash positions that are less than 5%. Ceredex subadvises all three strategies for the RidgeWorth Funds. E E V A L U E A D V I S 0 R S Sector Concentration* Ceredex Large Cap Value Composite ® Russell 1000 Value Index Consumer Discretionary Consumer Staples Energy Financials Health Care Industrials Information Technology Materials Telecom Services Utilities 0% 5% 10% 15% 20% 25% 30% Sector Weight Market Cap (billion) $79.9 $94.5 Dividend Yield 2.6% 2.5% Price -to -Earnings 13.5 13.6 (12 months trailing) Cisco Systems Inc. 2.5 Price -to -Book 1.9 1.5 Price -to -Sales 1.2 1.0 Vis, 9 -I u Chevron Corp.', 3.3 JPMorgan Chase & Co. 3.1 Cigna Corporation 3.0 Occidental Petroleum Corp. 2.8 Exxon Mobil Corp. 2.6 Cisco Systems Inc. 2.5 General Electric Co. 2.5 Wells Fargo & Co. 2.5 Procter & Gamble Co. 2.4 PPL Corp. 2.4 See Holdings Disclosure in Appendix. "As of September 30, 2012. Source: FactSet, October 18, 2012. Past performance is not indicative of future results. Portfolio characteristics, sector analysis, and holdings exclude cash and may change at any time without notice. This presentation is solely for SUPPLEMENTAL INFORMATION purposes, intended for institutional investors and may not be provided unless directly accompanied by the fully compliant GIPS Composite. Complete information regarding the Ceredex returns are included on the GIPS Presentation in Appendix. v A L c E A D v i s 0 R s QTR YTD 1 Year 3 Year 5 Year 10 Year As of September 30, 2012. Source: FactSet, October 18, 2012. "Return is annualized- Inception July 1, 1998. Past performance is not indicative of future results. This presentation is solely for SUPPLEMENTAL INFORMATION purposes, intended for institutional investors and may not be provided unless directly accompanied by the fully compliant GIPS Composite. Complete information regarding the Ceredex returns E E are included on the GIPS Presentation in Appendix. The comparative performance contained herein reflects annualized returns for specific time periods, are gross of all fees, are not indicative of actual annual returns, and may not be relied upon for investment decisions. See Investment v A L U E A o v i s a R s Performance disclosure in Appendix. Ceredex Large Cap Value Versus Benchmark and Peers Period Ending 09/30/12 Universe: eVestment (eA Universes) eA Large Cap Value Equity Ceredex Large Cap Value Composite ® Russell 1000 Value Index 5 25 m c m m 50 d 75 95 Quarter # Managers YTD 1 Year 3 Year 5 Year 330 330 330 327 312 10 Year 236 Percentile 50 6.11 14.04 28.19 11.64 0.46 8.91 Ceredex Large Cap Value Composite 6.74 13.87 29.32 12.49 1.87 9.80 Russell 1000 Value Index 6.51` 15.75 30.92 11.84 ' -0.90 8.17 As of September 30, 2012. Source: FactSet, October 18, 2012. "Return is annualized- Inception July 1, 1998. Past performance is not indicative of future results. This presentation is solely for SUPPLEMENTAL INFORMATION purposes, intended for institutional investors and may not be provided unless directly accompanied by the fully compliant GIPS Composite. Complete information regarding the Ceredex returns are included on the GIPS E E x Presentation in Appendix. The comparative performance contained herein reflects annualized returns for specific time periods, are gross of all fees, are not indicative of actual annual returns, and may not be relied upon for investment decisions. See Investment Performance disclosure in Appendix. v a E o v i s a R s Ceredex Large Cap Value Versus Benchmark and Peers Period Ending 09/30/12 Universe: eVestment (eA Universes) eA Large Cap Value Equity Ceredex Large Cap Value Composite ® Russell 1000 Value Index 5 25 m ami 50 m d 75 95 11 Anlzd Return Anlzd Alpha Sharpe Ratio Information Ratio A Beta A Anlzd StdDev A • Tracking Error As of September 30, 2012. Source: FactSet, October 18, 2012. "Return is annualized- Inception July 1, 1998. Past performance is not indicative of future results. This presentation is solely for SUPPLEMENTAL INFORMATION purposes, intended for institutional investors and may not be provided unless directly accompanied by the fully compliant GIPS Composite. Complete information regarding the Ceredex returns are included on the GIPS E E x Presentation in Appendix. The comparative performance contained herein reflects annualized returns for specific time periods, are gross of all fees, are not indicative of actual annual returns, and may not be relied upon for investment decisions. See Investment Performance disclosure in Appendix. v a E o v i s a R s Return vs. Standard Deviation 10/2007 to 09/2012 - Ceredex Large Cap Value Composite ® Russell 1000 Value Index E 4 -5 16 20.1 24.5 Annualized Standard Deviation Upside vs. Downside 10/2007 to 09/2012 Ceredex Large Cap Value Composite ® Russell 1000 Value Index 120 801 1 80 100 120 Downside Capture % Style Consistency- Rolling 36 Months (Returns Based) 10/2007 to 09/2012* Rolling 36 Month Window- Russell 4 Style Indices Ceredex Large Cap Value Composite ® Russell 1000 Value Index 2 l 1 a> 1 [F -Z -2 -1 0 1 2 Value Growth Rolling Multi -Horizon Chart — Information Ratio 10/2007 to 09/2012* Rolling 36 Month Window Universe: eVestment (eA Universes): eA Large Cap Value Equity Ceredex Large Cap Value Composite Benchmark: Russell 1000 Value Index 0n r� 40 c m U DID 60 W11111 100 11 12 As of September 30, 2012. Source: FactSet, October 18, 2012. *Return is annualized- Inception July 1, 1998. Past performance is not indicative of future results. Portfolio characteristics, sector weightings and holdings may change at any time without notice. Performance attribution does not incorporate the effects of cash, unclassified securities or expenses. This presentation is solely for SUPPLEMENTAL INFORMATION purposes, r r intended for institutional investors and may not be provided unless directly accompanied by the fully compliant GIPS Composite. Complete C C information regarding the Ceredex returns are included on the GIPS Presentation 1n Appendix. The comparative performance contained herein v A L c E A o v 1 s a R s reflects annualized returns for specific time periods, are gross of all fees, are not indicative of actual annual returns, and may not be relied upon for investment decisions. See Investment Performance disclosure in Appendix. Standard Management Fee Schedule Assets First $10 Million Next $40 Million Over $50 Million Fee in Basis Points 75 45 25 Proposed Management Fee Schedule for the Boynton Beach General Employees' Pension Fund with a 10% discount Assets First $10 Million Next $40 Million Over $50 Million Fee in Basis Points 67.5 40.5 22.5 Fees are based on the market value of the assets at quarter end OR fees are charged quarterly based on the Average Daily Balance of the account(s) if it is a liquidity account Fees include investment management, communication, and attendance at investment meetings Minimum Annual Fee = $10,000 Period Ending September 30, 2012. See Ceredex's Form ADV, Part 2 for a description of investment advisory fees. E E V A L U E A D V I S 0 R S + Experience In Bull And Bear Marketl + Dividend Requirement s Three Important Benefits II + Compelling Long -Term Performance And Risk Allocation Customized Client Service Dividends reflect past performance and there is no guarantee they will continue to be paid. E E V A L U E A D V I S 0 R S CEREEX VALU E ADVISORS Ceredex Value Advisors Performance Results: Large Cap Value Strategy Composite July 1, 1998 through September 30, 2012 CerfedexValue Advisors LLC claims compliance with the Global Investment Year Gross of Fee Return NPortfolios Net of Fee ° Return (/o) Benchmark ° Return (/o) Number of Composite Dispersion (%) Total Com Composite Assets at End of Period (USD Millions) Total Firm Assets (USD Millions) 7/1/98 to 12/31/98 2.4 2.0 3.1 2 N/A 29 1999 -2.3 -3.1 7.4 2 N/A 25 2000 11.9 11.2 7.0 2 N/A 26 2001 0.4 -0.4 -5.6 3 N/A 34 2002 -15.1 -15.9 -15.5 4 N/A 53 2003 25.5 24.8 30.0 8 0.2 128 2004 16.3 15.6 16.5 13 0.1 174 2005 4.6 3.9 7.1 13 0.2 172 2006 23.6 22.9 22.3 7 0.3 82 2007 4.7 3.9 -0.2 7 0.4 90 2008 -31.6 -32.3 -36.9 8 N/A 1,176 2,116 2009 25.6 24.9 19.7 7 0.3 1,341 3,082 2010 19.3 18.4 15.5 7 0.2 1,411 4,691 2011 -0.8 -1.6 0.4 14 0.1 2,196 6,493 YTD 2012 13.9 13.2 15.7 21 0.1 3,110 8,113 Per ormance Standards �GIPS[j-pnd has prepared and presented this report to compliance with the GIP standards. Ceredex has been independently verified for the period March 31, 2008 (the date of the Firm's foundinthrough December 31, 2011 by Ashland Partners & Company LLP. A copyof the vera ication report is available upon request. Verification assesses whether (lthe firm has complied with all the composite construction requirements of the GIPS standards on a firm -wide basis and (2) the firm's policies and procedures are designed to calculate and present performance in compliance with GIPS standards. Verification does not ensure the accuracy of any specific composite presentation. 1. Ceredex Value Advisors LLC ("Ceredex") is an SEC registered investment adviser incorporated in 2008 and is a wholly owned subsidiary of RidgeWorth Capital Management, Inc ("RidgeWorth"). Ceredex was created when all of the investment decision -makers associated with the value equity investment strategies of RidgeWorth became employees of Ceredex. The staff and decision making process remains intact and independent within Ceredex. For composite reporting purposes, the Firm is defined as all equity portfolios managed by Ceredex. Composite performance results are linked to performance history generated at RidgeWorth, and Ceredex has records that document and support this performance history. Prior to March 31, 2008, RidgeWorth Capital Management operated under the name of Trusco Capital Management, Inc. 2. The Large Cap Value Strategy composite includes fully discretionary separately managed investment accounts and registered and unregistered mutual funds managed in accordance with the large cap value style. Under normal circumstances, Large Cap Value portfolios will have at least 80% of their net assets invested in U.S. traded equity securities of large cap companies. U.S. traded equity securities may include American Depositary Receipts ("ADRs"). Ceredex considers large cap companies to be companies with market capitalizations similar to those of companies in the Russell 1000 Value Index. In selecting investments for the portfolios, Ceredex chooses companies that it believes are undervalued in the market relative to the industry sector and the company's own valuation history. The gross of fee return for the mutual funds is calculated by adding back the fund's published total operating expense ratio to the net of fee mutual fund performance. A complete description of the composite is available on request. 3. The registered and unregistered mutual funds were added to the composite effective April 1, 2008, immediately after the creation of Ceredex Value Advisors. Prior to that date the composite consisted of only separately managed accounts. 4. The benchmark for the Large Cap Value Strategy composite is the Russell 1000 Value Index. 5. As of December 31, 2011, the three-year annualized standard deviation (using monthly returns) was 19.0 for the composite and 20.7 for the benchmark index. 6. In 1999 through 2001the portfolio was under -weighted in technology stocks relative to the benchmark. The technology sector produced the highest return in 1999 followed by three years of extremely poor performance. Our under -weighting resulted in underperformance in 1999 followed by outperformance in 2000 and 2001. The drop in composite assets from 2005 to 2006 was primarily due to two accounts closing during the first quarter of 2006. 7. Valuations and returns are computed and stated in U.S. Dollars. 8. Beginning 3/31/2008, composite policy requires the temporary removal of any portfolio incurring a client initiated significant cash inflow or outflow of 10% or greater of portfolio assets. 9. The dispersion of annual returns is measured by the equal -weighted standard deviation of portfolio returns represented within the composite for the full year. Partial year dispersion is measured by the equal -weighted standard deviation of portfolio returns represented in the composite for the partial year period specified. No dispersion is reported for periods with five or fewer portfolios (shown as N/A). 10. Returns are presented gross and net of management fees and include the reinvestment of all income. The management fee schedule applicable to large cap equity accounts is as follows: 0.75% on the first $10 million, 0.45% on the next $40 million, and 0.25% on all over $50 million. The minimum annual fee is $10,000. 11. This composite was created March 31, 2008, the inception date of Ceredex, and continues the investment strategy of a composite originally created in 1998. The Composite has performance history with an inception date of July 1, 1998. 12. The minimum portfolio size for the Large Cap Value Strategy composite is $500,000. For further information on investment management fees, please refer to Form ADV Part 2. 13. Net of fee performance is calculated assuming a fee of 0.75%, the highest fee for this type of investment account. 14. Policies for valuing portfolio, calculating performance and preparing compliant presentations are available upon request. 15. A complete list and description of firm composites and performance results is available upon request. E E 16. Past performance is not indicative of future results and no investment is guaranteed for return of principal and/or return on investments. All information provided and used in V A L U E A D V 15 0 R S calculations is believed to be correct, but accuracy cannot be guaranteed. Please consult with a financial professional before investing. Mills Riddick, CFA Large Cap Value Portfolio Manager, Chief Investment Officer Mills Riddick, is the Chief Investment Officer and the Senior Portfolio Manager for the Large Cap Value Equity strategy for Ceredex Value Advisors. Mills is responsible for the overall investment policy for all value equity portfolios. Mills joined Trusco Capital Management, Ceredex's predecessor firm, in 1989 as a Portfolio Manager. Upon arrival at Trusco, he assumed a lead client service role and took on portfolio management responsibilities, first for a Growth strategy and subsequently, for the Large Cap Value strategy that he manages today. In 1995, he became the strategy's sole Portfolio Manager and was appointed head of the Value Equity Team. Mills held both these positions without interruption from 1995 until 2008 and during this time he played a leading role in crafting Trusco's equity investment philosophy and assembling the team of professionals dedicated to value equity. In recent year's, Mills led Ceredex's transition from an investment boutique integrated within Trusco to an independent firm, culminating in Ceredex's incorporation and registration with the SEC on March 31, 2008. Prior to joining the firm Mills began his career in 1980 with Peat Marwick as a Certified Public Accountant. Mills started his investment career with Bache in 1982 as a Financial Consultant. Mills is a Cum Laude graduate of Florida State University with a BS in Accounting. Mills received his Certified Public Accountant designation in 1981 and his Chartered Financial Analyst designation in 1992. Donald Wordell, CFA Mid -Cap Value Portfolio Manager Don Wordell, is a Managing Director and Portfolio Manager for the Mid -Cap Value Equity strategy for Ceredex Value Advisors. Don joined Trusco Capital Management, Ceredex's predecessor firm, in 1996 as a Research Analyst dedicated to cover Value Equity strategies. In 2001, he assumed a Portfolio Manager role for the Mid -Cap Value strategy. Don is a graduate of the University of Central Florida with a BS in Finance and an MBA. Don received his Chartered Financial Analyst designation in 2004. Brett Barrier, CFA Small Cap Value Portfolio Manager Brett Barner, is a Managing Director and Portfolio Manager for the Small Cap Value Equity strategy for Ceredex Value Advisors. Brett joined Trusco Capital Management, Ceredex's predecessor firm, in 1990 as a Client Portfolio Manager and performed equity analysis. In 1994, he assumed a Portfolio Manager role for the Small Cap Value strategy. Prior to joining the firm Brett was a Financial Consultant with Drexel, Burnham and Shearson Lehman Brothers. Brett is a Cum Laude graduate of the University of Central Florida with a BSBA in Finance. Brett is a member of the CFA Society of Orlando and received his Chartered Financial Analyst designation in 1993. As of September 30, 2012. E E V A L U E A D V I S 0 R S Value Equity Analysts Charles E. Carter, CFA Research Analyst (Consumer Staples & Consumer Discretionary) Charlie Carter is a Research Analyst for Ceredex Value Advisors. Charlie joined Trusco Capital Management, Ceredex's predecessor firm, in 2004. Prior to joining the firm Charlie worked for CNL Income Corp., a real estate holding company as the Manager of Investor Relations. Charlie began his career at Credit Suisse First Boston as a sell -side Equity Research Associate dedicated to covering the media industry. Charlie is a graduate of Georgia Institute of Technology with a BS in Management and received his Chartered Financial Analyst designation in 2006. Jennifer W. Graff, CFA Research Analyst (Industrials) Jennifer Graff is a Research Analyst for Ceredex Value Advisors. Jennifer joined Trusco Capital Management, Ceredex's predecessor firm, in 2001 as a Portfolio Assistant after completing the SunTrust Banks, Inc. Management Associate Program. Jennifer was promoted to Research Analyst dedicated to cover Value Equity strategies. Jennifer is a graduate of the University of Central Florida with a BA in Psychology and received her Chartered Financial Analyst designation in 2003. Melissa Miller, CFA Research Analyst (Financials) Melissa Miller is a Research Analyst for Ceredex Value Advisors. Melissa joined Ceredex in 2009. Prior to joining the firm Melissa worked for First Manhattan Company as a Research Analyst concentrating on domestic financial institutions. Melissa began her career at Dresdner Kleinwort Wasserstein as an Equity Research Analyst covering domestic brokers and asset managers. Melissa is a graduate of Creighton University with a BA in Accounting, and is an MBA graduate from the University of Iowa. Melissa received her Chartered Financial Analyst designation in 2003. As of September 30, 2012. E E V A L U E A D V I S 0 R S Value Equity Analysts Cody Smith, CFA Research Analyst (Health Care & Technology) Cody Smith is a Research Analyst for Ceredex Value Advisors. Cody joined Trusco Capital Management, Ceredex's predecessor firm, in 2007. Prior to joining the firm Cody began his career at Piper Jaffray in 2004, as a Research Analyst covering the Medical Device sector. Cody is a graduate of Drake University with a BSBA in Finance and a minor in Mathematics. Cody received his Chartered Financial Analyst designation in 2009. Nicole G. Blakley, CFA Research Analyst (Energy & Materials) Nicole Blakley is a Research Analyst for Ceredex Value Advisors. Nicole joined Trusco Capital Management, Ceredex's predecessor firm, in 2007 as a Research Analyst Generalist covering all industries. Nicole was promoted to a Research Analyst dedicated to cover Energy and Materials. Prior to joining the firm Nicole began her career at U.S. Trust as a Wealth Manager. Nicole is a graduate of Louisiana State University with a BS in Finance, and is an MBA graduate from the University of South Florida. Nicole received her Chartered Financial Analyst designation in 2008. Jason E. Fraser, CFA Research Analyst (Financials & Telecom) Jason Fraser is a Research Analyst for Ceredex Value Advisors. Jason joined Ceredex in 2011. Prior to joining the firm Jason worked for Raymond James as a Senior Research Associate covering several sectors including Telecom. Jason is a graduate of the University of Florida with a BS in Finance. Jason received his Chartered Financial Analyst designation in 2008. Hein Hanekom, CFA Research Analyst (Utilities) Hein Hanekom is a Research Analyst Generalist for Ceredex Value Advisors. Hein joined Trusco Capital Management, Ceredex's predecessor firm, in 2007 as a Research Analyst Generalist covering all industries. Prior to joining the firm Hein began his career at Wachovia Securities as a Financial Consultant. Hein is a graduate of Western Carolina University with a BS in Finance, and is an MBA graduate from the University of Central Florida. Hein received his Chartered Financial Analyst designation in 2012. As of September 30, 2012. E E V A L U E A D V I S 0 R S Client Team Steve Loncar Client Portfolio Manager Steve Loncar, is a Client Portfolio Manager for Ceredex Value Advisors. Steve joined Trusco Capital Management, Ceredex's predecessor firm, in 1997 as a Performance Analyst. In 2001, Steve was promoted to Research Analyst where he assumed responsibility of equity strategy coverage. Then in 2003, his Research Analyst coverage responsibilities were dedicated to the Value equity strategies. In 2007, Steve was promoted to the Key Account Executive role, handling national account clients for the RidgeWorth organization. In 2010, he assumed a Client Portfolio Manager role for Ceredex Value Advisors. Steve is a graduate of Florida State University with a BS in Finance, and is an MBA graduate from Rollins College. Sarah Thompson Portfolio Specialist Sarah Thompson, is a Portfolio Specialist for Ceredex Value Advisors. Sarah joined Trusco Capital Management, Ceredex's predecessor firm, in 2001 as a Portfolio Accountant. In 2002, Sarah was promoted to Portfolio Assistant where her responsibilities included equity and fixed income strategies. Then in 2007, Sarah transitioned to a client service, marketing, sales and business operations role dedicated to the Value Equity strategies. Prior to joining the firm Sarah began her career at Conseco as an Agency Analyst. Sarah is a graduate of Purdue University with a BA in Psychology/Business. As of September 30, 2012. CE E V A L U E A D V I S 0 R S Client Reports and Custody Statement It is important to receive and review the statement you receive from your custodian. Any client account report provided by our Firm is not intended to replace your custody statement, which should be considered your official record for all pertinent account information. And while our Firm's reports are provided in a different format from the custodian's, and may vary in content and scope, you should compare the asset information to that of your custody statement. Please notify us promptly if you do not receive statements on all accounts from the custodian on at least a quarterly basis. General Economic and Market Commentary Disclaimer This perspective was prepared for institutional clients and prospective institutional clients of Ceredex Value Advisors LLC. It may not be suitable for others, and may not be redistributed or used for any other purpose. Neither Ceredex nor any affiliates make any representation or warranties as to the accuracy or merit of this analysis for individual use. Any comments or general market related projections are based on information available at the time of writing; are for informational purposes only, are not intended as individual or specific advice, may not represent the opinions of the entire firm and may not be relied upon for future investing. All information contained herein is believed to be correct, but accuracy cannot be guaranteed. This information is subject to change without notice as market conditions change, and is not intended to predict the performance of any individual security, market sector, or portfolio. This information may coincide or conflict with activities of the portfolio managers. Investors are advised to consult with their investment professional about their specific financial needs and goals before making any investment decisions. Past performance is not indicative of future results. Holdings Disclosure The information provided in this report should not be considered a recommendation to purchase or sell any particular security. There is no assurance that any securities discussed herein will remain in an account's portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed do not represent an account's entire portfolio and in the aggregate may represent only a small percentage of an account's portfolio holdings. It should not be assumed that any of the securities transactions or holdings discussed were or will prove to be profitable, or that the investment recommendations or decisions we make in the future will be profitable or will equal the investment performance of the securities discussed herein. Indexes Referenced Russell 1000 Value: Is an unmanaged index which is comprised of the securities in the Russell 1000 Index, as defined by Russell Investment Group, with less -than - average growth orientation. Companies in this index generally have low price -to - book and price -to -earnings ratios, higher dividend yields, and lower forecasted growth values. Russell Midcap Value: Is an unmanaged index which measures the performance of those securities found in the Russell Midcap universe, as defined by Russell Investment Group, with lower price -to -book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value Index. Russell 2000 Value: Is an unmanaged index which is comprised of the securities in the Russell 2000 Index, as defined by Russell Investment Group, with a less -than - average growth orientation. Companies in this index generally have low price -to - book and price -to -earnings ratios. Investors cannot invest directly in an index. Investment Performance Past performance is not indicative of future results. Unless otherwise stated as net - of -fees, performance data related to accounts managed by Ceredex represents returns gross of investment management fees, i.e., performance has not been reduced by advisory fees and other expenses that may be incurred. See Ceredex's Form ADV, Part 2 for a description of investment advisory fees. The performance information reported herein may be for a variety of products which have different methods of presenting performance data, i.e. net of fees, gross of fees, or a combination of these. This information should not be evaluated independent of or without reference to the investment advisory agreement that more specifically addresses applicable investment advisory fees. Fees have a compounding effect on cumulative results. For example, assume the account achieves a 10% annual return prior to the deduction of fees each year for a period of ten years. If an annual fee of 0.5% of assets under management were charged each of the ten years, the resulting annual average return net of fees would be reduced to 9.48%. Investment Risk All investments involve risk. Equity securities (stocks) may be more volatile and carry more risk than other forms of investments. Value -based investments are subject to the risk that the broad market may not recognize their intrinsic value. Dividends reflect past performance and there is no guarantee they will continue to be paid. There is no guarantee a specific investment strategy will be successful. Individual investors are advised to consult with their investment professional about their specific financial needs and goals before making any investment decisions. Sector Weightings and Portfolio Characteristics The sector weightings and portfolio characteristics are presented as of the date shown on this presentation, and may change without notice. A complete list of sector weightings and individual security positions for any specific period are available upon request. Investment process, strategies, and procedures detailed in this presentation are intended to be general guidelines, subject to market conditions and client -specific investment guidelines and restrictions, and are measured at time of purchase. Ceredex Value Advisors LLC may deviate from these guidelines if market conditions warrant, or if the investment professionals deem doing so would be in the clients' best interests. Guidelines do not guarantee any reduction of risk or loss. © 2013 Ceredex Value Advisors LLC, Certium Asset Management LLC, Seix Investment Advisors LLC, Silvant Capital Management LLC, StableRiver Capital Management LLC and Zevenbergen Capital Investments are registered investment advisors with the SEC and members of the RidgeWorth Capital Management, Inc. network of investment firms. © 2013 RidgeWorth Investments. RidgeWorth Investments is the trade name for RidgeWorth Capital Management, Inc. and an investment advisor registered with the SEC. Collective Strength Individual Insight is a federally registered service mark of RidgeWorth Investments. 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Casey — Marketing/Client Service Harry C. Radovich — Co -Portfolio Manager Victor A. Zollo, Jr. — Founder, Co -Chief Executive Officer DePrince, Race & Zollo, Inc. 250 Park Avenue South • Suite #250 • Winter Park, FL 32789 (407) 420-9903 DePrince, Race & Zollo, Inc. Independently owned Style consistency 27 year execution of our value methodology Small, focused firm with goal to provide superior performance and service to the institutional marketplace Total firm assets: $6.6 Billion Conservative asset caps on all value income investment products U. S . Large -Capitalization International -U.S. Small -Capitalization -Global U. S . Micro -Capitalization Emerging Markets U. S . SMID-Capitalization Alternative Strategies 11 Long-term continuity of team 28 Investment Professionals 13 Administrative Staff DePrince, Race & Zollo, Inc. Representative List of Clients Catholic Health Partners Commissioners of the Land Office of the State of Oklahoma ConAgra Foods, Inc. Fairfax County Russell Investment Group GCIU Supplemental Retirement & Disability Fund Houston Municipal Employees Pension Masonic Homes National Elevator NCR Pension Trust Pennsylvania Municipal Retirement System The Southern Company SPX Corporation ThyssenKrupp USA, Inc. University Hospitals Health System United Parcel Service Via Christi Health System Investment Philosophy DePrince, Race & Zollo, Inc. Equity Philosophy We believe: Undervalued stocks with above-average dividend yield and a fundamental catalyst provide the opportunity for superior long-term total returns Bottom-up stock selection is the key component to performance Research moves up from company to industry and economy, to confirm improving fundamental prospects Funds are moved into stocks which have better risk/reward prospects 800.00% 600.00% 400.00% 200.00% 0.00% Yield Investing We believe: Dividend yield provides a meaningful portion of the market's return Dividend yield offers concrete evidence of real earnings Provides the most reliable valuation measure The return of cash to shareholders in the form of dividends encourages capital allocation discipline Cumulative performance since inception of the indexes, 12/31/1990 — 09/30/2012 Russell 1000 Value Russell 1000 Value Russell 1000 Groh-,th Russell 1000 Groh-,th Total Return Price Appreciation Total Return Price Appreciation (Excluding Dividends) (Excluding Dividends) Source: Russell Investments Co. 6 Buy/Sell Decision The Buy Decision Three Equally Balanced Factors Identify a universe of stocks with above-average yield and a market capitalization greater than or equal to $2 Billion Within this universe select relatively undervalued stocks by reviewing the following criteria: 20 -year relative valuation Yield Price to Book Price to Earnings Price to Cash Flow Fundamental analysis to identify improving prospects Establish relative price targets for stocks which meet all three criteria Buy stocks with expected upside two times the downside The Sell Decision Three Equally Balanced Factors Yield on the stock falls below the acceptable limit 90% of S&P 500 Relative price target has been achieved: Expected upside now half the downside There are other stocks in our buy process which have better risk/reward prospects The company is not performing as expected Review fundamentals and valuation target The sector begins to look less favorable Review fundamentals and valuation target If one of the three criteria is violated, the stock is sold Large -Cap Income Three Equally 'd Factors Johnson Controls Inc. 2.6% P/E 0.80 - 1.10x Fundamental Catalyst -Power Solutions business is benefiting from fuel -saving "start -stop" technology in new vehicle builds, requiring the use of JCI's higher priced, higher margin Advanced Glass Mat (AGM) batteries. • Building Efficiency segment levered to green spending initiatives, with 80% of revenues from service and retrofit activity. JCI has high exposure to government buildings, schools, and hospitals, where there is a big focus on energy efficiency. • JCI increasingly viewed as a multi -industry name, which carries positive implications for valuation. Supported by JCI's strong balance sheet, large component of recurring revenue, and exposure to late cycle end markets, such as commercial constriction. Dover Corp. Yield 2.4% Relative Va at P/E 0.85 - 1.05x Fundamental Catalyst • Significant margin expansion potential, with opportunities to consolidate and rationalize operations between business segments and reduce costs within the manufacturing base. Communications Technology margins expected to improve from currently depressed levels related to automation and product ramp -up costs. • Putting underleveraged balance sheet to work, net debt to capital at 20% is near historical lows and DOV has a strong track record of executing and integrating bolt -on acquisitions. •DOV's energy business experiencing a positive mix shift as customers shift investment from gas to oil drilling activity. Guess? Inc. Yield 3.2% Relative Va at P/E 0.70 - 1.00x Fundamental Catalyst • Currently in the midst of a domestic turnaround program, including purposeful reductions in inventory levels, which have weighed on comparable store sales and stepped up marketing efforts. Planned inventory reductions should be complete in 3Q12, and we expect comps to begin improving thereafter. • Sales in their southern European region have show signs of stabilization and should be less of a drag in future quarters. Results in Germany and Russia continue to be strong and provide a nice offset to the southern region. • Strong balance sheet with over $5 in net cash per share. Substantial repurchase program in place. 10 See attached disclosure DePrince, Race & Zollo, Inc. Large -Cap Value Income Representative List of Holdings September 30, 2012 %Portfolio Yield Dover Corp. 2.1 2.4 JP Morgan Securities 2.1 3.0 Murphy Oil Corp. 2.0 2.3 CISCO Systems Inc. 2.0 2.9 Philips Electronics 2.0 4.0 Johnson Controls Inc. 2.0 2.6 Marathon Oil Corp. 1.9 2.3 Prudential Financial Inc. 1.9 2.7 Emerson Electric Co. 1.9 3.3 Marathon Petroleum Corp. 1.8 2.6 11 See attached disclosure 30 25 20 DePrince, Race& Zollo, Inc. Large -Cap Value Income Sector Allocation September 30, 2012 -10 10 5 I ct H s- Q O A V1 an c t c "d O � an H ct H • DePrince Race & Zollo As of 09/30/12 ® DePrince Race & Zollo As of 3/31/12 • Russell 1000 Value ■ S&P 500 12 See attached disclosure DePrince, Race & Zollo, Inc. Large -Cap Value Income Value Added Through Activity 44.49 36.60 34.19 30.43 29 90 18.24 15.17 0 1 � -2.68 6.96 _7.74 -8.1 00 10.19 15.63 -39.20 -43.01 —0.77 -1.96 -50 ' ' 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs 4 Ctrs Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended Ended 12/31/97 12/31/98 12/31/99 12/31 /00 12/31 /01 12/31 /0212/31 /03 12/31 /04 12/31 /05 12/31 /06 12/31 /07 12/31 /08 12/31 /09 12/31/10 12/3 1 /11 Calculated quarterly and annualized. ■ UnmanagedE Managed 13 See attached disclosure Equity Characteristics 14 DePrince, Race & Zollo, Inc. Large -Cap Value Income Equity Characteristics September 30, 2012 Yield P/E 2012 Market Cap $ Billion DePrince, Race & Zollo M Russell 1000 Value ■ S&P 500 15 Investment Performance 16 Performance Objectives • To consistently outperform the Russell 1000 Value Index 17 35 30 25 20 15 MIM 5 0 DePrince, Race & Zollo, Inc. Large -Cap Value Income Investment Performance September 30, 2012 1.51 1.05 -090 3092 0.20 27.1 -5 Tiventy -Five Years Tiventy Years Fifteen Years Ten Years Seven Years Five Years Three Years One Year Ended 09/30/12 Ended 09/30/12 Ended 09/30/12 Ended 09/30/12 Ended 09/30/12 Ended 09/30/12 Ended 09/30/12 Ended 09/30/12 Annualized Annualized Annualized Annualized Annualized Annualized Annualized ■ DePrince, Race & Zollo E Russell 1000 Value ■ S&P 500 18 See attached disclosure Biographies 19 PARTNERS Gregory M. DePrince —Founder and Chairman Mr. DePrince is a Founder of the firm and sits on the firm's Management Committee, providing strategic direction for the firm. Prior to forming DePrince, Race & Zollo, Inc., Mr. DePrince was a Director and Partner at SunBank Capital Management. Prior to that, he was Director of Special Equity Investments at ASB Capital Management in Washington, D.C., where he was Portfolio Manager for the Equity Income Fund and Special Equity Fund. Mr. DePrince holds the Chartered Financial Analyst designation. He received his Bachelor of Fine Arts from Wittenberg University and Masters of Business Administration from George Washington University. John D. Race — Founder and Co -Chief Executive Officer Mr. Race is a Founder of the firm and sits on the firm's Management Committee. Mr. Race manages the daily operations of the firm and serves as the Portfolio Manager of the firm's Alternative Strategies discipline, overseeing its portfolio management, research and trading functions. Prior to forming DePrince, Race & Zollo, Inc., Mr. Race was a Director, Partner and President of SunBank Capital Management. Prior to that, Mr. Race was employed by the Office of the Comptroller of the Currency. Mr. Race received his Bachelor of Science in Business and Masters of Business Administration from Rollins College in Winter Park, Florida. Victor A. Zollo, Jr. — Founder and Co -Chief Executive Officer Mr. Zollo is a Founder of the firm and sits on the firm's Management Committee. Mr. Zollo manages the daily operations of the firm and oversees marketing and client service for all investment disciplines. Prior to forming DePrince, Race & Zollo, Inc., Mr. Zollo was a Director and Partner of SunBank Capital Management responsible for marketing, sales and client service. Mr. Zollo is a past Board Member of the Association of Investment Management Sales Executives. He received his Bachelor of Arts in Economics from Rollins College in Winter Park, Florida. Mr. Zollo is a Trustee of Rollins College. Kelly W. Carbone — Partner Ms. Carbone joined DePrince, Race & Zollo, Inc. in 1995. She is a Partner of the firm and sits on the firm's Management Committee. Ms. Carbone serves as the Director of Marketing for all investment disciplines. Prior to joining DePrince, Race & Zollo, Inc., Ms. Carbone was employed at SunBank Capital Management and was responsible for portfolio management and client service. Ms. Carbone is a past Board Member of the Association of Investment Management Sales Executives. Ms. Carbone received her Bachelor of Science in Finance from the University of Florida and Masters of Business Administration from the University of Central Florida. Jill S. Lynch — Partner Ms. Lynch joined DePrince, Race and Zollo, Inc. in 1995. She is a Partner of the firm and sits on the firm's Management Committee. Ms. Lynch serves as the Co -Portfolio Manager of the Large -Cap Value discipline. Ms. Lynch oversees the portfolio management, research and trading functions as they relate to the firm's Large -Cap Value discipline. Prior to joining DePrince, Race & Zollo, Inc., Ms. Lynch was employed at SunBank Capital Management as a research analyst in the value area. Ms. Lynch received her Bachelor of Science in Finance from the University of Central Florida and Masters of Business Administration from Rollins College in Winter Park, Florida. Gregory T. Ramsby — Partner Mr. Ramsby joined DePrince, Race & Zollo, Inc. in 1996. He is a Partner of the firm and sits on the firm's Management Committee. Mr. Ramsby serves as the Co -Portfolio Manager of the Small -Cap and Micro -Cap Value disciplines. Mr. Ramsby oversees the portfolio management, research and trading functions of the firm's Small -Cap and Micro -Cap Value disciplines. Prior to j oining DePrince, Race & Zollo, Inc., Mr. Ramsby was employed at First Union Capital Management as an equity analyst and Associate Portfolio Manager. Prior to that, he was an equity analyst at NationsBank Investment Management. Mr. Ramsby received his Bachelor of Science in Finance from Oglethorpe University and Masters of Business Administration from the University of Notre Dame. 20 LARGE -CAP VALUE Jill S. Lynch — Partner and Co -Portfolio Manager Ms. Lynch joined DePrince, Race and Zollo, Inc. in 1995. She is a Partner of the firm and sits on the firm's Management Committee. Ms. Lynch serves as the Co -Portfolio Manager of the Large -Cap Value discipline. Ms. Lynch oversees the portfolio management, research and trading functions as they relate to the firm's Large -Cap Value discipline. Prior to joining DePrince, Race & Zollo, Inc., Ms. Lynch was employed at SunBank Capital Management as a research analyst in the value area. Ms. Lynch received her Bachelor of Science in Finance from the University of Central Florida and Masters of Business Administration from Rollins College in Winter Park, Florida. Harry C. Radovich — Co -Portfolio Manager Mr. Radovich joined DePrince, Race & Zollo, Inc. in 2009. He is Co -Portfolio Manager for the Large -Cap Value discipline. Prior to joining DePrince, Race & Zollo, Inc., Mr. Radovich was employed at B1ackRock as a Senior Research Analyst specializing in technology and financials on their value team. Prior to that, he was a Senior Insurance Analyst for Dean Witter and Reynolds. Mr. Radovich holds the Chartered Financial Analyst designation. He received his Bachelor of Science in Finance and his Masters of Business Administration from St. John's University. Adam T. Lawson — Director of Research Mr. Lawson joined DePrince, Race & Zollo, Inc. in 2003. Mr. Lawson is the Director of Research for the Large - Cap Value discipline. Mr. Lawson holds the Chartered Financial Analyst designation. He received his Bachelor of Science in Economics and Bachelor of Arts in Computer Science from Duke University and his Masters of Business Administration from the University of Florida. Laurie M. Harlan — Senior Research Analyst Ms. Harlan joined DePrince, Race & Zollo, Inc. in 2002. Ms. Harlan is a Senior Research Analyst for the Large - Cap Value discipline. Ms. Harlan was a summer intern at DePrince, Race & Zollo, Inc. prior to joining the firm full time. Ms. Harlan received her Bachelor of Business Administration with a concentration in finance from Stetson University. 21 CLIENT SERVICE/MARKETING Victor A. Zollo, Jr. — Founder and Co -Chief Executive Officer Mr. Zollo is a Founder of the firm and sits on the firm's Management Committee. Mr. Zollo manages the daily operations of the firm and oversees marketing and client service for all investment disciplines. Prior to forming DePrince, Race & Zollo, Inc., Mr. Zollo was a Director and Partner of SunBank Capital Management responsible for marketing, sales and client service. Mr. Zollo is a past Board Member of the Association of Investment Management Sales Executives. He received his Bachelor of Arts in Economics from Rollins College in Winter Park, Florida. Mr. Zollo is a Trustee of Rollins College. Kelly W. Carbone — Partner and Director of Marketing Ms. Carbone joined DePrince, Race & Zollo, Inc. in 1995. She is a Partner of the firm and sits on the firm's Management Committee. Ms. Carbone serves as the Director of Marketing and Client Service for all investment disciplines. Prior to joining DePrince, Race & Zollo, Inc., Ms. Carbone was employed at SunBank Capital Management and was responsible for portfolio management and client service. Ms. Carbone is a past Board Member of the Association of Investment Management Sales Executives. Ms. Carbone received her Bachelor of Science in Finance from the University of Florida and Masters of Business Administration from the University of Central Florida. J. Kurt Wood — Director of Client Service Mr. Wood joined DePrince, Race & Zollo, Inc. in 2004. Mr. Wood serves as the Director of Client Service for all investment disciplines. Prior to joining DePrince, Race & Zollo, Inc., Mr. Wood was a Partner for an institutional consulting and marketing firm. Mr. Wood began his career at SunBank Capital Management and was responsible for institutional marketing and client service. Mr. Wood is a past Board Member and President of the Association of Investment Management Sales Executives. Mr. Wood received his Bachelor of Science in Business Administration from Clemson University. Katie A. Byrne — Client Service/Portfolio Management Ms. Byrne joined DePrince, Race & Zollo, Inc. in 2003. Ms. Byrne's responsibilities include portfolio management, research and client service. Prior to joining DePrince, Race & Zollo, Inc., Ms. Byrne was a Vice President in corporate banking for Wachovia Bank. Ms. Byrne received her Bachelor of Business Administration in Finance from Stetson University. Matthew G. Williams — Marketing/Client Service Mr. Williams joined DePrince, Race & Zollo, Inc. in 2003. Mr. Williams' responsibilities include marketing, portfolio management, research and client service. Mr. Williams was an intern at DePrince, Race & Zollo, Inc. prior to joining the firm full time. Mr. Williams received his Bachelor of Arts in International Relations from Rollins College in Winter Park, Florida. Brian J. Casey — Marketing/Client Service Mr. Casey joined DePrince, Race & Zollo, Inc. in 2005. Mr. Casey's responsibilities include marketing, portfolio management, research and client service. Prior to joining DePrince, Race & Zollo, Inc., Mr. Casey was employed at HomeBanc as a mortgage consultant. Mr. Casey received his Bachelors of Arts in Political Science from Rollins College in Winter Park, Florida. Ami E. Fox — Client Service/Portfolio Management Ms. Fox joined DePrince, Race & Zollo, Inc. in 2007. Ms. Fox's responsibilities include portfolio management, research and client service. Ms. Fox was an intern at DePrince, Race & Zollo, Inc. prior to joining the firm full time. Ms. Fox received her Bachelor of Arts in International Business from Rollins College in Winter Park, Florida. Jason T. Palma — Marketing/Client Service Mr. Palma joined DePrince, Race & Zollo, Inc. in 2008. Mr. Palma's responsibilities include marketing, portfolio management, research and client service. Prior to joining DePrince, Race & Zollo, Inc., Mr. Palma worked for a lobbying firm in Washington, DC. Mr. Palma received his Bachelor of Arts in International Relations and Political Science from Rhodes College in Memphis, Tennessee. 22 COMPLIANCE/OPERATIONS/ADMINISTRATION Angela A. Johnston, CPA — Chief Financial Officer and Chief Compliance Officer Ms. Johnston joined DePrince, Race & Zollo, Inc. in 2009. Ms. Johnston sits on the firm's Management Committee and serves as the Chief Financial Officer and Chief Compliance Officer for the firm. She oversees the compliance, financial and administrative affairs of the firm. Prior to joining DePrince, Race & Zollo, Inc., Ms. Johnston was the Chief Financial Officer for a medical device company where she played a key role in their successful Initial Public Offering on the London Stock Exchange. She spent the early part of her career with Arthur Andersen LLP before becoming Financial Controller at Capital Cargo International Holdings Inc., an international cargo airline, where she was responsible for all company -wide accounting functions including financial and compliance reporting, implementing and monitoring processes and internal controls and the oversight of audits. She received her Bachelor of Science in Accountancy from the University of Florida and a Masters of Science in Accountancy from the University of Central Florida. Kristen M. Hughes — Compliance Associate Ms. Hughes joined DePrince, Race & Zollo, Inc. in 2005. Ms. Hughes works with our Chief Compliance Officer and assists in all matters related to compliance for the firm. Prior to joining DePrince, Race & Zollo, Inc., Ms. Hughes worked in the Retirement Services Department at SunTrust Bank. Ms. Hughes received her Bachelor of Science in Business Administration from the University of Central Florida Erin B. Katzman, CPA — Senior Accountant/Compliance Officer Ms. Katzman joined DePrince, Race & Zollo, Inc. in 2012. Ms. Katzman works with the firm's Chief Financial Officer and assists in all accounting and compliance related matters. Prior to joining DePrince, Race & Zollo, Inc., Ms. Katzman worked as a senior auditor at Ernst & Young. She spent the early part of her career with Winn-Dixie where she assisted corporate accounting. Ms. Katzman received her Bachelor of Science in Accountancy from the University of Florida, a Masters of Science in Accountancy from the University of North Florida, and a Masters in Business Administration from Florida Atlantic University. Shimeh Vaziri— Director of Operations Ms. Vaziri joined DePrince, Race & Zollo, Inc. in 1995. Ms. Vaziri serves as the Director of Operations for the firm and oversees the back office and operational functions of the firm, as well as serving in the role as Alternate Compliance Review Officer. Prior to joining DePrince, Race & Zollo, Inc., Ms. Vaziri was employed by SunBank Capital Management where she served as the Supervisor of Operations. She received her Bachelor of Arts, Major in French from the University of Central Florida. 23 Fee Schedule 24 DePrince, Race & Zollo, Inc. Fee Schedule Large-CapValue 60 basis points on all amounts Minimum account size $5,000,000 25 Year 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 2001 2000 1999 1998 1997 1996 03/31/95- 12/31/95 DePrince, Race & Zollo, Inc. LARGE CAP VALUE COMPOSITE March 31, 1995 through December 31, 2011 Composite Index 3 -Year 3 -Year Ammalized Ammalized Percenta-e Gross Net Index Standard Standard Number of Composite Total Composite of Firm Refirn(%) Refirn(%) Refirn(%) Deviation Deviation Portfolios Dispersion(%) Assets($milhons) Assets 0 72 ' i 3 3 0.39 25.95% 20.69% 42 0.54 1,477 22.42% 18.24 17.54 15.51 46 0.33 1,619 27.75% 44.49 43.65 19.69 42 0.64 1,356 27.84% ' '9 P) i 9 ,., k j <; .:, k 55 0.45 1,131 36.35% 2 i rfx i ; 2-k 0 1% i 69 0.23 2,067 40.05% 21.22 20.50 22.21 71 0.17 2,458 45.77% 4.53 391 7.04 62 0.13 2,072 4191% 14.77 14.09 16.49 49 0.08 1,446 31.80% 34.19 33.41 30.03 37 0.33 952 28.26% z>, W i x 66 i 1 ®i 25 N/A 525 25.35% 1398 13.30,) i 8 0.07 298 16.57% 15.21 14.53 7.02 12 0.22 507 2896% 2.24 1.63 7.35 23 0.17 732 43.03% 5.45 4.62 15.64 29 0.15 1,229 56.72% 30.43 29.43 35.18 30 0.30 1,343 68.30% 22.12 21.18 21.64 34 0.17 1,139 83.09% 23.52 22.91 26.32 24 1 N/A 829 86.98% DePrince, Race & Zollo, Inc. has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS R�,). 1. DePrince, Race & Zollo Inc. (DRZ) is an independent investment management firm, founded in 1995, that manages equity portfolios primarily for U.S. institutional clients. 2. DePrince, Race & Zollo, Inc. claims compliance with the Global Investment Performance Standards (GIPS) and has prepared and presented this report in compliance with the GIPS standards. DePrince, Race & Zollo, Inc. has been independently verified for the periods March 31, 1995 through December 31, 2011 by The Spaulding Group. The verification report is available upon request. 3. Additional information regarding the firm's policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. 4. DePrince, Race & Zollo, Inc.'s Lame Cap Composite invests in U.S. stocks, ADRs, and foreign domiciled stocks traded in US dollars on the major US exchanges that have a have a minimum dividend yield equal to the S&P 500's dividend Nreld at the time of purchase and a market capitalization in excess of $2.0 billion. 5. Past performance is not indicative of future results. The actual return and value of an account will fluctuate and at any point could be worth more or less than the amount invested. Individual account performance will vary according to individual client investment objectives. 6. The benchmark is the Russell 1000 Value Index which measures the performance of those Russell 1000 Value companies with lower price -to book ratios and lower forecasted growth values. The volatility of the Russell 1000 Value Index may be materially different from that of the performance composite. In addition, the composite's holdings may differ significantly from the securities that comprise the Russell 1000 Value Index. This index have not been selected to represent appropriate benchmark to compare to the strategies performances, but rather are utilized to alloy, for comparison of the strategies performances to that of well-known and syidely recognized index. 7. Total time -weighted rates of return are shown and expressed in US dollars. Computations include the reinvestment of all dividends and capital gains. For investments in ADRs and foreign domiciled companies, dividends are included net of any withholding taxes. 8. The composite was created in July 1995. DRZ's list of composite descriptions is available upon request. This composite requires a minimum asset level of $1,000,000 (one million dollars) for inclusion. 9. Net performance returns are calculated by deducting the highest investment advisory fee. A client's gross return will be reduced by the advisory fee and any_ other expenses. 10. DePrince, Race & Zollo, Inc.'s standard fee schedule for Lame Cap Value is 0.60°'0 on all amounts. 11. Composite dispersion is calculated using the standard deviation of portfolios that syere included in the composite for the entire year; it is not presented for periods with 5 or fewer portfolios. The 3 -year annualized ex -post standard deviation measures the variability of the Composite and the Benchmark returns over the preceding 36 -month time period and is not presented for composites with inception dates of less than 36 months. 12. All information contained in this document is provided for informational purposes only and should not be deemed as a recommendation to buy the securities mentioned. The securities highlighted in this document, if any, represent recent holdings. Each quarter, DePrince, Race & Zollo Inc. uses the same objective, non-performance based criteria to select these securities. A list of all DePrince Race & Zollo Inc.'s recommendations for the preceding 12 months is available upon request. It should not be assumed that recommendations made in the future will be profitable or will equal the performance of the securities discussed in this report. 13. If clients are listed in this document, it is not known whether they approve or disapprove of DePrince Race & Zollo Inc. or the advisors- services it provides. If included, the representative clients listed in this document are a cross section of current accounts that maintain similar investment objectives as those expressed by DePrince Race & Zollo Inc.'s prospective clients. This list may include accounts that are not invested in the investment strategy described in this document. 14. The performance results of the DePrince, Race & Zollo's ("DRZ") Lame Cap Value Composite referenced in this letter prior to April 3, 1995, syere attained by Greg DePrince while employed at ASB Capital Management and SunBank Capital Management, N.A. Performance for period 9.'30 85-07'31 89 was that of Mr. DePrince while employed at ASB Capital Management. Performance for period 8 01'89-3 3195 was that of Mr. DePrince while employed at SunBank Capital Management, N.A. No other persons played a significant pat in achieving the performance of this Lame Cap Value product during that time. While under the management of Greg DePrince, the investment objectives, policies, and strategies of ASB and SunBank's Lame Cap Value products syere substantially similar in all material respects to those of DRZ's Lame Cap Value Product. The same analytical methods for identifying potential investments for DePrince, Race & Zollo's Lame Cap Value product syere those used at Capital Management and SunBank Capital Management, N.A. 26