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Agenda 08-22-16CITY OF BOYNTON BEACH BOARD OF TRUSTEES GENERAL EMPLOYEES' PENSION PLAN Quarterly Board Meeting Monday August 22, 2016 Location: Commission Chambers, City Hall 100 E. Boynton Beach Blvd. Boynton Beach, FL 33435 Plan Administrator: (561) 624-3277 Time: 1:30 PM AGENDA I. Call to Order II. Approval of Agenda III. Approval of Minutes A. Regular Quarterly Meeting — May 23, 2016 IV. Presentations A. Gabriel Roeder Smith & Company: Peter Strong 1. Supplemental Actuarial Study - Impact of Lowering Investment Return Assumption V. Investment Report A. Southeastern Advisory Services: Jeff Swanson (Investment Consultant) 1. Quarterly Investment Performance Report June 30, 2016 VI. Correspondence No Correspondence VII. Old Business A. Update on Gregory Hoggatt's Pension Participation Transfer B. Rehire after Retirement VIII. New Business A. Attorney Report 1. Tribune Litigation B. Administrative Report 1. Engagement Letter for FY2016 Audit from Cherry Bekaert LLP 2. FPPTA Fall & Winter Trustee Schools 3. July 2016 Interim Financials 4. Warrant for Invoices 5. Benefit Approvals IX. Public Comments X. Adjournment NEXT QUARTERLY MEETING DATE: Monday November 28th at 1:30 p.m. 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. BOYNTON. BEACH GENERAL EMPLOYEES' PENSION FUND STATEMENT OF INVESTMENT POLICY GOALS AND GUIDELINES Adopted: PURPOSE' The Board of Trustees of the City of Boynton Beach General Employees' Pension Fund has established this Statement of Investment Policy. This policy hasbeen identified by the Board as .having the greatest expected investment return, and the :resulting positive impact on asset values,' funded status, and benefits, without exceeding a prudent' level of risk. The Board determined this policy after evaluating the implications of increased investment return versus increased variability of return for several potential investment policies with varying :commitments to different asset classes. . This Statement of Investment Policy is ,intended to complement the investment guidelines provided in applicable State Statutes, and local ordinances. The purpose of this Statement is to: 1) Provide the investment manager a more accurate understanding of the Trustees' investment.objectives and, 2) Indicate the criteria by which the investment manager's performance will be evaluated. GENERAL OB7ECTIVES The primary investment objective of the Boynton Beach General Employees' Pension Fund is to achieve the absolute return objective over the near-term, intermediate-term and longer-term time periods. The secondary objective is to achieve moderate long-term real growth of the assets while minimizing the volatility of returns. 1. To achieve these objectives, the Board of Trustees seeks to create a conservative, well diversified and balanced portfolio of asset classes managed in separate accounts, mutual funds,! commingled funds, and/or limited partnerships. The Board has determined that one or more outside investment managers'shall be retained to assure that all investments are mana ed in both a rodent and grofessional manner and in corn liance with the stated investment uidelines. - INVESTMENT MANAGER RESPONSIBILITIES. 1) Within the guidelines and restrictions set forth herein, it is the intention of the Board of Trustees to give each investment manager full investment discretion with respect to assets under its management. The investment managers shall discharge their responsibilities in the same manner.as if the Fund were governed by the fiduciary responsibility provisions of the Employee Retirement Income Security Act of 1974 (ERISA). Although the Fund Trustees .acknowledge that ERISA does not apply to the Fund as a governmental fund, it hereby imposes the fiduciary provisions of ERISA upon each investment manager, whose performance shall conform to the statutory provisions, rules, regulations, interpretations and case law of ERISA. Each investment manager shall acknowledge, in writing, that it is a named fiduciary of the Fund. 2) Each investment manager is expected to provide .any reasonable information requested by the Board of Trustees. At a minimum, each manager shall provide a quarterly report detailing their investment activity, the portfolio's current value and any changes in investment philosophy or strategy. Each investment manager is expected to meet with the Board of Trustees or their designated representatives periodically to review investment performance and philosophy. 3) Unless otherwise provided by the Fund's Custodian, each investment manager will monitor portfolio activity to minimize uninvested cash balances. 4) Each investment manager shall be responsible only for those assets under their management. 5) It will be the responsibility of each investment manager to review the monthly valuations provided by the Fund's custodian and to note, in writing, any significant discrepancies from the valuations provided in their own reports. 2 Florida Statute 112 1. EXPECTED ANNUAL RATE OF. RETURN: With consideration to rates of return from different asset classes, the Board of Trustees has crafted its investment program in order to deliver an expected rate of return similar to that of the actuarial assumed rate. The Board shall I etermine for each actuarial valuation, the total expected annual rate of return for the current year, for each of the next several years and for the long term thereafter. The total. expected annual rate of return is anticipated to be similar to the actuarial assumed rate of return.. This determination is to be filed with the Department of Management Services and with the plan sponsor and consulting actuary:. 2. CONTINUING EDUCATION: The Board of Trustees relies on its consultants and professionals to provide continuing education on pension and investment issues., The Board of Trustees also recognize state and regional. conferences, as a source of continuing education. The Trustees are encouraged to attend conferences, schools, and other functions periodically in order to fulfill this:requirement. 3. FILING: OF INVESTMENT POLICY: The investment policy is to be promptly filed with the Department of Management Services, plan sponsor and consulting actuary. The effective date of -the investment policy and any amendment thereto shall be the 31st calendar day following the filing date with the plan. sponsor. 3 INVESTMENT RIECTIVES Given the above stated purpose of the Boynton Beach General Employees' Pension Fund, the Board of Trustees recogniies the necessity of a long -term hodion when formulating investment policies and, strategies.. However, shorter -term investment goals have been established. and are intended to provide quantifiable benchmarks to measure and evaluate portfolio return and risk. Most .investment styles require a, full market cycle to allow an investment manager to demonstrate his abilities., A full market cycle is generally defined as a three to five year time period. As a .result, performance results will be measured over a three to five year period. Performance over shorter time periods Will be monitored as a means of identifying the trend of results... The specific- investment objectives of the Boynton Beach General Employees' Pension, Fund areas follows: Absolute Return 'Objective: The goal of the Boynton Beach General Employees' Pension Fund shall be to achieve an average annual rate of return greater than 7.800/a net of investment expenses, over the longer term (3 to 5 years). Market Return Objective: In order to provide a reference of fund return and risk relative to a similar basket of passive assets, the board has developed a `Target Index". The fund's objective is to achieve a rate of return over the long term (3 -to 5 years), which exceeds the return of a Target Index: The Target Index for the Boynton Beach General Employees' Pension Fund is defined as a 35% investment in the Russell 1000 Stock Index, a 10% investment in the Russell 2000 Stock, Index, a 20% investment in the MSCI Europe, Australasia and Far East Stock Index, a 15% investment in the NCREIF Property Index and a 20% investment in the Barclays Capital Aggregate Bond Index. Peer Return Objective: It is expected that the total rate of. return earned by the Fund and the returns earned by the stock and bond portions of the portfolio will each rank in the top 50% when compared to a representative universe of other, similarly managed portfolios. 4 . . . 1 The above investment objectives have been established for the. entire Boynton Beach General Employees' Pension Fund. The specific investment objectives for each investment manager will be outlined in addenda to this overall Statement of Investment' Policy. INVESTMENT GUIDELINES The Board of Trustees has established the following target asset allocation for the entire Boynton Beach General Employees'.Pension: Fund: Target Permissible, Allocation Range Representative (at market) (at market) Benchmark Equity: Domestic Large Cap Equity 35% 30% -60% Russell 1000 Domestic Small / Mid Cap 10% 5% - 20% Russell 2000/ 2500 Foreign Equity 20% 5% - 25% EAFE Total Equity 65% Fixed Income & Equivalents: Fixed Income 20% 10% - 70% Barlays Capital Agg / Int . Direct Real Estate* - 15% 5% - 25% NCREIF Property.Index Cash Equivalents 0% 0% - 10% T-bills *.Until 15% in real estate is achieved the target index remain 10% NCREIF/ 25% B A. It may be necessary to rebalance the portfolio periodically to maintain policy targets and diversification. The Board of Trustees will monitor each component of the Retirement Plan (including asset class, mutual fund, and portfolio manager asset values) and will adjust as necessary at quarterly meetings. To implement this strategy, the Board has chosen to hire one or more professional investment managers. Specific assignments and additional guidelines for each investment manager will be outlined in addenda to this overall Statement of Investment Policy. The following guidelines and restrictions apply to all fund investments. 5 In accordance with the policies established by the Board of Trustees, the assets of the Boynton Beach General Employees' Pension Fund shall be invested in a diversified portfolio of securities, funds or pooled assets, provided they meet the following criteria: EQUITY SECURITIES: 1) .Investments in equity securities shall be limited to no more than 65% (at cost value) of the Fund's total asset value. 2) Investments in-all equity securities shall be limited to fully and easily negotiable equity securities. 3) Investments in, foreign securities shall ,be limited to 25% (at market valuation) of the total investment portfolio. _ The -board' may achieve diversification in foreign equity through commingled fund or institutional mutual fund_ vehicles. These pooled investments are considered an investment in foreign securities. a) American Depository Receipts (ADRs) and foreign ordinary securities traded on domestic exchanges are United States . dollar-denominated securities listed and traded on a United States exchange and are considered part of the-ordinary investment strategy of the Board. These securities are not considered foreign securities and may be purchased by separate account managers without limitation. 4) Exchange traded funds (ETFs) may be utilized but may not exceed 10% (at market valuation) of any equity manager`s portfolio.: 5) No more than 20% of the equity securities are to be invested in small or mid-cap stocks. The Board defines small and mid= cap stocks the stocks whose market capitalization is less than $5 billion dollars. '6) No more than 5% (at cost) of an investment manager's equity portfolio may be invested in the shares of a single corporate issuer. 6 FIXED INCOME SECURITIES:.. . 1) The foxed income portfolio_ shall comply with the following guidelines; a. The average, credit quality of the bond portfolio shall be or higher. b. The duration of the fixed income portfolio shall not exceed 135% of the duration of the market index. The market index is defined as the Barclays Capital Aggregate. Bond Index.' 2) Investments in all corporate fixed income securities shall be limited to: . a. Those securities, rated -below '`BBB". shall not exceed = ,of the entire fixed income portfolio. b. No more than 5% at.cost of an.investment manager's total foxed income portfolio shall be invested in the securities of any single corporate issuer. 3) Futures contracts may be used on a non -levered basis for duration adjustment and yield curve positioning purposes. 4) There is no limit imposed on investments in fixed income securities issued .directly by . the United. States 'Government or any agency or instrumentality. thereof. REAL ESTATE 1) Investments in real estate shall not exceed 25% (at market -valuation) of the value of the total Fund assets. 2) All real estate investments shall be _made through participation in diversified commingled funds of real properties. These funds shall be broadly diversified as to property type and geography. 3) Experienced and professional real property investment managers shall manage all real estate investments. - .7 ABSOLUTE RETURN: 1) Investments in absolute or real return strategies shall not exceed 20% of the value of the total Fund assets. 2) All absolute or real return investments shall be made through participation in diversified commingled, funds, mutual fund or limited partnership vehicles: 3) The board shall endeavor to consider those investments that offer liquidity, transparency and low relative fees. CASH EQUIVALENT SECURITIES: 1) The investment manager may invest only in the following short term investment vehicles: a. The money market or STIF provided by the Plan's custodian. b. Direct obligations of the United States Government with a maturity of one year.or less. c. Commercial Paper with a maturity of 270 days or less that is rated A-1 by Standard & Poor's or P-1 by Moody's. d. , Bankers Acceptances issued by the largest 50 banks in the United States (in terms of total assets). MUTUAL FUNDS / COMMINGLED FUNDS / LIMITED PARTNERSHIPS: The Board. of Trustees recognizes and accepts that commingled, mutual fund and limited partnership investments will be dictated by the investment policies and guidelines of those funds and that no additional constraints may be imposed on them. The decision to make a direct investment in any vehicle will only be made by the Board of Trustees after a thorough review of the policies of the governing documents of those funds and after it has been determined that those policies are appropriate and materially consistent with the investment objectives. PROHIBITED SECURITIES: Only those derivative securities expressly described herein are permissible. Venture capital, trading on margin and short selling are prohibited unless otherwise stated in an investment managers' addendum -to this investment policy. PERFORMANCE EVALUATION The Board of Trustees intends to review investment performance and compliance with stated investment policies on a quarterly basis. REVIEW OF POLICY It is the intention of the Board of Trustees to review this Statement of Investment Policy and its addenda periodically and to amend it to reflect any changes in philosophy or objectives. However, if at any time .the investment managers believe that the specific objectives defined herein cannot be met or that these guidelines unnecessarily constrict performance, the Trustees shall be so notified in writing. Adopted: BOARD OF TRUSTEES Date BOYNTON BEACH GENERAL EMPLOYEES' PENSION FUND C: Boynton Beach GE\Policy\BBGE IPS 2017 i ClearBridge Investments Boynton Beach General Employees' Pension Fund Large Cap Growth Strategy Margaret Vitrano Managing Director, Portfolio Manager David Chow Director, Institutional Sales Manager November 24, 2014 For institutional investors only. Not for distribution to the general public. Confidential and proprietary information. ClearBrldge Investments Table of Contents Firm Overview Large Cap Growth Characteristics Performance Appendix For institutional investors only. Not for distribution to the general public. Confidential and proprietary information. 11 21 25 32 6 ClearBridge Investments Firm Overview For institutional investors only, Not for distribution to the general public. Confidential and proprietary information. W A Distinguished History in Equity Market Investing Well-established global investment manager with a legacy dating back more than 50 years • $108.6 billion in AUM • Owned by Legg Mason, operating with investment independence • Offices in New York, Baltimore, San Francisco and Wilmington with 202 employees ClearBridge Timeline 1962-1997 1998-2005 2005 -present Boutique Asset Managers ClearBridge Investments As of Sept. 30, 2014. Benefits of Scale Singular Focus on Investment Management For institutional investors only. Not for distribution to the general public. Confidential and proprietary information. 4 A Long -Term Commitmentto Fundamental Investing ClearBridge Investments' time -tested investment process has guided the Firm throughout its history • An investment philosophy focused on quality businesses — Differentiated business models — High sustainable returns — Strong financial characteristics — Seasoned management teams • A long-term approach with portfolio turnover significantly lower than peers • An investment culture developed over five decades that is dedicated to training and advancement • Independent risk management supported by a team of seven risk and portfolio analytics professionals • Innovative compensation program aligning ClearBridge with client objectives ClearBridgeFor institutional investors only. Not for distribution to the general public. G Investments Confidential and proprietary information. J Focused Investment Management Resources 73 investment professionals focusing on proprietary research, fundamental investing and advanced trading Terrence Murphy Hersh Cohen Scott Glasser Chuck Harris Patrick Collier Chief Co -Chief Co -Chief Director Head of Executive Officer Investment Officer Investment Officer of Research Trading # of Professionals Average Experience Continuity of Service Portfolio Managers 34 24 years Average of 18 years with the Firm Research Analysts 30 13 years Average of 7 years with the Firm Trading 9 24 years Average of 18 years with the Firm ClearBridge For institutional investors only. Investments As of Sept. 30, 2014. C of distribution to the general public. Confidential and proprietary information. A Diversified Asset Base ClearBridge Assets Under Management Assets by Client Objective Assets by Client Type Total Assets Under Management: $108.6 Billion Integrated Environmental, Social and Governance (ESG) Investment Program Assets Total: $1.4 Billion Offshore $6.0 Billion ClearBridgeFor institutional investors only. As of Sept. 30, 2014. Not for distribution to the general public. Investments Total Environmental, Social & Governance (ESG) AUM are included in Total AUM of $108.66. Confidential and proprietary information. 7 Representative List of Clients Corporate • AMR Corp. • Bristol Bay Native Corporation • Cook Inlet Region, Inc. • Merck & Co., Inc. • Quality Alliance Assurance Company • Ullico Endowment, Foundation, and Non -Profit • AHRC, Nassau County Chapter • College Entrance Exam • Integris Health Inc. • Oakwood Healthcare Inc. • Salesian Missions • Sisters of the Blessed Sacrament • Southern Baptist Foundation • WEA Insurance Corporation Sovereign Wealth • The General Organisation for Social Insurance Public Fund • Arkansas Local Police and Fire Retirement System • Firefighters Pension Fund of East Peoria, Illinois • Government of the District of Columbia • Hospital Authority of Valdosta and Lowndes County, Georgia • The Police Pension Fund, City of Carbondale, Illinois • The Police Pension Fund, City of Urbana, Illinois • Oregon Common School Fund • Woodstock Police Pension Fund Sub -Advisory • AXA Equitable Life Insurance Company • Met Investors Advisory LLC • OceanRock Investments Inc. • Ohio National Financial Services • Pacific Life Fund Advisors LLC • Pax World Management Corp. • Principal Management Corporation • Prudential Investments LLC • SunAmerica Asset Management Corporation • UBS Multi Manager Access ClearBridge As of Sept. 30, 2014. For institutional investors only. Clients listed are representative of the types of institutions that are ClearBridge Investments, LLC clients. Not for distribution to the general public. p Investments It is not known whetherthe listed clients approve or disapprove of ClearBridge Investments orthe advisory services provided. Confidential and proprietary information. 8 Independent Risk Management Identify and Address Investment and Business Risk Dedicated team of seven risk management and portfolio analytics professionals distinguished by: • Independence — Direct reporting line to Chief Executive Officer • Flexibility — Preventive risk program focusing on business needs • Clarity — Promote risk aware culture with defined responsibilities Investment Risk Analyses Investment Policy Risk tolerance, instrument/transaction analysis (derivatives, short selling, etc.) Performance Ex -post portfolio analysis, attribution, variance, tracking error, beta Risk Adjusted Ex -ante portfolio analysis, risk modeling, market risk exposure Product/Style Investment objective suitability reviews, positioning, peer group comparison Other Economic factors impact, market changes, industry standards and best practices, product development Trading Review of trade blotter, short positions and associated market factors ClearBridgeFor institutional investors only. Not for distribution to the general public. Investments Confidential and proprietary information. Innovative Compensation Program ClearBridge's compensation programs align employees' goals with the interests of clients • Deferral program for key employees • Deferred compensation invested in new product composite, ClearBridge funds and Legg Mason stock • Portfolio Managers — invest at least half of their deferral in their own portfolios Portfolio Manager Compensation ► Focus on one-, three- and five-year performance versus benchmark and peer group (10%, 52.5%, and 37.5%, respectively) ► Based on market data driven by revenue, AUMs, experience and style box ► Asset weighted by investment product ClearBridge Investments Research Analyst Com en:g aiaur ► Portfolio manager survey: 50% ► Best ideas as measured in performance model: 30% ► New idea generation: 10% ► Corporate contribution — value added to overall firm: 10% For institutional investors only. Notfor distribution to the general public. O Confidential and proprietary information. ClearBridge Investments Large Cap Growth For institutional investors only, Not for distribution to the general public. Confidential and proprietary information. 11 Portfolio ManagementTeam Large Cap Growth Name and Position Industry ClearBridge Education, Experience and Professional Designations Experience Tenure Peter Bourbeau Managing Director, Portfolio Manager 23 years • Joined predecessor • MBA in Finance from Fordham University firm in 1991 • BSBA in Business from University of Florida Margaret Vitrano 18 years • Joined predecessor • Citigroup - Research Analyst for consumer discretionary sector Managing Director, firm in 1997 • Wertheim Schroeders - Research Analyst Portfolio Manager • BA in Public Policy Studies and Art History from Duke University • MBA in Finance from the University of Pennsylvania ClearBridgeFor institutional investors only. Not for distribution to the general public. Investments Confidential and proprietary information. 12 Investment Philosophy Large Cap Growth Investment Philosophy • Invest in leadership companies where we believe the market price underestimates the magnitude of future growth • Use stock selection as primary driver — identify category leaders with characteristics to sustain that position • Find secular tailwinds to support multi-year investment opportunities, allowing for compounding of earnings and cash flow • Perform rigorous analysis to understand company fundamentals, key competitive dynamics and industry structure — Believe the best business models win over time • Identify barriers to entry and prefer companies with innovation prowess, regardless of size • Look for businesses that protect and grow market share consistently • Gravitate to self -funding business models with significant recurring revenue — Seek businesses with the ability to generate superior free cash flow over time • Stress test the sustainability of profitability and growth — Take a disciplined approach to valuation Points of Differentiation • High conviction, concentrated, low turnover approach • Bottom-up driven investment decisions • Diversification across growth spectrum (cyclical, stable, select) ClearBridgeFor institutional investors only. Not for distribution to the general public. Investments There is no guarantee these objectives will be met. Confidential and proprietary information. 13 Risk/Reward Profile ClearBridge Large Cap Growth —Three Years Ending Sept. 30, 2014 (Gross of Fees) 31 29 a c 27 25 R 0 23 21 c Q 19 a, 17 a, a 15 13 E ClearBridge ` Large Cap Growth Composite Russell 1000 Growth Index 10 11 12 13 Standard Deviation (%) Average Annual Average Annual Total Standard Return Deviation ClearBridge Large Cap Growth Composite 26.46% 11.70% Russell 1000 Growth Index 22.45% 11.09% ClearBridge Performance source: Internal. of fees. Please see the complete GIPS Past performance is no guarantee of For institutional investors only. Benchmark source: Russell Investments. endnotes and the additional important future results. Performance is preliminary Notfor distribution to the general public. Investments Composite performance shown is gross information in the Appendix. and subjectto change. Confidential and proprietary information. 14 Investment Process Overview Large Cap Growth • Sector analysts and PMs each propose companies with attractive business models and good long-term growth prospects for further review • Idea generation is an ongoing and continual process • Analysts and PMs work together to understand the • durability of a company's growth and profit tall Analysis • Meet with target company management, competitors and industry experts • Determine appropriate entry price • Own companies with a range of growth and volatility �onstruction • Maintain high active share • Monitor sector weightings and correlations among current holdings • Assess risk regularly ClearBridgeFor institutional investors only. Not for distribution to the general public. G Investments Confidential and proprietary information. J Step 1 Idea Generation Fundamentally Driven Approach to Identify Attractive Securities • Investment universe: generally $5 billion and higher market capitalization • Ideas sourced from PM/analyst dialogue — Attracted to controversy where companies may be priced inefficiently • High level evaluation of key elements: 1. Business Model — growth dynamics & sustainability 2. Financial Structure — capital adequacy to fund growth initiatives 3. Management Analysis — strategy and execution • Identify key risks or questions to be addressed in fundamental analysis ClearBridgeFor institutional investors only. Not for distribution to the general public. �� Investments Confidential and proprietary information. Step 2 Fundamental Analysis: Research Process Drives Decision Making Business Model Evaluation 0 Competitors Cyclicality Recurring Revenues Cost Factors Reinvestment Needs giiiiiwswOrocluct Cycle ClearBridge Investments Financial Structure Self -funding financial model High Incremental Margins Maximizing Returns Through: Reinvestment Inorganic Activity Share Buyback Valuation Size of addressable market • Free Cash Flow Yield • P/E, EV/Sales, PEG Ratio Management Analysis Clarity of Company's Vision Consistency of Reported Results Capital Use Incentives/Stock Ownershil For institutional investors only. Not for distribution to the general public. Confidential and proprietary information. 17 ClearBridge Fundamental Research Team A Specialized Team Serving as a Crucial, Shared Resource Chuck Harris Director of Research Consumer Health Care Discretionary Marshall Gordon Neal Austria Nick Wu Consumer Staples Industrials/ Matthew Mandel, CFA Basic Materials Chuck Harris Energy/Utilities Kevin Martens Dimitry Dayen, CFA Tatiana Thibodeau Information Technology & Financials Communications John Baldi Tim Daubenspeck Miguel del Gallego, CFA Hilary Frisch, CFA Amanda Tedesco ClearBridgeFor institutional investors only. Not for distribution to the general public. Investments As of Sept. 30, 2014. Confidential and proprietary information. 18 Step 3 Portfolio Construction: Diversification Across the Spectrum of Growth U Low ClearBridge Investments Normalized ROIC iium for cable growth iperior ROIC M For institutional investors only. Not for distribution to the general public. Confidential and proprietary information. 19 Step 4 Risk Management/Evaluation Discipline Security Level • Undertake thorough fundamental analysis, understanding downside scenarios • Identify key risks and listen to the most bearish views from internal and external sources before and after investing • Use industry analysts to assess expectations for a company • Patient approach to entering a position, sensitive to valuation • Active review of investment rationale, especially on laggards and biggest winners over recent term — Avoid thesis creep Portfolio Level • Create portfolio with a range of growth rates and valuations (cyclical, stable, select) • Highest conviction ideas are weighted as such and position sizes are adjusted to manage portfolio risk • Maximum +/-5% security active weight • Sector collars (+/-50% weight around largest sectors of Russell 1000 Growth Index) ClearBridge Level • Quarterly review by independent risk committee • Adherence to ClearBridge portfolio risk controls and guideline systems & trading oversight ClearBridgeFor institutional investors only. Not for distribution to the general public. 2� Investments Confidential and proprietary information. ClearBridge Investments Characteristics For institutional investors only, Not for distribution to the general public. Confidential and proprietary information. 21 Portfolio Composition ClearBridge Large Cap Growth - Sept. 30, 2014 Market Capitalization ■ Representative Portfolio Russell 1000 Growth Index 80 70 67.6 60 55.9 0 0 50 0 a 40 30 k ., 20 13.6 14.4 15.8 16.5 10 0 12.8 3.0 0.0 0.4 >50 bil 25-50 bil 10-25 bil 3-10 bil 0-3 bil ($Billions) ClearBridge Source: FactSet. Please see additional important information regarding the Investments representative portfolio in the Appendix. Sector Weightings Sector Representative Portfolio (%) Russell 1000 Growth Index (%) Relative Weight (%) Information Technology 30.7 28.4 2.3 Health Care 19.4 13.6 5.7 Consumer Discretionary 17.3 18.2 -1.0 Industrials 9.8 11.9 -2.1 Consumer Staples 7.3 10.3 -3.0 Financials 6.6 5.1 1.5 Energy 5.8 5.7 0.1 Materials 2.0 4.2 -2.2 Telecommunication Services 0.0 2.4 -2.4 Utilities 0.0 0.1 -0.1 Cash 1.1 0.0 1.1 For institutional investors only. Not for distribution to the general public. 22 Confidential and proprietary information. Top 10 Holdings ClearBridge Large Cap Growth — Sept. 30, 2014 Security (%) of Total Fund Google, Inc. 3.98 Amazon.com, Inc. 3.46 Biogen Idec Inc. 3.45 Celgene Corporation 3.26 CVS Health Corporation 3.13 Visa Inc. Class A 2.98 Schlumberger NV 2.82 Home Depot, Inc. 2.73 Comcast Corporation Class A Special 2.71 eBay Inc. 2.60 Total 31.12 Total Number of Holdings 51 ClearBridge Source: FactSet. Please see additional For institutional investors only. important information regarding the Not for distribution to the general public. 23 Investments representative portfolio in the Appendix. Confidential and proprietary information. Portfolio Characteristics ClearBridge Large Cap Growth - Sept. 30, 2014 Characteristics Representative Portfolio Russell 1000 Growth Index P/E Ratio (trailing 12 mos.) 24.6 21.9 P/E Ratio (forward 12 mos.) 20.0 18.9 Price/Book 5.1 6.0 EPS Growth Next 3-5 Years (%) 15.7 15.3 Weighted Median Market Cap ($ bn) 78.5 56.0 Weighted Average Market Cap ($ bn) 110.5 113.5 ROE 17.9 21.6 Dividend Yield 1.2 1.4 Turnover (trailing 12 mos.) 20.4 -- 3 Year Risk Statistics Composite Russell 1000 Growth Index Standard Deviation (%) 11.70 11.09 Sharpe Ratio 2.08 1.89 Tracking Error (%) 2.90 -- R2 0.94 -- Alpha (%) 2.92 -- Beta 1.02 -- Characteristics are subjectto change at ClearBridgeanytime; source: FactSet. Risk statistics source: Internal. Benchmark source: Investments Russell Investments. P/E ratios are weighted harmonic average. Price/Book is weighted average. The Composite's risk statistics are based on gross of fees performance. Please see the complete GIPS endnotes and the additional important information in the Appendix. Past performance is no guarantee of future results. Performance is preliminary and subject to change. For institutional investors only. Not for distribution to the general public. 24 Confidential and proprietary information. ClearBridge Investments Performance For institutional investors only, Not for distribution to the general public. Confidential and proprietary information. 25 Average AnnualTotal Returns ClearBridge Large Cap Growth — Sept. 30, 2014 (Gross of Fees) 30% 25% 20% 15% 10% 5% 0% ■ ClearBridge Large Cap Growth Composite Russell 1000 Growth Index YTD 1 Year 3 Years 5 Years 7 Years 10 Years and the additional important information Performance source: Internal. in the Appendix. Past performance is no For institutional investors only. ClearBridge Benchmark source: Russell Investments. guarantee of future results. Not for distribution to the general public. �� Investments Please see the complete GIPS endnotes is preliminary and subject to change. Confidential and proprietary information. CalendarYear Returns ClearBridge Large Cap Growth (Gross of Fees) 50% 40% 30% 20% 10% 0% -10% -20% -30% -40% -50% ■ ClearBridge Large Cap Growth Composite Russell 1000 Growth Index 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Performance source: Internal. and the additional important information For institutional investors only. ClearBridge Benchmark source: Russell Investments. in the Appendix. Past performance is no Not for distribution to the general public. �� Investments Please seethe complete GIPS endnotes guarantee of future results. Confidential and proprietary information. Performance Attribution Analysis ClearBridge Large Cap Growth - OneYear Ending Sept. 30, 2014 Sector Attribution (%) Versus Russell 1000 Growth Index -1 YR Sept.- 14 Average Weight ClearBridge Large Cap Growth Composite This information should not be construed Return Attribution Effects Sector Attribution Port BM (+/-) Port BM Sector Stock Total Consumer Discretionary 16.21 19.16 -2.95 18.21 11.41 0.26 1.05 1.31 Consumer Staples 8.60 11.53 -2.93 24.14 15.10 0.18 0.82 1.00 Financials 6.39 5.52 0.87 27.86 14.75 -0.02 0.78 0.76 Health Care 17.66 12.63 5.03 28.85 31.39 0.60 -0.39 0.20 Energy 5.30 5.13 0.17 15.97 14.89 0.13 0.06 0.19 Telecommunication Services 0.00 2.08 -2.08 0.00 15.76 0.05 0.00 0.05 Utilities 0.00 0.11 -0.11 0.00 10.92 0.03 0.00 0.03 Materials 2.29 4.46 -2.17 9.43 19.17 0.01 -0.15 -0.14 Cash 1.60 0.00 1.60 0.04 0.00 -0.35 0.00 -0.35 Industrials 8.28 12.21 -3.93 9.67 15.38 0.06 -0.47 -0.42 Information Technology 33.67 27.17 6.50 22.87 25.09 0.30 -0.78 -0.48 Total 100.00 100.00 0.00 21.30 19.15 1.23 0.92 2.15 Source: FactSet. Attribution returns are ClearBridge Large Cap Growth Composite This information should not be construed gross of fees and will also differfrom and do not reflectfees or expenses of the as investment advice or ClearBridge reported returns due to cash flows and intra -period trading. The attribution portfolio. Individual client portfolios may recommendations with respectto the differ. These figures are for analytical sectors listed. Allocations are subjectto For institutional investors only. figures above are based on a purposes only and do not representthe change at any time. Past performance is Notfor distribution to the general public. Investments representative portfolio included in the portfolio's average annualtotal return. no guarantee of future results. Confidential and proprietary information. �� Performance Attribution Analysis ClearBridge Large Cap Growth-ThreeYears Ending Sept. 30, 2014 Sector Attribution (%) Versus Russell 1000 Growth Index - 3 YRS Sept.- 14 Sector Attribution Average Weight Port BM (+/-) Return Port BM Attribution Effects Sector Stock Total Information Technology 33.82 28.71 5.11 24.58 20.41 0.06 1.80 1.86 Health Care 15.50 11.97 3.52 36.69 32.58 0.42 0.79 1.21 Consumer Staples 10.52 12.27 -1.76 23.44 16.71 0.25 0.95 1.20 Consumer Discretionary 16.23 17.14 -0.92 28.85 24.16 0.13 0.96 1.09 Financials 6.59 5.19 1.40 31.81 22.47 0.13 0.63 0.77 Materials 2.34 4.49 -2.15 25.21 24.00 -0.02 0.24 0.21 Telecommunication Services 0.00 1.69 -1.69 0.00 14.22 0.21 0.00 0.21 Other 0.34 0.00 0.34 3.87 0.00 0.10 0.00 0.10 Utilities 0.00 0.09 -0.09 0.00 10.71 0.09 0.00 0.09 Energy 6.39 6.09 0.30 19.43 23.92 0.27 -0.27 0.01 Cash 0.88 0.00 0.88 0.05 0.00 -0.20 0.00 -0.20 Industrials 7.40 12.35 -4.95 20.01 24.72 -0.16 -0.21 -0.38 Total 100.00 100.00 0.00 26.46 22.43 1.27 4.73 5.89 Source: FactSet. Attribution returns are ClearBridge Large Cap Growth Composite This information should not be construed gross of fees and will also differfrom and do not reflectfees or expenses of the as investment advice or ClearBridge reported returns due to cash flows and intra -period trading. The attribution portfolio. Individual client portfolios may recommendations with respectto the differ. These figures are for analytical sectors listed. Allocations are subjectto For institutional investors only. figures above are based on a purposes only and do not representthe change at any time. Past performance is Notfor distribution to the general public. Investments representative portfolio included in the 2A portfolio's average annualtotal return. no guarantee of future results. Confidential and proprietary information. 7 Top/Bottom 10 Contributors ClearBridge Large Cap Growth - OneYear Ending Sept. 30, 2014 Top Ten Contributors (%) Versus Russell 1000 Growth Index NetApp, Inc. Information Technology Average Weight 0.12 Return Contrib Name Sector Port BM (+/-) 0.31 -12.68 CVS Health Corporation Consumer Staples 3.28 0.11 3.17 42.38 1.30 Google Inc. Class A Information Technology 3.04 2.34 0.70 34.22 1.26 Biogen Idec Inc. Health Care 3.33 0.73 2.60 37.40 1.13 Apple Inc. Information Technology 2.35 4.46 -2.11 51.27 1.08 Walt Disney Company Consumer Discretionary 2.54 0.56 1.98 39.76 0.94 Facebook, Inc. Class A Information Technology 1.82 1.13 0.69 57.36 0.88 Microsoft Corporation Information Technology 2.14 3.06 -0.92 43.27 0.84 Celgene Corporation Health Care 3.09 0.69 2.40 22.98 0.76 Comcast Corporation Class A Special Consumer Discretionary 2.88 0.00 2.88 25.52 0.75 Broadcom Corporation Class A Information Technology 1.09 0.06 1.03 47.35 0.68 Bottom Ten Contributors (%) Versus Russell 1000 Growth Index Average Weight Return Contrib Name Sector Port BM NetApp, Inc. Information Technology 1.31 0.12 1.19 -13.12 -0.33 Bed Bath & Beyond Inc. Consumer Discretionary 0.44 0.13 0.31 -12.68 -0.12 Towers Watson & Co. Class A Industrials 0.43 0.00 0.43 -5.74 -0.11 Xilinx, Inc. Information Technology 1.19 0.13 1.06 -7.40 -0.08 Eaton Corp. Plc Industrials 1.67 0.00 1.67 -5.49 -0.07 Citrix Systems, Inc. Information Technology 1.98 0.11 1.87 1.03 -0.06 eBay Inc. Information Technology 2.60 0.70 1.89 1.50 -0.03 FMC Technologies, Inc. Energy 0.01 0.13 -0.12 -1.56 -0.01 W.W. Grainger, Inc. Industrials 1.37 0.15 1.22 1.14 0.01 Precision Castparts Corp. Industrials 0.26 0.38 -0.12 0.30 0.02 Source: FactSet. The top and bottom may differ. These figures are for contributors above are based on the analytical purposes only and do not ClearBridgeholdings of a representative account in representthe portfolio's average annual the ClearBridge Large Cap Growth total return. This information should not Investments Composite. Individual client portfolios be construed as investment advice or recommendations with respectto the sectors and securities listed. Allocations are subjectto change at any time. Past performance is no guarantee of future results. For institutional investors only. Notfor distribution to the general public. 30 Confidential and proprietary information. Top/Bottom 10 Contributors ClearBridge Large Cap Growth-ThreeYears Ending Sept. 30, 2014 Top Ten Contributors (%) Versus Russell 1000 Growth Index Name Sector Average Weight Port BM (+/-) Return Contrib (Annualized) (Cumulative) Biogen Idec Inc. Health Care 3.14 0.58 2.56 52.57 5.83 Celgene Corporation Health Care 3.29 0.58 2.71 45.21 5.50 Home Depot, Inc. Consumer Discretionary 3.17 1.11 2.06 43.95 5.43 Visa Inc. Class A Information Technology 3.26 0.90 2.36 36.59 4.90 Google Inc. Class A Information Technology 3.39 2.44 0.95 31.67 4.26 Walt Disney Company Consumer Discretionary 2.63 0.38 2.25 45.59 4.25 CVS Health Corporation Consumer Staples 3.20 0.10 3.10 35.34 4.19 Comcast Corporation Class A Special Consumer Discretionary 2.81 0.00 2.81 35.66 3.88 eBay Inc. Information Technology 3.06 0.65 2.41 24.30 3.87 BlackRock, Inc. Financials 2.70 0.16 2.55 34.13 3.72 Bottom Ten Contributors (%) Versus Russell 1000 Growth Index Source: FactSet. The top and bottom may differ. These figures are for contributors above are based on the analytical purposes only and do not ClearBridge holdings of a representative account in representthe portfolio's average annual the ClearBridge Large Cap Growth total return. This information should not Investments Composite. Individual client portfolios be construed as investment advice or recommendations with respectto the sectors and securities listed. Allocations are subjectto change at any time. Past performance is no guarantee of future results. For institutional investors only. Not for distribution to the general public. 1 Confidential and proprietary information. Average Weight Return Contrib Name Sector Port BM (+/-) (Annualized) (Cumulative) Apache Corporation Energy 0.77 0.04 0.73 4.09 -0.38 Towers Watson & Co. Class A Industrials 0.14 0.00 0.14 -5.74 -0.11 Human Genome Sciences Inc. Health Care 0.00 0.01 -0.01 -3.70 -0.04 PowerShares QQQ Trust @NA 0.05 0.00 0.05 -3.67 -0.04 FMC Technologies, Inc. Energy 0.00 0.15 -0.15 -1.56 -0.01 Halliburton Company Energy 0.00 0.38 -0.38 -0.03 0.00 W.W. Grainger, Inc. Industrials 0.46 0.16 0.30 1.14 0.01 Precision Castparts Corp. Industrials 0.09 0.37 -0.28 0.30 0.02 Google Inc. Class C Information Technology 0.33 0.26 0.07 1.34 0.02 Twenty -First Century Fox, Inc. Class A Consumer Discretionary 0.06 0.30 -0.25 4.24 0.03 Source: FactSet. The top and bottom may differ. These figures are for contributors above are based on the analytical purposes only and do not ClearBridge holdings of a representative account in representthe portfolio's average annual the ClearBridge Large Cap Growth total return. This information should not Investments Composite. Individual client portfolios be construed as investment advice or recommendations with respectto the sectors and securities listed. Allocations are subjectto change at any time. Past performance is no guarantee of future results. For institutional investors only. Not for distribution to the general public. 1 Confidential and proprietary information. ClearBridge Investments Appendix For institutional investors only, Not for distribution to the general public. Confidential and proprietary information. 32 Portfolio Holdings ClearBridge Large Cap Growth - Sept. 30, 2014 Consumer Discretionary 17.27 Amazon.com, Inc. 3.46 Home Depot, Inc. 2.73 Comcast Corporation Class A Special 2.71 Walt Disney Company 2.53 Target Corporation 2.13 YUM! Brands, Inc. 1.65 NIKE, Inc. Class B 1.10 Twenty -First Century Fox, Inc. Class A 0.96 Consumer Staples 7.34 CVS Health Corporation 3.13 Anheuser-Busch In Bev SA Spon. ADR 2.33 Coca-Cola Company 1.88 Energy 5.79 Schlumberger NV 2.82 Cameron International Corporation 2.22 FMC Technologies, Inc. 0.75 Financials 6.65 BlackRock, Inc. 2.48 Charles Schwab Corporation 1.59 NASDAQ OMX Group, Inc. 1.35 CME Group Inc. Class A 1.23 Microsoft Corporation 2.34 Health Care 19.35 Biogen Idec Inc. 3.45 Celgene Corporation 3.26 Johnson & Johnson 2.51 United Health Group Incorporated 2.49 Thermo Fisher Scientific Inc. 1.91 Bristol-Myers Squibb Company 1.80 Zoetis, Inc. Class A 1.79 Amgen Inc. 1.25 Regeneron Pharmaceuticals, Inc. 0.89 Check Point Software Technologies Ltd. 0.30 Industrials 9.77 W.W. Grainger, Inc. 1.81 United Parcel Service, Inc. Class B 1.78 Precision Castparts Corp. 1.74 Towers Watson & Co. Class A 1.59 Eaton Corp. Plc 1.45 General Electric Company 1.41 Information Technology 30.71 Google Inc. Classes A & C 3.98 Visa Inc. Class A 2.98 eBay Inc. 2.60 Akamai Technologies, Inc. 2.46 Microsoft Corporation 2.34 Apple Inc. 2.23 Citrix Systems, Inc. 2.21 Facebook, Inc. Class A 2.03 Red Hat, Inc. 1.84 EMC Corporation 1.74 Texas Instruments Incorporated 1.46 QUALCOMM Incorporated 1.35 Xilinx, Inc. 1.30 Juniper Networks, Inc. 0.98 LinkedIn Corporation Class A 0.91 Check Point Software Technologies Ltd. 0.30 Materials 1.98 Monsanto Company 1.98 Cash 1.13 ClearBridgeFor institutional investors only. Not for distribution to the general public. �� Investments Confidential and proprietary information. Fee Schedule ClearBridge Large Cap Growth Assets Annual Investment Management Fees (%) First $25 million 0.65 Next $25 million 0.55 Above $50 million 0.40 ClearBridge$5 million minimum account size. For institutional investors only. Investment managementfees do not Not for distribution to the general public. Investments include custody. Confidential and proprietary information. 4 Biography Name and Position Industry ClearBridge Education, Experience and Professional Designations Experience Tenure David Chow 20 years • Joined ClearBridge, • Legg Mason Capital Management - Director of Consultant Relations Director, LLC (f/k/a Legg • Wachovia Securities - Vice President of Institutional Equity Sales Institutional Sales Manager Mason Capital • Deutsche Bank Securities - Vice President of Institutional Equity Management, LLC) in • Deutsche Banc - Alex. Brown - Investment Representative in Private 2006 Client Division • Vincent Lombardi Cancer Center, Georgetown University - Senior Research Assistant • MS in Physiology from Georgetown University • BA in Biology from Rutgers University ClearBridgeFor institutional investors only. Not for distribution to the general public. �GJ Investments Confidential and proprietary information. Additional Important Information ClearBridge Large Cap Growth Risks Although holdings are primarily focused on large -cap companies, limited investments may also be made in mid -cap stocks, which typically involve a higher degree of risk than large -cap stocks. Characteristics The holdings and characteristics shown are based on a representative portfolio included in the Composite. Individual client accounts may differ from holdings and characteristics shown. For illustrative purposes only. Portfolio holdings and characteristics are subject to change at any time. Portfolio holdings may not be representative of the portfolio manager's current or future investments and are subject to change at any time. The information provided is for informational purposes only and should not be construed as a recommendation to purchase or sell a particular security or be used as the sole basis for an investor to make an investment decision. The sector weightings and capitalization ranges shown are based on a representative portfolio included in the Composite and are subject to change at any time. Individual client accounts may differ from the sector weightings and capitalization ranges. The information provided is for informational purposes only and should not be construed as a recommendation to over or underweight any particular sector. Performance Composite performance is shown gross of fees. The performance shown does not reflect the deduction of investment advisory fees which are described in Part 2A of ClearBridge Investments, LLC's Form ADV. The returns will also be reduced by expenses a client may incur. As fees are deducted quarterly, the compounding effect will be to increase the impact of fees by an amount directly related to the gross account performance. For example, on an account with an annual 0.70% fee, if the gross performance is 10%, the compounding effect of the fees will result in net performance of approximately 9.23%, annually. Opinions and Views The opinions and views expressed herein are of the ClearBridge Investments, LLC Large Cap Growth portfolio management team as of the date shown, and may differ from other managers, or the firm as a whole, and are not intended to be a forecast of future events, a guarantee of future results or investment advice. The statistics have been obtained from sources believed to be reliable, but the accuracy and completeness of this information cannot be guaranteed. Information Providers Index source: Russell Investments, Russell Investment Group is the source and owner of the trademarks, service marks and copyrights related to the Russell Indexes. Russell ® is a trademark of Russell Investment Group. Neither ClearBridge Investments, LLC nor its information providers are responsible for any damages or losses arising from any use of this information. ClearBridgeFor institutional investors only. Not for distribution to the general public. �� Investments Confidential and proprietary information. Endnotes ClearBridge Large Cap Growth n/m - Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year. Compliance Statement: ClearBridge Investments, LLC claims compliance with the Global Investment Performance Standards (GIPS(k) and has prepared and presented this report in compliance with the GIPS standards. ClearBridge Investments, LLC has been independently verified for the periods January 1, 1997 - December 31, 2013. Verification assesses whether (1) the 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 the GIPS standards. The ClearBridge Large Cap Growth composite has been examined for the periods January 1, 2005 - December 31, 2013. The verification and performance examination reports are available upon request. Firm Information: ClearBridge Investments, LLC ("ClearBridge") is a wholly owned subsidiary of Legg Mason, Inc. ("Legg Mason"). The investment advisory business now known as ClearBridge was registered in September 2005 to facilitate Legg Mason's acquisition of substantially all the equity asset management businesses known as Citigroup Asset Management. These former businesses serve as the foundation of ClearBridge and its claim of GIPS compliance for institutional accounts through predecessor firms, effective as of January 1997. In June 2008, ClearBridge combined this business with its retail business to form a single GIPS firm. On April 1, 2013, ClearBridge's affiliate, Global Currents Investment Management, LLC, was merged into ClearBridge. ClearBridge Investments Composite Information: The ClearBridge Large Cap Growth composite consists of institutional discretionary accounts with an account minimum of US $1 million. All accounts within the composite are invested in issuers that demonstrate high earnings growth rates. All accounts within the composite are primarily invested in large -capitalization U.S. equities, with an objective of outperforming the Russell 1000 Growth Index. The main risks of this strategy are issuer risk, concentration risk, market capitalization risk and equity risk. Prior to June 2008, the account minimum was $10 million. Input and Calculation Data: Returns reflect the deduction of all trading expenses and the reinvestment of dividends and other earnings. Gross of fee returns do not reflect the deduction of investment advisory fees or any other expenses that may be incurred in the management of the account. Net of fee returns are calculated using model investment advisory fees and are derived by deducting 1/12th of the maximum fixed fee rate in effect for the respective time period from the gross monthly composite return. The management fee schedule currently in effect is as follows: [0.65% on the first $25 million, 0.55% on the next $25 million and 0.40% above $50 million]. ClearBridge's investment advisory fees are described in Part 2A of Form ADV. The internal dispersion of annual returns is measured by the asset - weighted standard deviation of portfolio returns included in the composite for the entire year. A list of composite descriptions is available upon request. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Past performance is not necessarily indicative of future results. Benchmark Information: The Russell 10009 Growth Index measures the performance of those Russell 1000 companies with higher price -to -book ratios and higher forecasted growth values. Benchmark returns are not covered by the report of independent verifiers. For institutional investors only. Not for distribution to the general public. �� Confidential and proprietary information. Reporting Currency: USD Inception Date: August 1997 Composite Creation Date: January 2007 Total Composite Total Firm Total Total Russell 1000 Growth Assets at End of Percentage Assets at End of Return Return Benchmark Number of Composite Composite Benchmark Period of Firm Period Period (Gross) (Net) Return Portfolios Dispersion 3 Yr. St. Dev. 3 Yr. St. Dev. (USD million) Assets (USD million) 2013 39.01% 38.14% 33.48% <5 n/m 12.81% 12.35% 1,276.2 1.5% 85,024.7 2012 21.63% 20.85% 15.26% <5 n/m 16.23% 15.88% 968.3 1.8% 54,624.3 2011 -0.14% -0.79% 2.64% 5 0.21% 18.08% 18.01% 968.1 1.9% 50,870.8 2010 10.40% 9.69% 16.71% 5 0.12% n/a n/a 1,304.2 2.4% 55,366.5 2009 42.96% 42.07% 37.21% 7 0.20% n/a n/a 2,178.3 4.1% 53,522.7 2008 -36.42% -36.85% _38.44% 8 0.17% n/a n/a 2,123.0 4.2% 50,614.9 2007 5.75% 4.96% 11.81% 10 n/m n/a n/a 4,994.4 9.2% 54,209.3 2006 5.42% 4.26% 9.07% <5 n/m n/a n/a 5,904.1 9.6% 61,540.3 2005 6.33% 5.12% 5.26% <5 n/m n/a n/a 6,066.7 2.4% 254,571.9 2004 1.38% 0.23% 6.30% <5 n/m n/a n/a 5,168.8 2.1% 250,540.4 n/m - Information is not statistically meaningful due to an insufficient number of portfolios in the composite for the entire year. Compliance Statement: ClearBridge Investments, LLC claims compliance with the Global Investment Performance Standards (GIPS(k) and has prepared and presented this report in compliance with the GIPS standards. ClearBridge Investments, LLC has been independently verified for the periods January 1, 1997 - December 31, 2013. Verification assesses whether (1) the 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 the GIPS standards. The ClearBridge Large Cap Growth composite has been examined for the periods January 1, 2005 - December 31, 2013. The verification and performance examination reports are available upon request. Firm Information: ClearBridge Investments, LLC ("ClearBridge") is a wholly owned subsidiary of Legg Mason, Inc. ("Legg Mason"). The investment advisory business now known as ClearBridge was registered in September 2005 to facilitate Legg Mason's acquisition of substantially all the equity asset management businesses known as Citigroup Asset Management. These former businesses serve as the foundation of ClearBridge and its claim of GIPS compliance for institutional accounts through predecessor firms, effective as of January 1997. In June 2008, ClearBridge combined this business with its retail business to form a single GIPS firm. On April 1, 2013, ClearBridge's affiliate, Global Currents Investment Management, LLC, was merged into ClearBridge. ClearBridge Investments Composite Information: The ClearBridge Large Cap Growth composite consists of institutional discretionary accounts with an account minimum of US $1 million. All accounts within the composite are invested in issuers that demonstrate high earnings growth rates. All accounts within the composite are primarily invested in large -capitalization U.S. equities, with an objective of outperforming the Russell 1000 Growth Index. The main risks of this strategy are issuer risk, concentration risk, market capitalization risk and equity risk. Prior to June 2008, the account minimum was $10 million. Input and Calculation Data: Returns reflect the deduction of all trading expenses and the reinvestment of dividends and other earnings. Gross of fee returns do not reflect the deduction of investment advisory fees or any other expenses that may be incurred in the management of the account. Net of fee returns are calculated using model investment advisory fees and are derived by deducting 1/12th of the maximum fixed fee rate in effect for the respective time period from the gross monthly composite return. The management fee schedule currently in effect is as follows: [0.65% on the first $25 million, 0.55% on the next $25 million and 0.40% above $50 million]. ClearBridge's investment advisory fees are described in Part 2A of Form ADV. The internal dispersion of annual returns is measured by the asset - weighted standard deviation of portfolio returns included in the composite for the entire year. A list of composite descriptions is available upon request. Policies for valuing portfolios, calculating performance, and preparing compliant presentations are available upon request. Past performance is not necessarily indicative of future results. Benchmark Information: The Russell 10009 Growth Index measures the performance of those Russell 1000 companies with higher price -to -book ratios and higher forecasted growth values. Benchmark returns are not covered by the report of independent verifiers. For institutional investors only. Not for distribution to the general public. �� Confidential and proprietary information. > A BNY MELLON COMPANYsm ASSET MANAGEMENT, LLC P R E S E N T S US Large Cap Growth Equity November 24, 2014 One -on -One Use Only US Large Cap Growth Equity Presenters Boynton Beach General Employees' Pension Fund 11/24/14 Elizabeth Slover Senior Managing Director (617) 722-7594 Elizabeth is the Director of The Boston Company's Global Research Team, overseeing research for the U.S., EAFE and Emerging Markets. Elizabeth is also a Portfolio Manager on the US Large Cap Growth Equity strategy. Before joining the firm, she managed the Equity Research Group at Chancellor LGT Asset Management (now Invesco), and she also worked for the Chief Investment Strategist in the Equity Research Department of Smith Barney. She holds a B.A. in Political Science from Union College. Carl T. O'Connell Director (617) 722-7265 Carl is a Senior Relationship Manager, servicing corporate, public, endowment and foundation clients. Previously, he managed client relationships throughout the South, Southwestern and Mid -Atlantic U.S., and he has also been an Associate Portfolio Manager and a Business Analyst in the Operations Department, playing a significant role in transitioning new clients to the firm. He holds a B.S. with a concentration in Finance from the University of Massachusetts at Lowell. 2 CFA'R` and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. ASSET MANAGEMENT, LLC )0- A BNV MELLON COMPANY- US Large Cap Growth Equity Table of Contents 3 Boynton Beach General Employees' Pension Fund 11/24/14 Overview of The Boston Company Asset Management, LLC 4 Investment Process 11 Portfolio Construction 1� Portfolio Holdings ZO ASSET MANAGEMENT, Lk )0- A BNY MELLON COMPANY Firm Overview Boynton Beach General Employees' Pension Fund 11/24/14 The Boston Company Asset Management, LLC As of September 30, 2014 Boston Safe Deposit Company incorporated 1867, The Boston Company Asset Management established 1970 Independent teams focused on a fundamental research approach to global equity management Total Assets Under Management: $48.8 Billion Total Clients: 200 US Equity Non US Equity All Cap Global Large Cap Developed Markets Mid Cap Emerging Markets Small/Mid Cap Region/Country Specific Small Cap Small Cap Sector Specific Total Staff: 157 Total Investment Professionals: 79 Alternative Equity Long/Short Short Extension 4 Where applicable, includes assets managed by investment personnel of The Boston Company Asset Management, LLC acting in their capacity as officers of affiliated entities. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. ASSET MANAGEMENT, LL( > A BNV MELLON COMPANY' The Boston Company Asset Management, LLC Existing Florida Clients As of September 30, 2014 Our Commitment Our working relationships with Florida public pensions d, late 1980s. Currently, our longest -tenured relationships it back to 1996. We manage more than $275 million in Flor assets in domestic and international investment strategie Our Service We place great emphasis on building strong relationship and future clients through face-to-face interaction. As a r thoughtful, service-oriented sales, relationship, and cons professionals maintain a significant presence in Florida. ' four professionals focused on Florida who have more th, collective experience in the investment industry. Our Clients ■ City of Clearwater Firefighters' ■ City of Delray Beach General Employees' ■ City of North Miami Clair T Singerman Employees' Re ■ Miramar Police Pension 14 total clients in Florida Boynton Beach General Employees' Pension Fund 11/24/14 i 0 " The Boston Company Asset Management is a founding member of the Florida Public Pension Trustees Association, Inc. 5 It is not known whether the clients referenced approve or disapprove of the adviser or the advisory services provided. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. ASSET MANAGEMENT, LLC 1 A BNY MELLON COMPANY" US Large Cap Growth Equity Composite Returns As of September 30, 2014 25.0 Percent 20.0 15.0 10.0 5.0 0.0 ■ US Large Cap Growth (Gross of fees) * Russell 1000 Growth Boynton Beach General Employees' Pension Fund 11/24/14 Quarter Year -to -Date One Year Three Years Five Years Since Inception (7/1/05) 0.93 5.52 17.41 23.49 17.55 10.32 1.49 7.89 19.15 22.45 16.50 8.87 6 Returns for periods greater than one year are annualized. Past performance is not a guarantee for future performance. The information shown above is supplemental to the GIPS compliant presentation that can be found at the end of this book along with other important disclosures. ASSET MANAGEMENT, LLC 1 A 8NY MELLON COMPANY- US Large Cap Growth Equity Annual Composite Returns Percent 50.0 40.0 30.0 20.0 10.0 0.0 -10.0 -20.0 -30.0 -40.0 -50.0 Boynton Beach General Employees' Pension Fund 11/24/14 2013 ■ US Large Cap Growth 37.15 (Gross of fees) ■ Russell 1000 Growth 33.48 2012 2011 2010 2009 2008 2007 2006 7/1/05- 12/31/05 19.16 -2.19 24.13 38.51 -37.63 15.33 9.08 8.99 15.26 2.64 16.71 37.21 -38.44 11.81 9.07 7.10 7 Past performance is not a guarantee for future performance. The information shown above is supplemental to the GIPS compliant presentation that can be found at the end of this book along with other important disclosures. ASSET MANAGEMENT, LLC )0- A BNV MELLON COMPANY- US Large Cap Growth Equity Investment Team Elizabeth Slover BA, Union College George C. Saffaye BBA, Baruch College, CUNY Raymond S. Bowers, III, CFA BA, Dartmouth College David M. Sealy BA, Brown University; MBA, Columbia Business School Leigh N. Todd, CFA BS, Lehigh University Connie F. DeBoever, CFA, CPA BS, Wharton School of the University of Pennsylvania Michael W. Holton BS, Washington and Lee University; MBA, Stanford University 'Research Analysts: Health Care Daphne Karydas -,, , — Title )rience Firm* ►• 13 Director 24 14 Senior Portfolio Strategist 17 7 Senior Research Analyst 22 17 Senior Research Analyst 18 13 Senior Research Analyst 17 12 Senior Research Analyst 19 7 Senior Research Analyst Boynton Beach General Employees' Pension Fund 11/24/14 Portfolio Management & Risk Oversight Portfolio Strategy Consumer Discretionary: Media, Entertainment, Leisure, Automotive Consumer Staples: Beverages, Household Products, Food Products, Tobacco Consumer Discretionary: Retail, Restaurants Financials: Consumer Finance, Insurance Financials: Banks, Capital Markets, Homebuilding Health Care: BS & MS, Massachusetts Institute of Technology; 19 9 Senior Research Analyst Biotechnology, Life Sciences Tools & MBA, Harvard Business School Services Rick R. Rosania, CFA Health Care: BA, Dartmouth College; 19 15 Senior Research Analyst Health Care Providers & Services MSF, Boston College 8 *Includes tenure at The Bank of New York Mellon Corporation affiliates. CFA® and Chartered Financial AnalystCw are registered trademarks owned by CFA Institute. Experience listed may include partial year periods. ASSET MANAGEMENT, LLC 1 A BNY MELLON COMPANY" US Large Cap Growth Equity Investment Team continued Boynton Beach General Employees' Pension Fund 11/24/14 Charles Silberstein, MD, CFA Health Care: BS, Yeshiva University; 16 9 Senior Research Analyst Pharmaceuticals, Health Care Equipment & MD, A. Einstein College of Medicine; Supplies MBA, Columbia Business School Jason L. Gibson BS, United States Naval Academy; 7 7 Senior Research Analyst MBA, Harvard University Robin Wehbe, CFA, CMT BS, Lehigh University, 13 8 Senior Research Analyst MBA & MSF, Boston College Brock A. Campbell, CFA 9 9 Research Analyst BA, Wheaton College Matthew D. Griffin, CFA 23 8 Senior Research Analyst BA, Duke University Barry K. Mills, CFA BA, Hobart College 28 15 Senior Research Analyst Erik A. Swords BS, Lehigh University 14 9 Senior Research Analyst Materials: Chemicals, Metals & Mining Energy: Oil, Gas & Consumable Fuels, Energy Equipment & Services Utilities Information Technology, Telecomm. Services: Communications Equipment, Telecommunication Services Information Technology: Semiconductors & Semi Equipment, Hardware Information Technology: Software, IT Services Timothy J. McCormick, CFA BS, Niagara University; 31 16 Senior Research Analyst Industrials MBA, SUNY Binghamton 9 *Includes tenure at The Bank of New York Mellon Corporation affiliates. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute. Experience listed may include partial year periods. ASSET %I\% AGEMENT, LLC A H:, ,. UON COMPANY' US Large Cap Growth Equity Investment Philosophy Boynton Beach General Employees' Pension Fund 11/24/14 We believe that successful growth investing is best achieved through a process that optimizes information, ensures decision-making freedom, and requires accountability within a framework of oversight and risk management. No single definition of growth across portfolio Capital distributed by analyst opportunity set within benchmark Analysts are responsible for stock selection and weighting decisions within their area of coverage Analysts understand what they are specifically responsible for Manage risk from an overall portfolio level 10 No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. ASSET MANAGEMENT, LLC )0- A BNY MELLON COMPANY- US Large Cap Growth Equity Investment Process Boynton Beach General Employees' Pension Fund 11/24/14 ■ uisurlDuieu across Lne 1`t industry specialists organized into sector groups ■ Determined by benchmark weight ■ Each industry specialist applies their specific investment process to their slice of the capital - Sector/industry evaluation - Company analysis - Capital implementation 11 No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. ■ Portfolio Manager implementation and oversight ■ Risk managed through quantitative and qualitative measures ■ Ensure adherence to purchase and sell discipline ASSET MANAGEMENT, LLC 1 A BNV MELLON COMPANY- US Large Cap Growth Equity Investment Process: Capital Distribution Boynton Beach General Employees' Pension Fund 11/24/14 Capital Distribution Capital Distributed To Analyst Based on Benchmark Representation Selection Process Each Analyst is fully accountable for their allocation Freedom to invest where we believe greatest opportunities exist Portfolio reflects efficient utilization of information Barry Mills Matt Griffin Robin Weh Jaso Frilc Swnrds Trey Bowers Tim McCormick Chuck Silberstein I Sealy Leigh Todd Connie DeBoever ike Holton line Karydas da Comprehensive Sector Coverage Natural ConsumerFinancials Industrials • Oogy Resources 12 No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. ASSET MANAGEMENT, LLC )� A BNY MEUON COMPANY" US Large Cap Growth Equity Investment Process: Stock Selection Growth drivers can differ across sectors Boynton Beach General Employees' Pension Fund 11/24/14 CONSUMER HEALTH CARE • • ,CES •TECHNOLOGY RES I • Capital allocation . Interest rates and ■ Pipeline Cycles — typically ■ Supply/demand cycle ■ End market health • Brand strength yield curve . Product market drive 80% of returns , Management quality • New product cycles •Cyclical &secular • Regulatory environment opportunities ■ Secular trends that can cycle •Asset valuation •Capital allocation trends •Health Care push duration ■ Commodity . Management quality . Debt spreads utilization •Structural factors - Identify dramatic sensitivity ■ Valuation • Demographics • Capital market . Reimbursement changes intra- ■ Asset resource activity levels dynamics company that can quality •Gaining market • Economic factors . GDP growth . Government funded drive growth share ■ Loan levels stimulus/ expansion p ■ Capital deployment •Capital re- investment • Margin improvement ■ Competitive • Supply/demand cycle technology 13 No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. ASSET MANAGEMENT, LLC )0- A BNY MELLON COMPANY- US Large Cap Growth Equity Technology Alpha: Investment Process ■ Growth themes ■ Cyclical themes ■ Product cycles ■ Winners/losers ■ Management meetings ■ Channel checks ■ Supply chain coverage ■ Financial modeling ■ Potential earnings power ■ Valuation ■ Upside/downside target ■ Confidence interval 14 No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Boynton Beach General Employees' Pension Fund 11/24/14 On-going Assessment ■ Thematic changes ■ Thesis violated ■ Better ideas ■ Guideline adherence ■ Min/max active weight ■ Stock -specific risk Risk Assessment ■ Factor analysis ■ Top down alignment ■ Industry positioning ASSET MANAGEMENT, LLC A BNV MELLON COMPANY- US Large Cap Growth Equity Investment Process Boynton Beach General Employees' Pension Fund 11/24/14 Portfolio manager ensures portfolio disciplines ■ Growth orientation ■ Review trade rationale ■ Price target analysis ■ Valuation case ■ Level of conviction in investment thesis ■ Stock has achieved its price target ■ Stock has been downgraded to Hold or Sell - Slowing or decelerating growth - Alteration to original investment case - Estimates excessive - Erosion of fundamentals ■ Stock has lagged industry peers by 20% or more over a period of 90 days ■ Analyst has identified a more attractive investment opportunity 15 No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. ASSET MANAGEMENT, LLC A BNY MELLON COMPANY- US Large Cap Growth Equity Portfolio Construction Boynton Beach General Employees' Pension Fund 11/24/14 Generally within ± 3 percentage points relative to the benchmark weight Generally within ± I% versus weight of analyst coverage in benchmark All stocks recommended for inclusion must be rated "Buy" Approximately 60-100 holdings Generally, minimum $2 billion market cap at time of purchase; portfolio capitalization monitored for large -cap orientation Minimum position size normally 50 basis points at time of purchase Normally, no underweight positions in the portfolio Position must normally be an active overweight versus benchmark Maximum position size is the greater of 5% or 300 basis points above the index weight Generally 4-6% 16 `As per Northfield: Northfield Tracking Error measures the expected dispersion of the portfolio's return versus the benchmark. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. ASSET MANAGEMENT, LLC 1 A BNY MELLON COMPANY` US Large Cap Growth Equity Portfolio Construction As of September 30, 2014 Five Largest Holdings (%) Apple Inc. Information Technology 6.31 5.94 Google Inc. (Class A, C) Information Technology 4.29 3.22 Microsoft Corporation Information Technology 3.40 2.42 PepsiCo, Inc. Consumer Staples 2.86 1.38 Gilead Sciences, Inc. Health Care 2.74 1.60 Five Largest Active Positions (%) Verizon Communications Inc. Telecommunication Services 0.00 2.02 IBM Corporation Information Technology 0.00 1.75 Coca-Cola Company Consumer Staples 0.00 1.66 PepsiCo, Inc. Consumer Staples 2.86 1.38 Praxair, Inc. Materials 1.78 0.37 Characteristics Price/Earnings Ratio 18.9x 18.2x Price/Sales Ratio 2.2x 2.1 x LT Debt/Capital 29.1% 39.2% IBES Long Term Growth Rate 15.9% 14.9% Wtd. Avg. Market Cap $122.36 $118.78 Boynton Beach General Employees' Pension Fund 11/24/14 Economic Sector Weights (%) Information Technology Consumer Discretionary Health Care Consumer Staples Industrials Energy Financials Materials Telecommunication Services Utilities 0 5 10 15 20 25 30 35 ■ US Large Cap Growth ■ Russell 1000 Growth Representative Institutional Account - where applicable, excludes cash, ETFs and futures. There may be material differences between the representative 17 account and other accounts managed with the same strategy. Because of these differences, the information based on the representative account should not necessarily be relied upon. It should not be assumed that securities identified were or will be profitable or that decisions we make in the future will be profitable. Certain securities may not remain in the portfolio at the time that you receive this report. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. The information shown above is supplemental to the GIPS presentation that can be found ASSET MANAGEMENT, LLC at the end of this book along with other important disclosures. > A BNv MELLON COMPANY - US Large Cap Growth Equity US Large Cap Growth Equity vs. S&P 500 Index As of September 2014 US Large Cap Growth Equity S&P 500 Index* 200% Boynton Beach General Employees' Pension Fund 11/24/14 TBC US Large Cap Growth Equity vs. S&P 500 Index* Cumulative Return (7/1/05 - 9/30/14) 148% ;= 150'/0 7 Q) 101% m 100% crs 50% U 0% 111,000 —50% O O O O O O O O O O O O O O r r r r r O O O 75 O O c6 O O CO O ca 75j O � 5 O ctl j O O Z —TBC US Large Cap Growth Equity S&P 500 *The S&P 500 Index is being shown for comparison purposes only and is not the benchmark for this strategy. The S&P 500 Index measures the Ig performance of the large -cap segment of the U.S. equity market. US Large Cap Growth Equity composite returns are gross -of -fees. Returns for periods 'I'm BOSTON greater than one year are annualized unless otherwise noted. Past performance is not a guarantee for future performance. The information shown above is supplemental to the GIPS compliant presentation that can be found at the end of this book along with other important disclosures. AssET MANAGEMENT, LIA I A BNY MELLON COMPANY' US Large Cap Growth Equity Multi -Statistic Report Multi -Statistic Chart 07/2009 to 06/2014 0� - ♦ 25 - Benchmark: Russell 1000 Growth - Total Return - Universe: eVestment (eA Universes):eA US Large Cap Growth Equity # Managers 325 325 325 325 325 325 325 325 Anlzd Anlzd Anlzd Sharpe Description Beta R -Square Info Tracking Return StdDev Alpha Ratio Ratio Error Percentile 5 21.84 17.47 1.18 2.77 1.55 98.04 0.67 50 Percentile 25 19.99 15.65 1.11 0.20 1.36 96.14 0.19 4.79 Percentile 50 18.60 14.77 1.05 -1.17 1.26 94.28 U 3.91 Percentile 75 17.39 13.81 0.98 -2.50 1.16 90.98 -0.50 2.92 m -1.14 2.06 The Boston Company: US Large Cap Growth Equity 20.99 14.92 1.07 0.33 1.40 95.82 0.55 CL Russell 1000 Growth - Total Return 19.24 13.64 1.00 0.00 1.40 100.00 NA 0.00 Composite Returns. Source: Factset SPAR, eVestment Alliance. eVestment statistics are subject to change based on the number of universe constituents reporting. 75 19 Data shown above is gross -of -fees performance. Some information contained herein has been obtained from third party sources that are believed to be reliable, but the information has not been independently verified by TBCAM. TBCAM makes no representations as to the accuracy or the completeness of such information. No 100 performance. The information shown above is supplemental to the GIPS compliant presentation that can be found at the end of this book along with other important Boynton Beach General Employees' Pension Fund 11/24/14 Universe: eVestment (eA Universes):eA US Large Cap Growth Equity ♦ ♦ ♦ ! ♦ Anlzd Anlzd Beta Antzd Sharpe R -Square Info Tracking Return StdDev Alpha Ratio Ratio Error ♦ The Boston Company: US Large Cap Growth Equity ♦ Russell 1000 Growth - Total Return 0 Universe (Boxes represent 5th - 951h percentile) Period: 07/2009 to 06/2014 Benchmark: Russell 1000 Growth - Total Return Universe: eVestment (eA Universes):eA US Large Cap Growth Equity # Managers 325 325 325 325 325 325 325 325 Anlzd Anlzd Anlzd Sharpe Description Beta R -Square Info Tracking Return StdDev Alpha Ratio Ratio Error Percentile 5 21.84 17.47 1.18 2.77 1.55 98.04 0.67 6.80 Percentile 25 19.99 15.65 1.11 0.20 1.36 96.14 0.19 4.79 Percentile 50 18.60 14.77 1.05 -1.17 1.26 94.28 -0.19 3.91 Percentile 75 17.39 13.81 0.98 -2.50 1.16 90.98 -0.50 2.92 Percentile 95 15.33 11.99 0.84 -4.30 1.03 83.40 -1.14 2.06 The Boston Company: US Large Cap Growth Equity 20.99 14.92 1.07 0.33 1.40 95.82 0.55 3.20 Russell 1000 Growth - Total Return 19.24 13.64 1.00 0.00 1.40 100.00 NA 0.00 Composite Returns. Source: Factset SPAR, eVestment Alliance. eVestment statistics are subject to change based on the number of universe constituents reporting. 19 Data shown above is gross -of -fees performance. Some information contained herein has been obtained from third party sources that are believed to be reliable, but the information has not been independently verified by TBCAM. TBCAM makes no representations as to the accuracy or the completeness of such information. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. Past performance is not a guarantee for future performance. The information shown above is supplemental to the GIPS compliant presentation that can be found at the end of this book along with other important AssET MANAGEMENT, LLC disclosures. >A BNY MELLON COMPANY- 8974 US Large Cap Growth Equity Portfolio Holdings As of September 30, 2014 Consumer Discretionary Comcast Corporation Class A Home Depot, Inc. Priceline Group Inc NIKE, Inc. Class B PVH Corp. Viacom Inc. Class B Netflix, Inc. Ulta Salon, Cosmetics & Fragrance, Inc. Interpublic Group of Companies, Inc. Las Vegas Sands Corp. Dollar General Corporation Delphi Automotive PLC Michael Kors Holdings Ltd Under Armour, Inc. Class A AMC Networks Inc. Class A Consumer Staples PepsiCo, Inc. Costco Wholesale Corporation Colgate-Palmolive Company Coca-Cola Enterprises, Inc. CVS Health Corporation Mondelez International, Inc. Class A Estee Lauder Companies Inc. Class A Energy Schlumberger NV Halliburton Company EOG Resources, Inc. 17.0% 2.3 2.2 1.6 1.5 1.3 1.1 1.0 1.0 0.9 0.8 0.8 0.7 0.7 0.6 0.4 10.5% 2.9 1.6 1.6 1.3 1.2 1.2 0.7 5.8% 2.5 1.7 1.6 Financials American Express Company Ameriprise Financial, Inc. BlackRock, Inc. Intercontinental Exchange, Inc. Discover Financial Services Health Care Gilead Sciences, Inc. Celgene Corporation Actavis Plc McKesson Corporation Biogen Idec Inc. Vertex Pharmaceuticals Incorporated Alexion Pharmaceuticals, Inc. Illumina, Inc. UnitedHealth Group Incorporated Regeneron Pharmaceuticals, Inc. Bristol-Myers Squibb Company Perrigo Co. Plc Industrials Honeywell International Inc. Precision Castparts Corp. Tyco International Ltd. Cummins Inc. Danaher Corporation FedEx Corporation Raytheon Company Fluor Corporation G1:Ir 1.4 1.2 1.2 1.0 0.9 16.6% 2.7 1.6 1.6 1.6 1.5 1.4 1.2 1.2 1.1 0.9 0.9 0.9 10.2% 2.0 1.5 1.3 1.2 1.2 1.1 1.1 0.9 Boynton Beach General Employees' Pension Fund 11/24,!14 Information Technology Apple Inc. Microsoft Corporation Facebook, Inc. Class A Visa Inc. Class A Google Inc. Class A Google Inc. Class C Intuit Inc. salesforce.com, inc. SanDisk Corporation EMC Corporation Juniper Networks, Inc. Adobe Systems Incorporated Linkedln Corporation Class A Cognizant Technology Solutions Corporation Accenture Plc Akamai Technologies, Inc. Materials Praxair, Inc. Dow Chemical Company Martin Marietta Materials, Inc. 30.1% 6.3 3.4 2.4 2.4 2.2 2.1 1.6 1.5 1.3 1.3 1.2 1.1 1.0 0.9 0.9 0.5 4.0% 1.8 1.2 1.0 Representative Institutional Account - where applicable, excludes cash, ETFs and futures. There may be material differences between the representative 20 account and other accounts managed with the same strategy. Because of these differences, the information based on the representative account should not necessarily be relied upon. It should not be assumed that securities identified were or will be profitable or that decisions we make in the future will be ' • • ' profitable. Certain securities may not remain in the portfolio at the time that you receive this report. No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. The information shown above is supplemental to the GIPS presentation that can be ASSET MANAGEMENT, LLC found at the end of this book along with other important disclosures. Variation in totals due to rounding. > A BNv MELLON COMPANY- US Large Cap Growth Equity All Weather Outperformance July 1, 2005 - December 31, 2013 Boynton Beach General Employees' Pension Fund 11/24/14 US Large Cap Growth vs. Russell 1000 Growth Index Cumulative Excess Returns vs. Factor Leadership' Factor Leader Non -Factor Value Momentum High Quality Value Non -Factor Sentiment Excess Return2 +1.9% +0.0% +3.5% +0.8% +1.3% +7.4% -4.8% 35% m 25% a cc 15% cn E 5% Z5 a 68 -5% CU a LL -15% 25% Non -Factor +3.9% Value +3.7% 35% 30% 25% C-) C 3 C 20% CD T 15% m CA En M co 10% c 3 5% 0% 7/1/05- 2006 2007 2008 2009 ; 2010 2011 2012 ; 2013 ; -5% 12,/31/05 ■ Momentum ■ High Quality ■ Value — Cumulative Excess Return Source: FactSet Research Systems. 'Represents the performance difference between the most attractive quintile and the least attractive quintile of 21 stocks. Momentum Factor = Earnings Revision Ratio, High Quality = Cash Flow Return on Invested Capital, and Value = Price/Book. 2Represents US Large Cap Growth composite (gross -of -fees) calendar year excess return versus Russell 1000 Growth Index. Past performance is not a guarantee for future performance. The information shown above is supplemental to the GIPS compliant presentation that can be found at the end of this book along ASSET MANAGEMENT, LLC with other Important disclosures. > A BNY MELLON COMPANY" 11`12 US Large Cap Growth Equity Boynton Beach General Employees' Pension Fund 11/24/14 Annual Sector Leadership July 1, 2005 — December 31, 2013 US Large Cap Growth vs. Russell 1000 Growth Index Calendar Year Top/Bottom Sectors' by Total Effect Excess Return2 +1.9% +0.0% +3.5% +0.8% +1.3% +7.4% 3% 1 2% 1% -4.8% +3.9% +3.7% 1% -2% -3% 7/1/05-12/31/05 2006 2007 2008 2009 2010 2011 2012 2013 Source: FactSet Research Systems. 'CS = Consumer Staples, CD = Consumer Discretionary, EN = Energy, FN = Financials, HC = Health Care, IN = 22 Industrials, IT = Information Technology, MT = Materials, TS = Telecommunication Services. 2Represents US Large Cap Growth composite (gross -of -fees) calendar year excess return versus Russell 1000 Growth Index. Past performance is not a guarantee for future performance. The information shown above is supplemental to the GIPS compliant presentation that can be found at the end of this book along with other important disclosures. 3Representative Institutional Account— excludes cash and ETFs. There may be material differences between the representative account and other accounts managed with the ASSET MANAGEMENT, LLC same strategy. Because of these differences, the information based on the representative account should not necessarily be relied upon. > A BNv MELLON COMPANY- 6584 US Large Cap Growth Equity US Large Cap Growth Equity: Fee Schedule Boynton Beach General Employees' Pension Fund 11/24/14 65 Basis Points on the First $25 Million 45 Basis Points on the Next $25 Million 35 Basis Points on the Next $50 Million 25 Basis Points Thereafter 23 Fees are subject to change at the discretion of the manager. ASSET MANAGEMENT, LLC A BNY MELLON COMPANY US Large Cap Growth Equity Disclosure Boynton Beach General Employees' Pension Fund 11 /24/14 2006 9.08% 8.33% 9.07% < 3 Years 8_31% 1 NIM $214 $72,747 2007 15.33% 14.54% 11.811% < 3 Years 8.54% 1 NIM $222 $53,308 2008 -37.63% -38.08% -38.44% 16.00% 16.40% 1 NIM $127 $26,213 2009 38.51% 37.57% 37.21% 18.85% 19.73% 6 NIM $954 $34,783 2010 24.13% 23.35% 16.71% 21.60% 22-11% 6 0.22% $1,115 $39,438 2011 -2.19% -2.82% 2.64% 18.39% 17.76% 11 NIM $2,916 $37,484 2012 19.16% 18.40% 15.26% 17.03% 15.66% 14 0.25% $3,909 $41,344 2013 37.15% 36.28% 33.48% 13.83% 12.18% 22 029% $6,431 $47,589 ` Partial period represents data from 7/1/2005 Compliance Statement The Boston Company Asset Management, LLC (TBCAM) claims compliance with the Global Investment Performance Standards (GIPS®) and has prepared and presented this report in compliance with the GIPS standards. TBCAM has been independently verified for the years 2003 - 2013 - Verification assesses whether (1) the 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 the GIPS standards. Verification does not ensure the accuracy of any specific composite presentation The US Large Cap Growth Equity composite has been examined for the years 2008 - 2013. The verification and performance examination reports are available upon request. The 3 -year annualized standard deviation calculations may include prior period returns not covered by a performance examination_ Definition of the Firm The Boston Company Asset Management, LLC (TBCAM) is a registered investment adviser established in 1970 and a subsidiary of The Bank of New York Mellon Corporation. As of December 31, 2013, total firm assets were $47.6 billion of which $23.3 billion were assets managed by TBCAM personnel serving as dual officers of affiliated companies. Composite Description The US Large Cap Growth Equity Composite creation date is July 1, 2005 The Composite is composed of all fee -paying, discretionary accounts managed by TBCAM in this investment style. The US Large Cap Growth Equity Composite represents an equity strategy that primarily invests in U_S.-based companies with long-term growth prospects consistent with preservation of capital. The strategy may invest up to 25% of its total assets in non -U.S. companies. The use of derivatives is permitted. Prior to December 1, 2009, the Composite was known as the Research Growth Equity Composite. Prior to December 1, 2008, the Composite was known as the Growth Opportunity Equity Composite_ Effective January 1, 2006, portfolios that come under management on the twenty-first day of the month or earlier pin the Composite the following month; portfolios that come under management after the twenty-first day of the month join the Composite after one full calendar month under management Prior to January 1, 2006, new portfolios were included in the Composite after one full calendar month under management. Terminated portfolios remain in the historical record through the last full calendar month under management. Returns include realized and unrealized gains and losses plus accrued income The performance of the Composite is based in U.S_ dollars. Policies for valuing portfolios, calculating perfommance, and preparing compliant presentations are available upon request_ The Composite does not include the performance of accounts with investment restrictions that significantly hinder TBCAM from fully implementing its intended strategy. A complete list of 24 N/M = not meaningful ASSET MANAGEMENT, LLC i► A BNY MELLON COMPANY- US Large Cap Growth Equity Disclosure continued Boynton Beach General Employees' Pension Fund 11/24/14 composite descriptions is available upon request Benchmark The Composite's benchmark is the Russell 1000 Growth Index. The benchmark is used for comparative purposes only and is not covered by the Report of Independent Accountants_ The Russell 1000 Growth Index measures the performance of the large -cap growth segment of the U.S. equity market. Risk Measures The internal dispersion of annual returns is measured by the standard deviation of asset -weighted retums of portfolios that participated in the Composite for the full year. A standard deviation is not presented for periods with fewer than six portfolios participating for the full year. The 3 -year annualized standard deviation is calculated using 36 ane -month composite and benchmark retums. Minimum Account Size To Be Included In Composite To be included in the Composite, portfolios must meet the minimum account size requirement of $1 million. Cash Flow Policy Effective May 1, 2009, any portfolio that experiences a client -initiated cash flow (on a net daily basis) that is 30% or more of the portfolio's beginning -of -month market value is removed temporarily from the Composite_ The portfolio is excluded from the Composite the month of the cash flow_ The admission policy for new portfolios (described above) governs the readmission of the excluded portfolio to the Composite, based on the date of the cash flow. Fee Schedule Except where noted, performance is stated gross of management fees_ Effective January 1, 2010, net performance is calculated by subtracting the highest current management fee for the strategy from the gross performance, on a monthly basis_ Prior to January 1, 2010, net performance was calculated by subtracting the highest published management fee for the strategy (since inception) from the gross performance, on a monthly basis. The current standard fee schedule for the US Large Cap Growth Equity strategy is as follows: tis Basis Pants on the first $25 million 45 Basis Points on the next $25 rrullion 35 Basis Pants on the next $50 mullion 25 Basis Pants thereafter Other Information (The following infomnabon w not covered by the Report of Independent Accountants.) BNY Mellon Investment Management is one of the world's leading investment management organizations and one of the top U.S. wealth managers, encompassing BNY Mellon's affiliated investment management firms, weakh management organization and global distribution companies_ BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation and may also be used as a generic term to reference the Corporation as a whole or its various subsidiaries generally. To derive Ten Largest Holdings, Characteristics, Economic Sector Weightings, Country Weightings and Portfolio Holdings for presentation purposes, the portfolio manager has identified a representative institutional account to be used as a proxy for the strategy. This portfolio data should not be relied upon as a complete listing of the Account's holdings (or of an Account's top holdings) as information on particular holdings may be withheld if it is in the Account's best interest to do so Portfolio holdings and allocations are subject to change without notice and may not represent current or future portfoho composition. The Account data is "as of the date indicated. The information provided in this document 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 accounfs portfolio at the time you receive this report or that securities sold have not been repurchased. The securities discussed do not represent an acco ifs 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_ Investments made by TBCAM for the portfolios it manages may differ significantly in terms of security holdings, industry weightings and asset allocation from those of the benchmark. Accordingly, investment results and volatility of the portfolios may differ from those of the benchmark. Also, unlike the portfolios, the indices noted in this presentation are unmanaged, are not available for direct investment, and are not subject to management fees, transaction costs or other types of expenses that the portfolios may incur. Because of these differences, investors should carefully consider these limitations when evaluating the performance in companson to benchmark data as provided herein_ The impact of fees on performance can be 25 ASSET MANAGEMENT, LLC )• A BNY MELLON COMPANY- US Large Cap Growth Equity Disclosure Boynton Beach General Employees' Pension Fund 11/24/14 continued significant. A $125 million account with a fee schedule of the following: 608 for the first $20 million, _007 on the next $20 million, .006 on the next $60 million and .004 on the next $25 million, assuming an annual gross of fee return of 12%, would realize an annual net of fee return of 11.3996. This presentation or any portion thereof may not be copied or distributed without TBCAM's prior written approval_ Statements are correct as of the date of the material only. This document may not be used for the purpose of an offer or solicitation in any jurisdiction or in any circumstances in which such offer or solicitation is unlawful or not authorized. The use of corporate names or logos in this presentation, other than those of The Boston Company Asset Management, LLC or its affiliates, is for illustrative purposes only and rights to any logos, trademarks or servicemarks are owned by their respective entities. it is not known whether the fisted companies endorse or disapprove of TBCAM or any advisory services provided. Some information contained herein has been obtained from third -party sources that are believed to be reliable, but the information has not been independently verified by TBCAM_ TBCAM makes no representations as to the accuracy or the completeness of such information and has no obligation to revise or update any statement herein for any reason. 26 AssET MANAGEMENT, LLC 1 A BNY MELLON COMPANY'