Frank Sands, Jr., CFA
Michael Sramek CFA
Sands Capital Management
1101 Wilson Boulevard
Suite 2300
Arlington, VA 22209

Frank Sands, Jr. is the lead portfolio manager for the segment of the Equity Fund managed by the team at Sands Capital Management, LLC (“Sands Capital”). Sands is currently President and Director of Research at Sands Capital. Prior to joining Sands Capital, he was a portfolio manager and research analyst with Fayez, Sarofim and Company. Sramek began his investment career as a research analyst at Mastrapasqua & Associates in 2000 prior to joining Sands Capital in 2001. He is a Senior Portfolio Manager and Research Analyst at Sands Capital. Sands Capital Management was founded in February 1992 with the belief that a dedicated investment team committed to, and focused on, a high-quality growth investment strategy could create wealth for its clients over time. The investment strategy has been developed by Frank Sands, Sr., the current Chief Executive Officer and Chief Investment Officer of Sands Capital, who entered the investment management industry as an analyst in 1969. In September 2008, Frank Sands, Sr. will step down as CIO and CEO, but will remain active in the investment process. Frank Sands, Jr. who has 14 years of investment experience, eight of which have been at Sands Capital, will assume the CIO and CEO roles. Besides Sands Sr. and Jr., the investment team is comprised of eight senior investment-team members, who are supported by eight research associates. The firm is independent and 100% employee owned.

Sands will manage approximately 10% of the assets of the Equity Fund. Sands believes that over longer periods of time, stock prices track earnings growth. The investment objective is to identify companies that can sustain above-average earnings growth relative to the broader market, typically over the next three to five years. Sands believes great investment ideas are rare, and runs a concentrated portfolio of high-quality, seasoned, growing businesses across an array of attractive and growing business spaces. Grassroots research—bottom-up and company focused—is the cornerstone of Sands’ investment process. All research analyses and conclusions are internally generated using a variety of internal and external data sources. The investment team comprises ten generalists, each with expertise in certain sectors, who conduct the firm’s research.

Sands seeks to identify the potential leaders in attractive business spaces. To identify such companies, Sands evaluates six key factors. 1) Sustainable above-average earnings growth. The goal is to identify the key drivers of revenue and earnings growth that will allow a company to grow faster than the broad market for at least the next several years. They generally want holdings to have at least 15% to 16% annualized growth. 2) Leadership position in a promising business space. The team looks for companies with large and preferably growing market share. These companies typically achieve greater profitability than their peers. 3) Significant competitive advantage/unique business franchise. The team looks for companies with pricing power and significant barriers to entry. Simply said, they are looking for moats to protect the business franchise. 4) Clear mission and value-added focus. They examine management’s historical ability to execute business plans and evaluate customer feedback. They like to see an independent board of directors, a low percentage of stock options going to top management, the CEO’s salary aligned with shareholders’ interests (not excessive), and conservative accounting practices. 5) Financial strength. They prefer little or no debt, prudent use of leverage and rising levels of cash. They frequently expect to see increasing return on invested capital over the period of time they own a business. 6) Rational valuation relative to market and business prospects. While the team focuses their work on the business aspect of potential portfolio companies they do pay attention to valuation. When adding new companies to the portfolio they are willing to pay a rational price, often a perceived premium. Over time they tend to ignore short-term stock price movements and rarely if ever sell a company just on valuation alone.

To determine whether a company meets these criteria, one or more members of the investment team build the investment case. The investment case includes a proprietary detailed earnings model, an explanation as to exactly how the company meets the six criteria listed above, the key metrics by which the company can be measured, the outstanding/unresolved issues relating to the company, and the hypothetical sell case for the company. This information is shared with the larger investment team, and a vetting process ensues. The vetting process can last from several weeks to several months, during which additional questions are asked and answered, and additional information is gathered. After all outstanding issues are resolved, and with significant input from the investment team, the final investment decision is made.

References to other mutual funds should not be deemed an offer to sell or solicitation of an offer to buy shares of such funds.