Progress Investment Management Company LLC

Fees and Compensation
Separately managed account fees are subject to negotiation. However, the fees for the
Progress Common Trust are described below. A client may pay more or less than the fees
set forth below depending upon the particular circumstances of the client, the size and
scope of the overall client relationship, or as otherwise agreed with specific clients.

The specific manner in which fees are charged by Progress is established in a client’s
written investment management agreement with Progress. Progress will generally bill its
fees on a quarterly basis in arrears. Clients may elect to be billed in advance or arrears
each calendar quarter. Clients may also elect to be billed directly for fees or to authorize
Progress to directly debit fees from client accounts. For those clients whose fees are
charged in advance, management fees shall be prorated for each capital contribution and
withdrawal made during the applicable calendar quarter. Accounts initiated or terminated
during a calendar quarter will be charged a prorated fee. Upon termination of any account,
any prepaid, unearned fees will be promptly refunded, and any earned, unpaid fees will
be due and payable.

Such charges, fees and commissions are exclusive of and in addition to Progress’ fee,
and Progress shall not receive any portion of these commissions, fees, and costs.

To the extent that Progress does not allocate client assets to Sub-advisers, and, instead,
manages such assets directly, the Brokerage Practices section further describes the
factors that Progress considers in selecting or recommending broker-dealers for client
transactions and determining the reasonableness of their compensation (e.g.,
commissions).

Common Trust Fees
Progress charges Trust participants a monthly fee based upon a percentage of the
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custodian’s market value of its portfolio at the end of each month. Fees are payable
monthly in arrears by participants. Fees charged to participants will vary depending upon
the amount of a participant’s investment in the trust. Trust participants who invest in both
the Common Trusts, and/or multiple investment funds within trusts, will have their account
values aggregated and their fee rate determined in accordance with the following
schedule, based upon the total aggregated value of the participant's accounts in the Trust,
or multiple investment funds, and the corresponding annual percentage fees:

                 Fee Schedules
                   Aggregate Value of Accounts        Annual Percentage Fees (%)

                   Com m on Trust (Dom estic Funds)

                   $5 million - $25 million                                 0.75
                   $25 million - $50 million                                0.70
                   $50 million - $100 million                               0.65
                   $100 million - over $150 million                         0.60

The Common Trust is subject to various transactional and administrative costs. Ongoing
costs are allocated in proportion to a participant’s investment in the Trust; however, a
participant directly bears the costs associated with the entry into or exit from Trusts. The
associated entry or exit costs are capped at 0.50% of the managed assets in the Common
Trust.

From Trust fees, Progress pays all investment management Sub-Adviser fees, trustee
bank, custodial, consulting, legal, audit, and monitoring fees for the Trust in its domestic
(U.S.) funds.

Customized Separately Managed Account Fees
Fees for Separately Managed Accounts are comparable to Trust fees but are negotiable
on a case-by-case basis to satisfy customized client requirements. These fees are
calculated as a percentage of assets under management and generally are charged
quarterly in arrears based upon the custodian’s amount of assets under management at
the end of the quarter. Subject to negotiation, Separate Account fees may or may not be
all-inclusive of the services above (e.g., custodial bank charges, sub-advisory fees, etc.)
provided for in Trust fees.

Hedge Fund Strategy Fees
As clients require, Progress may include hedge fund strategies within its portfolios. In
such situations, Progress currently charges a management fee ranging from 50-80 basis
points depending upon the amount of assets allocated. This fee is in addition to the fees
paid to the underlying hedge funds in which a Progress client may invest.
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Limited Negotiability of Advisory Fees: Progress retains the discretion to negotiate fees on a
client-by-client basis. Client facts, circumstances and needs are considered in determining the
fee schedule. These include the complexity of the client, assets to be placed under management,
anticipated future additional assets, related accounts, portfolio style, account composition, and
reports, among other factors. The specific annual fee schedule is identified in the contract
between Progress and the client.
Termination of the Advisory Relationship: Clients have a period of 10 business days from the
date of signing the client agreement to terminate the agreement and receive a full refund of all
fees. Thereafter, a client agreement may be canceled at any time, by either party, for any reason
upon receipt of 30 days written notice. As disclosed above, certain fees are paid in advance of
services provided. Upon termination of any account, any prepaid, unearned fees will be promptly
refunded. In calculating a reimbursement of fees, we will pro rate the reimbursement according
to the number of days remaining in the billing period.
Additional Fees and Expenses: In addition to Progress’ advisory fees, clients are also
responsible for the fees and expenses charged by custodians and imposed by broker dealers,
...

Types of Clients
Progress provides investment advisory services to corporate pension and profit-sharing plans,
government plans, Taft-Hartley funds, trusts, foundations, endowments and tax-exempt
charitable organizations, municipalities and other U.S. and international institutions.

Common Trust
The minimum investment by a participant in the Common Trust is $5 million.

Separate Account
The minimum account size for a Separate Account is generally $75 million, but Progress
may consider accepting smaller amounts for the account if additional funds are expected
to be added to the account or other positive extenuating factors exist.

Methods of Analysis, Investment Strategies

Progress’ goal is to build portfolios with the desired return and risk characteristics relative
to a policy benchmark with three primary objectives: 1) Satisfy client objectives and
guidelines with respect to managers and the fund (e.g., ownership, AUM, expected risk
and performance levels, capacity, etc.); 2) Maximize target fund alpha with manager
allocations that reflect the firm’s confidence in individual manager risk/return expectations
and managers’ strategy consistency; and, 3) Manage acceptable total and relative risks
at the individual manager and fund levels. Portfolio risks, as measured by style orientation,
portfolio characteristics and factors, economic exposures and position size are captured
and summarized by the fund’s overall tracking error.

The firm’s primary investment objective is to implement an active, relative return strategy
that meets or exceeds client performance objectives with an acceptable level of risk,
subject to investment and program guidelines. Progress’ investment process is a team-
and consensus-oriented approach. The Investment Committee is responsible for
investment decisions, based on staff recommendations regarding manager selection and
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portfolio construction and management. Investment guidelines are established for each
sub-advisor consistent with the client’s objectives, relative to each manager’s expected
contributions to the overall fund risk and return profile, and Progress’ assessment of the
manager’s investment strategy and asset class. Sub-Adviser guidelines are established
in consultation with the Sub-Adviser to allow such firm to exploit its strengths as they relate
to asset selection, portfolio construction and portfolio management, while controlling total
and relative portfolio risk with the objective of generating alpha relative to the assigned
benchmark.

Risk of Loss
Securities investments are not guaranteed and clients may lose money on their
investments. Progress asks that clients work with the firm’s investment team to ensure
tolerance for volatility, liquidity needs, tax status, and distribution/withdrawal rates at the
onset of the relationship, and on a continuous basis, is clearly articulated and understood
by both parties so that investments can be adjusted should changes in a client’s situation
occur.

The risk and uncertainties that may affect performance include, but are not limited to,
general market conditions, unexpected events in the economy, acts of terrorism, changes
in clients’ requirements or demands, cash flow needs, and shifts in market demand.

Different types of investments involve varying degrees of risk, and it
should not be assumed that future performance of any specific
investment or investment strategy (including the investments and/or
investment strategies recommended or undertaken by Progress and its
Sub-Advisers) will be profitable or equal any specific performance
level(s).