Rorer Asset Management, LLC

OUR PHILOSOPHY

A disciplined philosophy for a disciplined process

It�s all about discipline.

� Our disciplined approach to security selection

� Our disciplined investment process

� Our disciplined team of investment professionals

� Our disciplined approach to client service

The cornerstone of Rorer�s investment philosophy is to purchase high quality companies with strong fundamentals that are exhibiting both attractive relative valuation and strong potential for growth. The firm has found that this approach provides excellent risk adjusted returns across investment cycles.

We never waver from our approach. Never.

For more than 20 years, we�ve applied our model consistently, through all kinds of market conditions. We don�t fall prey to the latest market craze in search of short-term performance. We invest for long-term success. We never waver from our approach. Because, over time, it�s proven to work.

THE BUY PROCESS (For further detail, please view the Firm Profile)

Our process begins with stock selection. We start with a quality universe of about 1,000 companies. We�ve designed a rigorous quantitative screening process that filters out companies that do not meet our standards. The securities that continue on through our relative valuation screens are those which are trading below historic valuation norms relative to the market.

Next, the securities that are attractive in terms of relative valuation proceed through our earnings momentum screen, which seeks to identify those securities that have a catalyst for change in place. Securities that pass our quantitative screens move on for further research by our team of analysts.

The Rorer research process involves stringent fundamental and economic analysis, and is as rigorous and disciplined as the quantitative screens that comprise our proprietary model.

To contain risk, we abide by certain guidelines designed to limit exposure to any single security, industry or sector.

THE SELL PROCESS (For further detail, please view the Firm Profile)

Like our buy process, our sell process is designed to eliminate the emotion often associated with the decision of whether or not to sell a particular stock. It seeks to realize profits after they have been earned, or, conversely, to conserve capital when circumstances dictate. We have strong rules in place which govern when we sell securities. In many ways, these rules emulate the ones that dictate why we bought the stock in the first place. We ask ourselves a few questions: Has the stock met our expectations? (fig. 01) This is our Target Price discipline. When a security reaches the predetermined price at which the additional risk of keeping it exceeds the prospect of greater price appreciation, we sell. Has the stock fallen short of our expectations? (fig. 02 and 03) This is our Relative Stop/Loss Discipline. We require the sale of any stock that, from the firm�s average price, under-performs the S&P benchmark by a specified margin (15% in Large Cap; 20% in Mid Cap). Have the fundamentals changed? If the factors that guided our decision to buy the stock have changed, we sell it. These factors may pertain to the economy, the industry, or the company itself. Do we need to pare back? As a risk-reducing measure, we realize profits by selling a partial position of any security that grows, through capital appreciation, to as much as 5% of the portfolio. Likewise, we limit exposure to any one industry or sector.

PORTFOLIO DESIGN (Also see Portfolio Data)

Our disciplined approach to reducing risk and preserving capital

It all starts with a highly disciplined investment process designed to reduce performance volatility with the expectation of achieving competitive risk-adjusted returns across market cycles.

Our portfolios: a synopsis

Mid Cap Relative Value Equity*

� Approximately 40 U.S. domiciled companies

� Market capitalization: $1 billion to $10 billion at purchase.

TEAM APPROACH

Disciplined and dedicated, all of the Rorer professionals are at your service.

Our firm is owned, in part, by its employees. We�re proud to say that everyone on staff is highly experienced, highly educated, and deeply committed to the discipline of the Rorer philosophy, first developed by our founder, Ted Rorer, more than 20 years ago.

We believe that the best solutions are found by harnessing the minds and talents of many. That�s teamwork. Teamwork is the foundation for everything we do at Rorer�from our research effort to our approach to client service.

All Rorer equity portfolios receive the benefit of our investment process. The Investment Policy Committee, consisting of Edward C. Rorer, Clifford B. Storms, Jr., and Rorer�s Senior Equity Analysts, make the final stock selection decisions. Every Rorer employee is part of the team that works closely with our clients and their financial consultants in helping them reach their investment goals.

There�s a place for Rorer in your portfolio.

Where your investments need reduced volatility without sacrificing the opportunity for returns, you need the discipline of Rorer Asset Management, LLC.

Portfolio Data

Performance


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