Eagle | Equity Income Separately Managed Account

EQUITY PROGRAMS

  Government Securities
  Intermediate Conservative
  High Quality Tax-Free
  Short Term Conservative
  Core Fixed

Eagle Boston Investment
Small Cap Core Value

PORTFOLIO PERFORMANCE

Second quarter 2008

MANAGEMENT

Lou Kirschbaum
Managing Director, Portfolio Manager

Joined Eagle in 1986
36 years of experience, including 24 years as a portfolio manager
and six years as
research director
B.S., cum laude, Michigan State University (1970)

Investment team bios

EQUITY INCOME
INCOME, GROWTH and STABILITY

The Eagle Equity Income program offers clients the opportunity not only to take advantage of the security of steady income but also the opportunity to participate in the market's long-term growth potential. Equity Income clients historically have received annualized returns between 8 percent and 9 percent with a low measure of risk (standard deviation). The portfolio is diversified among common stocks, convertible bonds, convertible preferred stocks and real estate investment trusts (REITs).

INVESTMENT PROCESS

Income

Yield or dividend growth at or above the
S&P 500 Index
Demonstrated commitment to paying and increasing dividends

Growth

Dominance in expanding industry
Growth rate greater than inflation

Stability

Free cash flow and shareholder-oriented management
Stock price below estimated intrinsic value

Sell Discipline

Price Appreciation near or above sustainable level
Deterioration of company fundamentals, indicative of dividend cut
Occupation of too large a portion of total portfolio
Development of more attractive investment opportunity

Portfolio Characteristics | Equity Income

Typical market capitalization	Benchmark	Account minimum	Typical turnover	Typical number of holdings
$5 billion or greater	S&P 500 Index	$100,000	Less than 50%	30 to 35

Performance¹ | Equity Income (as of June 30, 2008)

Return to top

	— 1st Qtr —		— 2nd Qtr —		— 3rd Qtr —		— 4th Qtr —		— Annual —		S&P 500
	Gross	Net	Gross	Net	Gross	Net	Gross	Net	Gross	Net	Index
2000	-1.02%	-1.49%	1.91%	1.45%	5.44%	4.95%	5.98%	5.48%	12.72%	10.63%	-9.12%
2001	-3.99%	-4.45%	4.53%	4.03%	-4.99%	-5.44%	2.84%	2.34%	-1.94%	-3.81%	-11.88%
2002	4.42%	3.94%	-7.29%	-7.75%	-12.23%	-12.71%	5.03%	4.52%	-10.76%	-12.52%	-22.12%
2003	-2.45%	-2.93%	11.08%	10.58%	1.86%	1.36%	10.30%	9.78%	21.75%	19.45%	28.69%
2004	2.95%	2.46%	-0.05%	-0.52%	1.52%	1.04%	7.75%	7.23%	12.56%	10.43%	10.87%
2005	-0.13%	-0.61%	1.89%	1.39%	3.98%	3.48%	0.55%	0.06%	6.39%	4.34%	4.89%
2006	6.61%	6.13%	1.10%	0.63%	5.47%	4.99%	7.28%	6.78%	21.95%	19.73%	15.80%
2007	1.38%	0.91%	4.65%	4.16%	2.94%	2.46%	-3.05%	-3.49%	5.89%	3.94%	5.49%
2008	-6.24%	-6.67%	-5.99%	-6.42%	—	—	—	—	-11.86%	-12.66%	-11.91%

COMPOUNDED, ANNUALIZED RATES of RETURN Net of fees (as of June 30, 2008)

— Years —	— Percentage —	— $100,000 Compounded —
One	-13.67%	$86,333
Three	4.01%	$112,532
Five	6.86%	$139,359
10	2.87%	$132,682
15	7.03%	$276,940

Risk Information

The risks associated with Equity Income investing are based upon the identification of companies which possess both moderate growth rates as well as higher-than-average and consistent dividend distributions. Historically, dividend yields have been relatively constant and therefore have created a cushion for investors when stock prices have declined. However, as with all equity investing, there is the risk that a company will not achieve its expected earnings results, or that an unexpected change in the market or within the company will occur, both of which may adversely affect investment results. The biggest risk of equity investing is that returns can fluctuate and investors can lose money.

Not every investment opportunity will meet all of the stringent investment criteria mentioned to the same degree. Trade-offs must be made, which is where experience and judgment play a key role. Accounts are invested at the discretion of the portfolio manager and may take up to 60 days to become fully invested.

Disclosures

(1) The calculation of the performance data includes reinvestment of all income and gains and is depicted on a time-weighted and size-weighted average for the entire period. Calculations include reinvestment of all income and gains. This performance is after the deduction of both management fees and transaction costs. Performance figures include all of Eagle�s retail managed accounts. All composite performance data through 2006 have been verified by an internationally recognized accounting firm. Performance data for the current year have not been audited and are subject to revision. No inference should be drawn by present or prospective clients that managed accounts will achieve similar investment performance in the future. Because accounts are individually managed, returns for separate accounts may be higher or lower than the average performance stated above.

Performance data for the current year has not been audited and are subject to revision. Thus, the composite returns shown here may be revised and Eagle will publish any revised performance data.

Investing in equities may result in a loss of capital.