Pillar Pacific Capital Management, LLC (“PPCM”) has prepared and presented this report in compliance with the Global Investment Performance Standards (GIPS®).
 

1.

The performance results presented above reflect the Large Cap Equity Composite (“Composite”) performance from its September 1, 1993 inception at Pillar Point Capital Management, Inc. (“Capital”) through May 31, 1999, and is then linked to the identical Composite from June 1, 1999 at PPCM.  Capital began operating as an investment advisor on July 1, 1993, invested mainly in U.S.-based fixed income and equity securities, and formerly was an affiliate of PPCM.  PPCM, formerly named Pillar Point Equity Management, LLC, began operating as an investment adviser on June 1, 1999 and invests mainly in U.S.-based equity and fixed income securities.  In November 2007, Mindy Ying joined PPCM and brought her 5-person office and book of business to PPCM.  Prior to 2Q99, Firm Assets are those of Capital; from 2Q99 Firm Assets are those of PPCM.

2.

Mr. Arthur French, Chief Investment Officer and one of the founders of PPCM, was Senior Equity Portfolio Manager for Capital from its inception until June 1, 1999 when he moved to PPCM.  Mr. French was the sole decision-maker for the Composite at Capital and is continuing the same decision making process at PPCM.  Performance results for the Composite prior to June 1, 1999 were generated by Mr. French at Capital, and following May 31, 1999 by Mr. French at PPCM.  Performance records from both firms are available.  There have been no material changes in personnel responsible for management of the Composite.

3.

PPCM implements an active, bottom-up investment process.  Security analysis integrates a quantitative multi-factor valuation model and fundamental judgment.  Portfolio construction applies an optimization process to build broadly diversified portfolios and provide benchmark-constrained risk control.  The Composite includes all fee-paying discretionary accounts invested in diversified portfolios of large capitalization equity issues, with few tax or other constraints that would otherwise impede the objective of maximizing total return. Large capitalization equities are those with a market capitalization generally greater than $10 billion at the time of purchase.  The Composite includes only certain firm portfolios.  If client imposed restrictions hinder the full implementation of a composite strategy, regardless of the status of the legal discretion under an investment advisory contract, such client portfolios will be excluded from the composite; none have been so excluded.

4.

All fee-paying discretionary portfolios are included in firm composites; no non-fee paying portfolios are included in firm composites.  Segments of multiple-asset or balanced portfolios are included in single-asset composites.  Such segments are managed separately with their own identified cash balances.  New portfolios are included in a composite as of the first full month under management; closed portfolios are excluded from a composite as of the end of the last full month under management.  A complete list and description of firm composites is available on request. Firm assets include non-discretionary assets.

5.

The benchmark is the S&P 500 total return index.  The index is an unmanaged group of securities generally considered to represent the performance of the large capitalization sector of the U.S. equity securities market.  The S&P 500 Growth total return index is shown as additional information, beginning with the 4Q05 report, as the Composite has a growth orientation.  This index is the S&P 500/Barra Growth total return index from inception through 6/30/06 and the S&P 500/Citigroup Growth total return index thereafter.  The S&P 500/Citigroup Growth index is an unmanaged group of securities, and contains those S&P 500 stocks assigned by Standard & Poor's, wholly or in part, to the Growth style index based on algorithms using seven growth versus value measures.  The portfolios are actively managed and the structure of the actual portfolios and Composite are at variance to the indices.  Index returns reflect reinvestment of dividends but do not reflect fees, brokerage commissions, or other expenses of investing.  Index returns utilize S&P data obtained through Interactive Data.

6.

All portfolios are individually managed and are generally fully invested in equities.  Returns are calculated at least monthly and are time weighted.  Quarterly, annual and multi-year returns are calculated by linking monthly returns through compounded multiplication.  The Composite is asset weighted by aggregating assets and cash flows into a single portfolio.  The Composite was created in December 1995.  Prior to June 1, 1999, the portfolio in the composite is equities only; cash balances are deposited or withdrawn daily for all trade and income activity.  As of June 1, 1999, all portfolios in the composite are assets-plus-cash.  Trade date accounting is used.  Securities are priced using end-of-day market prices obtained from Interactive Data.  Returns include dividends, interest and realized and unrealized gains and losses.  Returns are presented net of trading expenses, and gross of taxes except for foreign withholding taxes on dividends.  Returns are calculated in U. S. dollars.  No leverage or derivatives are used.  Partial year returns have not been annualized.  An annualized return is equivalent to that annual rate of return which, if earned in each year of the indicated multi-year period, would produce the actual cumulative rate of return over the time period.  Additional information regarding policies for calculating and reporting returns is available upon request.

7.

As of March 31, 2008, the annualized standard deviation of the monthly returns since inception equals 17.6 % for the Composite versus 13.9 % for the S&P 500 benchmark and 15.2 % for the S&P 500 Growth index.  Calculation of annual dispersion of portfolio returns within the Composite is currently not meaningful, as there are five or fewer portfolios.

8.

Performance results are presented gross and net of investment management fees.  The net of fee returns reflect actual fees paid, monthly or quarterly in arrears as per the investment advisory contract.  Fees for certain accounts previously managed by Capital were set by Capital prior to the formation of PPCM, thus actual fees paid are different from the standard fee schedule.  The current fee schedule is: 0.75% per annum on assets up to $15 million; 0.65% on the next $35 million and 0.50% on assets over $50 million; paid quarterly in arrears based on end-of-period assets.

9.

Past performance is no guarantee of future results.

10.

PPCM has been verified for the periods September 1, 1993 through December 31, 2006 by PricewaterhouseCoopers.  A copy of the verification report is available upon request.