BB&T Corporation 401(k) Savings Plan. Participant Guide

BB&T Corporation 401(k) Savings Plan Participant Guide

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WILL YOU BE READY? A secure retirement it s up to you. A gold watch, a pension check and Social Security for many years, they were enough to provide retirement peace of mind for American workers. For tomorrow s retirees, the message is clear: to have a financially secure retirement, you must take matters into your own hands. Those days are over. Today s retirees are finding that Social Security alone is not enough to cover bare essentials, much less a comfortable standard of living. Even those with corporate pension plans often find themselves struggling to keep pace with rising costs of living. The key is starting soon and saving regularly. We can help, with a Five-Step Retirement Strategy that is built around your company s retirement plan and provides a way for you to customize your goals and resources. Your Five-Step Retirement Strategy: 1 2 3 4 5 Calculate how much you will need for retirement Learn how your company s plan works Decide how you will invest Enroll Stay on track 13 BB&T1

1 Step 1: Calculate how much you will need for retirement You may need more money than you think. The first step in successful retirement planning is calculating the amount of income you will need at retirement. It s a process that should be based on facts, rather than wishful thinking. Perhaps you ve heard some of the common myths below: Myth: Social Security will be enough for me. Myth: I won t need much money when I retire. Myth: I ll only be retired a short time. Myth: I ve got plenty of time to save for retirement. Fact: Many retirees find that Social Security alone isn t enough to make ends meet, much less pay for the extra indulgences that make retirement worthwhile. According to the Social Security Administration, workers with average earnings can expect retirement benefits that replace about 40% of their average lifetime earnings.* Fact: Older people are generally in better health than ever. Many retirees have very active lifestyles and need the money to pay for them. So while some expenses such as housing or commuting costs may go down in retirement, others, like medical expenses, travel and entertainment are likely to go up. Fact: People are living longer these days, and they re retiring earlier. Most people need to have retirement income that will last at least 15 years, and probably longer. Fact: Many of us tend to live and spend for the moment. Most people underestimate how much they ll need to save to provide an adequate retirement income. *Social Security Administration Retirement specialists recommend saving 10% to 15% of your annual pretax pay to afford retirement. 14

INFLATION IS A FACTOR A MAJOR FACTOR. With improvements in medical science and a trend toward living longer, you could easily spend as much as a third of your life in retirement. An adequate monthly income at age 65 or 70 will shrink in buying power each year because of inflation. It is estimated that the cost of living will double every 20 years. For some items such as prescription drugs costs are likely to rise even more. THANKS TO INFLATION, THE FUTURE WILL BE EXPENSIVE. Today In 20 Years New Car (Average MSRP) $33,432 $74,503 Prescription Drugs $838/yr. $2,431/yr. Food Expenses $495/mo. $1,103/mo. Movie Ticket $8.50 $16 Today s new car price is the average manufacturer s suggested retail price (MSRP) for 2007 models 101 models included ranging from economy cars to luxury sedans. Source: Edmunds.com and NPI. New car, food expenses and movie ticket 20-year estimates based on annualized CPI rate of 4.088% from 1956-2006. Prescription drug 20-year estimate based on annualized CPI rate for prescription drugs of 5.47% from 1972-2006. Source: Bureau of Labor Statistics. Even at low rates of inflation, the buying power of the money you save erodes each year. Therefore, when figuring how much retirement income you ll need, you must take into account the impact of inflation during your retirement years. The worksheet on the next page is designed to give you a basic estimate of the savings you will need when you retire. If you are married, you and your spouse should each fi ll out a copy of the worksheet. (Be sure to take your marital status into account when entering your Social Security benefi t on line 4.) 15 BB&T2

Retirement Savings Calculator Worksheet Example 1 Enter your current annual income. $30,000 You 2 Enter the percentage of annual income you want during retirement..75 (Most experts recommend between 60% and 80% of your current annual income to maintain your current standard of living.) 3 Multiply line 1 by line 2. $22,500 4 Enter the amount you expect to receive annually from Social Security. $12,000 If your annual income is: under $25,000, enter $8,000 between $25,000 and $40,000, enter $12,000 over $40,000, enter $14,500 For married couples, enter either the lower earning spouse s benefi t based on his or $0 her income, or 50% of the higher earning spouse s benefi t, whichever is higher. Note: These fi gures are estimates based on examples provided by the Social Security Administration. For a more personalized estimate, enter the appropriate benefi t fi gure from your Social Security statement provided by the Social Security Administration. (1-800-772-1213, www.ssa.gov) 5 Enter the amount you expect to receive annually from your employer s pension plan (if applicable). $0 This is typically a plan that is funded by your employer and pays a fi xed benefi t at retirement based upon years of service and salary. This does not include your salary deferral plan. The popularity of pension plans has been declining in recent years. 6 Enter the amount of part-time employment income you expect to receive in retirement. $0 7 Enter any other annual income you expect to receive, such as rental income, etc. $0 8 Add lines 4 through 7. $12,000 9 Subtract line 8 from line 3. This is the amount of income you are short in each retirement year. $10,500 10 Now adjust your current replacement income for infl ation by multiplying line 9 by the $19,005 factor from the table below. The infl ation factor fi gure is below the number of years you have left until you retire. (For this example we are assuming 20 years left to retirement, so we multiply $10,500 by 1.81.) 11 Enter the value of your current assets (savings, investments, etc.) adjusted for growth. $93,200 (Example: $20,000 multiplied by the investment factor of 4.66 from the table below.) 12 How much would you need to have at retirement to give you the yearly income in line 10? $190,050 Multiply line 10 by a factor of 10. (Assumes 3% infl ation, 8% investment return and that you will need 15 years of retirement income.) 13 Subtract line 11 from line 12 to fi nd how much you d need to save. $96,850 14 How much would you have to set aside each year in order to work toward a retirement $2,116 goal of $96,850? Divide line 13 by the present value factor from the table below. (Example: $96,850 divided by 45.76.) 15 The amount you need to invest each month toward retirement. Divide line 14 by 12. $176 Number of Years Until Retirement 5 10 15 20 25 30 35 40 Infl ation Factor (3% infl ation) 1.16 1.34 1.56 1.81 2.09 2.43 2.81 3.26 Investment Factor (8% return) 1.46 2.15 3.17 4.66 6.84 10.06 14.78 31.72 Present Value Factor (8% return) 5.87 14.49 27.15 45.76 73.11 113.28 172.32 259.06 Performance is not guaranteed. All calculations, totals and returns are hypothetical and for illustrative purposes only and are not indicative of the performance of any investment or savings plan. It does not suggest an actual compounded annual rate-of-return or account growth. Income taxes are not considered in these examples and are due upon withdrawal. Withdrawals before age 59½ may be subject to additional tax penalties. 16

REMEMBER A LITTLE MONEY GOES A LONG WAY! One of the best ways to increase your retirement savings is to increase your plan contribution every time you get a raise. Another is to reduce your spending and invest it promptly. Even a simple change such as bringing a bagged lunch to work a few times a month can make a difference. Check out the following examples of small sacrifices that can have a big impact on your retirement income: Unit Price Per Week Per Year If Invested in Plan For 40 years 1 specialty coffee per day $2.50 $17.50 $912.50 $400,026 1 movie per week $8.50 $8.50 $443.00 $193,766 1 candy bar per day $0.55 $3.85 $200.75 $80,006 Assumes 4% annual price infl ation, deposits to plan at the end of each month and 8% average annual returns, net of fees, no taxes apply. There are 52.143 weeks in a 365-day year. THE BEST TIME TO START WAS YESTERDAY. THE NEXT-BEST TIME IS TODAY. Waiting to begin your savings plan can have a huge impact on your results. A delay of even a few years could cost you thousands of dollars. Let s consider the example of Don and Maria: The Power of Compounding Starts Investing at Age: 45 25 Stops Investing at Age: 65 65 Monthly Amount Invested: $300 $100 Total Amount Invested: $72,000 $48,000 Balance at Retirement: $171,798 $324,180 Don Maria Performance is not indicative of future results. This example is based on a hypothetical annual return and is for illustrative and educational purposes only. It is not representative of the performance of any mutual fund and is not intended to be a projection of future values. Mutual funds are subject to risks, such as the possible loss of principal, and rates of return will vary from year to year. This example assumes an annual rate of return of 8%, with all dividends and capital gains distributions reinvested. Taxes are not considered in this example and are due when distributions are taken from the plan. This illustration assumes contributions are made at the beginning of each month. 17 BB&T3

2 Step 2: Learn how your company s plan works Your company-sponsored retirement plan provides an excellent foundation. A salary deferral plan can be one of your best tools for creating a secure retirement. Here is a quick look at some of the advantages of participating in your company-sponsored retirement plan: TAX ADVANTAGES A salary deferral plan provides you with two important tax advantages.* First, contributions to your plan are pretax. Your contributions are withheld from your pay before federal and state income taxes are deducted, and taxes are not paid until you take a distribution from your plan. Second, you will enjoy the benefits of tax-deferred savings. You only pay taxes on your plan s earnings when the money is withdrawn. The combined result is a retirement savings plan you cannot afford to pass up. * BB&T and its representatives do not offer tax advice. Please consult your tax professional regarding your individual circumstances. FLEXIBILITY Over time, your personal circumstances can change, and your company retirement plan can change with you. Periodically you are allowed to adjust the amount you contribute to the plan. You ll also have the option to modify your investment choices. Your company-sponsored plan is the easiest way to accumulate retirement savings. EASE AND CONVENIENCE There simply is no more convenient way to accumulate retirement savings. The money you choose to contribute is deducted from your pay and contributed to the plan by your employer. Your money automatically goes to work based on your investment choices before you are tempted to change your mind about investing it. PORTABILITY You own your salary deferrals and any plan earnings on those deferrals. If your employment ends for any reason, the money is yours to take with you. By transferring your eligible roll-over distribution to an IRA or your new employer s plan, you can continue deferring taxes and growing your retirement savings until you make withdrawals. 18

THE SPENDABLE PAY ADVANTAGE Arlene earns $25,000 a year and she wants to save 5% of her pay or $1,250. She files a joint return with her husband and they are in a 25% federal income tax bracket. Here is a comparison showing how contributing through a pretax plan, as opposed to saving in a traditional after-tax savings account, can result in more spending money for Arlene. Retirement Savings Through Pretax Plan Taxable Savings Outside Plan Gross Pay $25,000 $25,000 Less: Pretax Contribution $1,250 $0 Taxable Pay $23,750 $25,000 Less: U.S. Income Taxes (25% of Taxable Pay) $5,938 $6,250 Less: FICA Tax (7.65% of Gross Pay) $1,913 $1,913 Less: Taxable Savings $0 $1,250 Spendable Pay $15,899 $15,587 Increase in Spendable Pay $312 N/A This example is for illustrative and educational purposes only. COMPANY MATCHING CONTRIBUTIONS CATCH-UP CONTRIBUTIONS Many employers will match a percentage of your contribution. This can quickly add up as additional savings in your account. You ll want to take advantage of this free money if it is offered under your company retirement plan. See the Plan Highlights section of this booklet for more information. If you happen to be one of those who weren t able to save earlier in life, utilizing the catch-up provisions of your employer s plan may be a way for you to save more. If you are age 50 or older, you may be able to make additional annual pretax contributions. See the Plan Highlights section of this booklet for more information. 19 BB&T4

YOUR COMPANY-SPONSORED RETIREMENT PLAN OFFERS A NUMBER OF INVESTMENT OPTIONS. Your company-sponsored retirement plan will allow you to decide how your retirement savings will be invested. Typically you can choose from a variety of mutual funds, so you can build a portfolio suited to your specific needs. HOW A MUTUAL FUND WORKS A mutual fund combines the money of thousands of people and invests it in a variety of assets typically stocks, bonds and money market investments. Mutual funds offer individual investors the opportunity to participate in a large portfolio of investment holdings with a relatively modest amount of money. 1 2 3 4 5 Your money is pooled with money from other investors who have similar objectives. Mutual funds are managed by professional money managers dedicated to finding attractive investment opportunities. Most funds own hundreds of stocks and/or bonds. This gives you the benefit of greater diversification and risk management than you could achieve on your own. Investment earnings are paid back into the fund, and operating expenses are paid out of the fund. The remaining income and capital gains are distributed to fund shareholders. In most retirement plans, these distributions are automatically reinvested in additional shares of the fund. TYPES OF MUTUAL FUNDS When you enroll in your company s retirement plan, you will be asked to structure your investment portfolio, choosing from the available mutual funds. As you read the fund descriptions, it s important to note each fund s investment objectives; what assets it invests in; and the level of potential risk associated with that type of portfolio. 20

You ll see a correlation between the potential risk and the potential reward: Money market funds and bond funds provide more conservative returns along with lower potential risk of loss. Stock or equity funds offer the opportunity for high returns but carry a higher risk of loss. Some funds offer a portfolio that combines stocks, bonds and money market investments. By considering your retirement savings goal, the amount of time you have to allow your plan investments to grow, and your own tolerance for risk, you can select the funds that best match your needs. Remember, you can periodically change your choices as your needs and resources change. Asset Class Equities (Stocks) Description How Investors Make Money How Investors Lose Money When you buy shares of stock in a company, you become one of the owners of the company. Companies sell their stock to investors to raise money. Stock investors can make a profit by selling their shares for more than the price they paid. Some companies also pay stockholders regular dividends from company earnings and profits. Investors who sell their shares at a lower price than they paid lose some of their invested money. If the company issuing the stock goes bankrupt, a shareholder could lose the entire amount invested. More Fixed Income (Bonds) Stable Value (Guaranteed Investment Contracts) Larger companies, the U.S. government, and various governmental units issue bonds to investors to raise money. When you purchase a bond, you are lending your money to the bond issuer for a certain period. Offered by corporations, insurers, banks and other lending institutions, these interest-bearing obligations generally do not fluctuate in value. Bonds pay interest to investors. The interest rate is usually fixed. Another way to make money from a bond is to sell it prior to maturity at a price higher than your purchase price. Guaranteed investment contracts pay interest to investors at a rate specified in the contract. If you sell a bond prior to maturity for less than you paid for it, you will lose money. It is possible to lose all the money invested in a bond if the bond issuer has severe financial problems and can t repay the debt. It is possible to lose money if the issuer defaults, failing to pay the investor the promised interest or to repay principal. Potential Risk/Reward Money Market (Cash Equivalents) Money market securities take different forms but are characterized by a very short time to maturity. Investors receive a set income and are promised a return of their invested principal at the end of the term. It is possible to lose money if the issuer defaults or returns only a portion of the amount invested. Less 21 BB&T5

3 Step 3: Decide how you will invest These tools can help you match your investments to your goals and resources. In addition to the diversification you achieve by participating in a mutual fund, your plan allows you to further diversify by choosing multiple funds and deciding what percentage of your plan contribution to invest in each. Depending on your plan, the following tools may be able to help with your investment elections. Check with your plan administrator to see if these options are available to you. LIFECYCLE FUNDS Lifecycle funds may be a great choice for an investor who prefers not to constantly monitor his or her investments. This type of fund offers you the benefit of selecting a single investment. Each fund is assigned a Target Retirement Date. For example, a Retirement Fund 2020 assumes that an investor is looking to retire in the year 2020. Each fund then invests in a mix of mutual funds. The fund s allocation (or percent invested in stock funds vs. bond funds) is based upon the projected retirement date of the fund. As the target retirement date draws closer, the allocation of the fund begins to shift toward bonds and short-term investments (historically considered to be less-risky investments), thus making the fund a more conservative investment. Lifecycle fund managers also regularly review their portfolios and depending on their outlook for the economy, interest rates and the financial markets, the fund s allocation is adjusted within set limits. MODEL PORTFOLIOS Model portfolios are designed to provide automatic diversification based on your risk tolerance. You may choose one of the model portfolios or select your own mix of funds. MANAGED PORTFOLIOS BB&T has partnered with ProNvest, an objective, independent investment advisor, to provide participants retirement education, investment recommendations and professional account management. At no cost, you will have access to many benefits including an online retirement planner and the ability to contact retirement counselors by phone to request help with a suggested asset allocation. ProNvest offers additional services for a fee. If you re a do-it-for-me investor, you can hire ProNvest to actively manage your account, meaning ProNvest will reallocate and rebalance your account on a quarterly basis. ProNvest will provide ongoing advice on your behalf and continue to manage your account for a reasonable annual fee based on your account balance. As a plan participant, you are responsible for directing the investment of your retirement plan accounts. Sample portfolios are provided for your education and are not intended to be personal investment recommendations. Investing involves certain risks, which may include loss of your principal invested. The shares of investments offered by your retirement plan are not FDIC insured and are not deposits or obligations of, or endorsed or guaranteed by, Branch Banking and Trust Company or its affi liates. 22

4 Step 4: Enroll You re ready. Enroll now! Now that you ve calculated the amount of retirement savings you re likely to need and have become familiar with your investment options under your company-sponsored retirement plan, it s time to take the most important step: Enroll. 1. This is the amount I will save in my employer s plan each month: $. Currently, that is % of my salary. 2. I have completed the enrollment and salary deferral agreement. 3. I have made my investment elections. 4. I have designated my beneficiaries. 5. I will review my plan and increase my contributions on this date:. Starting your retirement savings today is the best thing you can do for your future. 23 BB&T6

5 Step 5: Stay on track Review your plan periodically. Your ability to contribute to your plan and your tolerance for risk will probably change as the years pass. Younger people have a longer investment time frame and often are comfortable with more investment risk, since they have many years to make up any short-term investment losses. As a result, young people may consider putting most of their retirement plan money into stock funds. As retirement gets closer, people typically have less tolerance for risk and tend to switch some of their stock investments to bond funds to add more relative stability to their portfolios. When investors enter retirement, protecting and preserving principal can become even more important. However, keeping some money in stock funds can help provide a hedge against inflation. REBALANCING YOUR PORTFOLIO: WE CAN DO IT AUTOMATICALLY A change in your tolerance for risk is just one reason to review your retirement plan account. Just as important are periodic reviews to see if your plan has shifted out of the asset balance you want to maintain. Why would that happen? Because some of your investments are likely to grow faster than others. Over time, that can shift the balance of your portfolio in favor of these faster-growing investments. When this occurs, you may want to shift some money to more conservative investments simply to maintain the overall percentage you originally designated for each type of asset. Automatic Fund Rebalancing We make it easy to monitor results and rebalance with a feature called Automatic Fund Rebalancing. Go to BBT.com/PlanTrac and let us know the frequency you want this automatic review to take place: annually, semiannually, quarterly or monthly. We ll do the rest. OTHER WAYS TO STAY ON TRACK Increase your dollar contribution or deferral percentage Make catch-up contributions, if needed, after age 50 Avoid setbacks such as: Taking a hardship withdrawal Taking a plan loan Stopping your plan contributions Cashing out of the plan if you leave your employer 24

WHEN YOU RETIRE OR LEAVE YOUR JOB You will have access to your money when you retire or leave your job. However, it is very important to work with a financial advisor before withdrawing your funds because of the potential tax liability plus a 10% early withdrawal penalty if you withdraw funds before the law allows. BB&T can assist with a direct rollover into an Individual Retirement Account (IRA). We can also help you determine the optimum timing for withdrawals to provide the retirement income you ve worked to achieve. For assistance, please stop by your local BB&T financial center and schedule an appointment to speak with an Investment Counselor. 25 BB&T7

ACCESSING YOUR RETIREMENT ACCOUNT We make it easy to monitor your savings. Our goal is to provide convenient access to your plan account at all times by phone or through the Internet. With either, you can check your plan balance, change your investment elections or your PIN code, and request detailed information at your convenience 24 hours a day. During normal business hours, you can call the interactive phone system at 1-800-228-8076, press 0, then # to speak with one of our friendly, helpful representatives. Access your account online with BB&T PlanTrac at BBT.com/PlanTrac. MOVING FORWARD WITH PEACE OF MIND We re available if you have questions. We encourage you to call one of our service representatives at any time for answers to questions or assistance with actions you wish to take. Just call the interactive phone system at 1-800-228-8076, press 0 and then the # key. Our representatives are available during normal business hours. 26

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Federated Treasury Obligations Fund (I) Morningstar: Category Money Market Taxable The Fund seeks to provide current income consistent with stability of principal. The Fund invests primarily in a portfolio of short-term U.S. Treasury securities. These investments include repurchase agreements collateralized fully by U.S. Treasury securities. Characteristics Asset Class... Cash/Stable Value Ticker... TOIXX Fund Inception... 02/23/1990 Share Class Inception... 02/23/1990 Fund Manager... Management Team Manager Tenure (yrs.)... 5.75 Management Style... Active Turnover (%)... NA Total Net Assets ($mil.)... 22898.65 7-day Yield (%)... 0.01 Largest Holdings (01/31/2012) Interest In $3,700,000,000 Joint Repurch... 13.61% United States Treasury Notes 0.875%-4.62... 12.03% Interest In $5,000,000,000 Joint Repurch... 11.85% Interest In $2,250,000,000 Joint Repurch... 7.72% United States Treasury Notes 1.000%-4.50... 4.83% Interest In $1,250,000,000 Joint Repurch... 4.41% Interest In $1,100,000,000 Joint Repurch... 3.47% Interest In $1,000,000,000 Joint Repurch... 3.43% Interest In $750,000,000 Joint Repurchas... 2.57% Interest In $4,000,000,000 Joint Repurch... 2.50% Fund investments change daily and may differ. Asset Allocation (01/31/2012) Cash... 98.85% Foreign Bond... 0.84% Other... 0.31% Risk/Return Metrics Standard Deviation... NA Beta... NA R-squared... NA Sharpe Ratio... -5.84 Fee Summary Gross Expense Ratio... 0.53% Net Expense Ratio... 0.20% Management Fee... 0.20% 12b-1 Fee... NA Other Expenses... 0.33% Redemption Fee... NA Performance at NAV (06/30/2012) Total Return Annualized Total Return 3-Month 1-Year 3-Year 5-Year 10-Year Fund 0.00% 0.01% 0.02% 0.80% 1.72% Benchmark* 0.02% 0.03% 0.08% 0.76% 1.69% Standard deviation is a measure of the volatility of an investment s returns. The greater the standard deviation, the larger the differences between the investment s actual returns and average return. Beta measures a fund s volatility relative to its market. A positive beta indicates movement in the same direction of the market. A negative beta indicates movement inverse to the market. R-squared is a measure of how closely an investment s performance correlates with the performance of its market and, thus, may be explained by the market s performance. Sharpe Ratio measures reward per unit of risk. The higher the Sharpe Ratio, the better the fund s historical risk-adjusted performance. The gross expense ratio does not reflect any fee waivers or reimbursements that may be in effect. The net expense ratio reflects the expenses currently being charged by the fund after taking into account any applicable waivers or reimbursements, without which performance would have been less. Calendar Year Returns 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Fund 1.68% 1.00% 1.14% 3.01% 4.85% 4.83% 1.63% 0.10% 0.02% 0.01% Benchmark* 1.65% 1.02% 1.17% 2.94% 4.76% 4.51% 1.50% 0.11% 0.13% 0.03% *The Morningstar Cash Index includes Treasury bills with six to eight weeks until maturity. You cannot invest in an index. Performance quoted represents past performance and cannot guarantee future results. Current performance may be lower or higher than the performance shown. Investment return and principal value will fluctuate. An investor s shares, when redeemed, may be worth more or less than their original purchase price. Performance includes the reinvestment of dividends and capital gains. Investments in money market funds are not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although money market funds seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in a money market fund. The 7-day yield more closely reflects the Fund s current earnings than the quotation of total return. Investors may obtain performance current to the most recent month end at federatedinvestors.com. Fees listed above are maximum fees. Some fees may not be charged to plan participants. The management fee is the cost of the day-to-day operation and management of the fund. The 12b-1 fee covers the cost of distributing fund shares to investors, including advertising and sales costs. The redemption fee is charged when shares are sold before the minimum holding period for those shares has passed. This material must be preceded or accompanied by a current prospectus for the fund which contains information about the fund s investment objectives, risks, fees, and expenses. A prospectus may be obtained at federatedinvestors.com. Investors should consider this information carefully before investing. This information was prepared by Newkirk Products, Inc. and is intended for distribution to retirement plans only. Copyright 2012 Morningstar, Inc. and Newkirk Products, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers or to Newkirk; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Newkirk nor Morningstar and its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. NOT FDIC INSURED - MAY LOSE VALUE - NO BANK GUARANTEE 29

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Sterling Capital Total Return Bond Fund (I) Morningstar: Category Intermediate-Term Bond 3-Year Performance Rating Average The Fund seeks a high level of current income and a competitive total return. The Fund normally invests primarily in a diversified portfolio of bonds, including: securities issued or guaranteed by the U.S. government, its agencies or instrumentalities, corporate bonds, and asset-backed, mortgage-backed, municipal, and convertible securities. Characteristics Bond Sectors (05/31/2012) Asset Class... Bond Agency Mortgage-Backed... 43.37% Ticker... BIBTX Corporate Bond... 25.25% Fund Inception... 12/01/1999 Non-Agency Mortgage-Backed... 8.20% Share Class Inception... 12/01/1999 Commercial Mortgage-Backed... 7.71% Fund Manager... Mark Montgomery Municipal Taxable... 5.79% Manager Tenure (yrs.)... 4.49 Municipal Tax-Exempt... 2.74% Management Style... Active Turnover (%)... 131.87 Asset-Backed... 2.20% Cash & Equivalents... 1.87% Total Net Assets ($mil.)... 548.96 Government... 1.49% 30-day Yield (%)... 2.75 Duration (yrs.)... NA Preferred Stock... 1.38% Fund investments change daily and may differ. Asset Allocation (05/31/2012) Domestic Bond... 94.44% Foreign Bond... 3.46% Preferreds... 1.40% Other... 0.54% Cash... 0.17% Risk/Return Metrics Standard Deviation... 3.20 Beta... 0.94 R-squared... 64.93 Sharpe Ratio... 2.56 Fee Summary Gross Expense Ratio (09/30/2011)... 0.59% Net Expense Ratio... 0.59% Management Fee... 0.37% 12b-1 Fee... NA Other Expenses... 0.22% Redemption Fee... NA Performance at NAV (06/30/2012) Total Return Annualized Total Return 3-Month 1-Year 3-Year 5-Year 10-Year Fund 1.85% 7.15% 8.54% 7.61% 6.24% Benchmark* 1.86% 7.38% 7.37% 7.38% 5.96% Standard deviation is a measure of the volatility of an investment s returns. The greater the standard deviation, the larger the differences between the investment s actual returns and average return. Beta measures a fund s volatility relative to its market. A positive beta indicates movement in the same direction of the market. A negative beta indicates movement inverse to the market. R-squared is a measure of how closely an investment s performance correlates with the performance of its market and, thus, may be explained by the market s performance. Sharpe Ratio measures reward per unit of risk. The higher the Sharpe Ratio, the better the fund s historical risk-adjusted performance. The gross expense ratio does not reflect any fee waivers or reimbursements that may be in effect. The net expense ratio reflects the expenses currently being charged by the fund after taking into account any applicable waivers or reimbursements, without which performance would have been less. Calendar Year Returns 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Fund 7.88% 7.01% 4.01% 1.80% 4.32% 6.31% 2.54% 11.70% 7.98% 6.73% Benchmark* 12.35% 4.63% 3.80% 0.89% 4.17% 8.51% 6.81% 4.56% 7.45% 8.02% *The Morningstar Intermediate US Govt./Corp. Bond Index is an unmanaged index of U.S. government and corporate bonds with maturities between four and seven years or longer. You cannot invest in an index. Bond funds contain interest rate risk, the risk of issuer default, and inflation risk. Performance quoted represents past performance and cannot guarantee future results. Current performance may be lower or higher than the performance shown. Investment return and principal value will fluctuate. An investor s shares, when redeemed, may be worth more or less than their original purchase price. Performance includes the reinvestment of dividends and capital gains. Investors may obtain performance current to the most recent month end at sterlingcapitalfunds.com. Fees listed above are maximum fees. Some fees may not be charged to plan participants. The management fee is the cost of the day-to-day operation and management of the fund. The 12b-1 fee covers the cost of distributing fund shares to investors, including advertising and sales costs. The redemption fee is charged when shares are sold before the minimum holding period for those shares has passed. This material must be preceded or accompanied by a current prospectus for the fund which contains information about the fund s investment objectives, risks, fees, and expenses. A prospectus may be obtained at sterlingcapitalfunds.com. Investors should consider this information carefully before investing. This information was prepared by Newkirk Products, Inc. and is intended for distribution to retirement plans only. Copyright 2012 Morningstar, Inc. and Newkirk Products, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers or to Newkirk; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Newkirk nor Morningstar and its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. NOT FDIC INSURED - MAY LOSE VALUE - NO BANK GUARANTEE 31

Sterling Capital Equity Income Fund (I) Morningstar: Category Large Value 3-Year Performance Rating Above Average The Fund seeks capital growth and current income. The Fund normally invests primarily in dividend-paying equity securities, particularly common stocks of companies with a history of increasing dividend rates. The Fund may also invest in U.S. traded common stocks of foreign companies, including American Depositary Receipts. Value Blend Growth Characteristics Largest Holdings (05/31/2012) Asset Allocation (05/31/2012) Asset Class... Stock Federated Treasury Obligations... 10.78% Domestic Stock... 66.96% Ticker... BEGIX Kinder Morgan Management... 4.13% Foreign Stock... 22.22% Fund Inception... 06/30/2004 Travelers Companies... 3.80% Cash... 10.83% Share Class Inception... 06/30/2004 Unilever PLC ADR... 3.75% Fund Manager... George Shipp PepsiCo... 3.73% Risk/Return Metrics Manager Tenure (yrs.)... 8.01 Baxter International... 3.68% Standard Deviation... 11.73 Management Style... Active Abbott Laboratories... 3.58% Beta... 0.70 Turnover (%)... 16.64 Novartis... 3.57% R-squared... 91.91 Total Net Assets ($mil.)... 1072.02 Rogers Communications... 3.56% Sharpe Ratio... 1.33 Avg. Market Cap ($mil.)... 41685.96 Target... 3.54% No. of Securities... 40 Fund investments change daily and may differ. Large Mid Small Market Cap Fee Summary Gross Expense Ratio (09/30/2011)... 0.96% Net Expense Ratio... 0.96% Management Fee... 0.70% 12b-1 Fee... NA Other Expenses... 0.26% Redemption Fee... NA Performance at NAV (06/30/2012) Total Return Annualized Total Return 3-Month 1-Year 3-Year 5-Year Since Inception Fund -1.72% 6.92% 16.11% 3.85% 9.46% Benchmark* -1.61% 1.58% 13.87% -3.60% NA Standard deviation is a measure of the volatility of an investment s returns. The greater the standard deviation, the larger the differences between the investment s actual returns and average return. Beta measures a fund s volatility relative to its market. A positive beta indicates movement in the same direction of the market. A negative beta indicates movement inverse to the market. R-squared is a measure of how closely an investment s performance correlates with the performance of its market and, thus, may be explained by the market s performance. Sharpe Ratio measures reward per unit of risk. The higher the Sharpe Ratio, the better the fund s historical risk-adjusted performance. The gross expense ratio does not reflect any fee waivers or reimbursements that may be in effect. The net expense ratio reflects the expenses currently being charged by the fund after taking into account any applicable waivers or reimbursements, without which performance would have been less. Calendar Year Returns 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Fund NA NA NA 11.01% 22.18% 9.82% -25.73% 23.29% 16.34% 8.19% Benchmark* -15.05% 26.26% 14.05% 7.05% 25.78% -0.43% -36.11% 11.38% 14.69% 2.23% *The Morningstar Large Cap Value Index is an unmanaged index of large-cap stocks with relatively low prices given anticipated earnings potential. You cannot invest in an index. Performance quoted represents past performance and cannot guarantee future results. Current performance may be lower or higher than the performance shown. Investment return and principal value will fluctuate. An investor s shares, when redeemed, may be worth more or less than their original purchase price. Performance includes the reinvestment of dividends and capital gains. Investors may obtain performance current to the most recent month end at sterlingcapitalfunds.com. Fees listed above are maximum fees. Some fees may not be charged to plan participants. The management fee is the cost of the day-to-day operation and management of the fund. The 12b-1 fee covers the cost of distributing fund shares to investors, including advertising and sales costs. The redemption fee is charged when shares are sold before the minimum holding period for those shares has passed. This material must be preceded or accompanied by a current prospectus for the fund which contains information about the fund s investment objectives, risks, fees, and expenses. A prospectus may be obtained at sterlingcapitalfunds.com. Investors should consider this information carefully before investing. This information was prepared by Newkirk Products, Inc. and is intended for distribution to retirement plans only. Copyright 2012 Morningstar, Inc. and Newkirk Products, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers or to Newkirk; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Newkirk nor Morningstar and its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. NOT FDIC INSURED - MAY LOSE VALUE - NO BANK GUARANTEE 32

Sterling Capital Select Equity Fund (I) Morningstar: Category Large Blend 3-Year Performance Rating Average The Fund seeks capital growth, current income or both. The Fund normally invests primarily in equity securities of domestically traded U.S. and foreign large-cap companies similar in size to those included in the S&P 500 Index. The Fund selects stocks believed to be undervalued and/or have favorable growth potential. Value Blend Growth Characteristics Largest Holdings (05/31/2012) Asset Allocation (05/31/2012) Asset Class... Stock Apple... 4.67% Domestic Stock... 92.11% Ticker... BBISX Microsoft... 3.19% Foreign Stock... 6.70% Fund Inception... 10/09/1992 Exxon Mobil Corporation... 3.07% Cash... 1.19% Share Class Inception... 10/09/1992 General Electric... 2.97% Fund Manager... Stephen Morgan UnitedHealth Group... 2.40% Risk/Return Metrics Manager Tenure (yrs.)... 2.58 Schlumberger NV... 2.39% Standard Deviation... 17.47 Management Style... Active AT&T... 2.35% Beta... 1.07 Turnover (%)... 66.29 Walt Disney Co... 2.33% R-squared... 97.76 Total Net Assets ($mil.)... 210.28 St Jude Medical... 2.28% Sharpe Ratio... 0.80 Avg. Market Cap ($mil.)... 73676.94 Google... 2.24% No. of Securities... 62 Fund investments change daily and may differ. Large Mid Small Market Cap Fee Summary Gross Expense Ratio (09/30/2011)... 0.83% Net Expense Ratio... 0.83% Management Fee... 0.70% 12b-1 Fee... NA Other Expenses... 0.13% Redemption Fee... NA Performance at NAV (06/30/2012) Total Return Annualized Total Return 3-Month 1-Year 3-Year 5-Year 10-Year Fund -3.04% 2.34% 13.27% -4.73% 2.75% Benchmark* -2.55% 6.56% 15.71% 0.34% 5.18% Standard deviation is a measure of the volatility of an investment s returns. The greater the standard deviation, the larger the differences between the investment s actual returns and average return. Beta measures a fund s volatility relative to its market. A positive beta indicates movement in the same direction of the market. A negative beta indicates movement inverse to the market. R-squared is a measure of how closely an investment s performance correlates with the performance of its market and, thus, may be explained by the market s performance. Sharpe Ratio measures reward per unit of risk. The higher the Sharpe Ratio, the better the fund s historical risk-adjusted performance. The gross expense ratio does not reflect any fee waivers or reimbursements that may be in effect. The net expense ratio reflects the expenses currently being charged by the fund after taking into account any applicable waivers or reimbursements, without which performance would have been less. Calendar Year Returns 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Fund -19.53% 24.02% 12.56% 7.71% 21.46% -5.97% -37.14% 19.35% 11.69% -3.73% Benchmark* -23.47% 27.04% 9.54% 4.87% 15.91% 6.69% -36.21% 24.76% 13.44% 2.61% *The Morningstar Large Cap Index is an unmanaged index of U.S. large-cap stocks. You cannot invest in an index. Performance quoted represents past performance and cannot guarantee future results. Current performance may be lower or higher than the performance shown. Investment return and principal value will fluctuate. An investor s shares, when redeemed, may be worth more or less than their original purchase price. Performance includes the reinvestment of dividends and capital gains. Investors may obtain performance current to the most recent month end at sterlingcapitalfunds.com. Fees listed above are maximum fees. Some fees may not be charged to plan participants. The management fee is the cost of the day-to-day operation and management of the fund. The 12b-1 fee covers the cost of distributing fund shares to investors, including advertising and sales costs. The redemption fee is charged when shares are sold before the minimum holding period for those shares has passed. This material must be preceded or accompanied by a current prospectus for the fund which contains information about the fund s investment objectives, risks, fees, and expenses. A prospectus may be obtained at sterlingcapitalfunds.com. Investors should consider this information carefully before investing. This information was prepared by Newkirk Products, Inc. and is intended for distribution to retirement plans only. Copyright 2012 Morningstar, Inc. and Newkirk Products, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers or to Newkirk; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Newkirk nor Morningstar and its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. NOT FDIC INSURED - MAY LOSE VALUE - NO BANK GUARANTEE 33

Vanguard Institutional Index Fund (I) Morningstar: Category Large Blend 3-Year Performance Rating Above Average The Fund seeks to track the performance of the Standard & Poor s 500 Index, a widely recognized benchmark of U.S. stock market performance, dominated by stocks of large U.S. companies. The Fund invests all, or substantially all, of its assets in the stocks that make up the Index in approximately the same proportion as its weighting in the Index. Value Blend Growth Characteristics Largest Holdings (03/31/2012) Asset Allocation (03/31/2012) Asset Class... Stock Apple... 4.37% Domestic Stock... 99.53% Ticker... VINIX Exxon Mobil Corporation... 3.20% Cash... 0.37% Fund Inception... 07/31/1990 IBM... 1.89% Foreign Stock... 0.10% Share Class Inception... 07/31/1990 Microsoft... 1.88% Fund Manager... Donald Butler General Electric... 1.66% Risk/Return Metrics Manager Tenure (yrs.)... 11.50 Chevron... 1.66% Standard Deviation... 16.11 Management Style... Passive AT&T... 1.45% Beta... 1.00 Turnover (%)... 5.00 Procter & Gamble Co... 1.45% R-squared... 100.00 Total Net Assets ($mil.)... 109744.97 Johnson & Johnson... 1.42% Sharpe Ratio... 1.02 Avg. Market Cap ($mil.)... 55683.76 Wells Fargo & Co... 1.41% No. of Securities... 507 Fund investments change daily and may differ. Large Mid Small Market Cap Fee Summary Gross Expense Ratio (12/31/2011)... 0.04% Net Expense Ratio... 0.04% Management Fee... 0.04% 12b-1 Fee... NA Other Expenses... NA Redemption Fee... NA Performance at NAV (06/30/2012) Total Return Annualized Total Return 3-Month 1-Year 3-Year 5-Year 10-Year Fund -2.75% 5.43% 16.39% 0.25% 5.35% Benchmark* -2.55% 6.56% 15.71% 0.34% 5.18% Standard deviation is a measure of the volatility of an investment s returns. The greater the standard deviation, the larger the differences between the investment s actual returns and average return. Beta measures a fund s volatility relative to its market. A positive beta indicates movement in the same direction of the market. A negative beta indicates movement inverse to the market. R-squared is a measure of how closely an investment s performance correlates with the performance of its market and, thus, may be explained by the market s performance. Sharpe Ratio measures reward per unit of risk. The higher the Sharpe Ratio, the better the fund s historical risk-adjusted performance. The gross expense ratio does not reflect any fee waivers or reimbursements that may be in effect. The net expense ratio reflects the expenses currently being charged by the fund after taking into account any applicable waivers or reimbursements, without which performance would have been less. Calendar Year Returns 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Fund -22.03% 28.66% 10.86% 4.91% 15.78% 5.47% -36.95% 26.63% 15.05% 2.09% Benchmark* -23.47% 27.04% 9.54% 4.87% 15.91% 6.69% -36.21% 24.76% 13.44% 2.61% *The Morningstar Large Cap Index is an unmanaged index of U.S. large-cap stocks. You cannot invest in an index. Performance quoted represents past performance and cannot guarantee future results. Current performance may be lower or higher than the performance shown. Investment return and principal value will fluctuate. An investor s shares, when redeemed, may be worth more or less than their original purchase price. Performance includes the reinvestment of dividends and capital gains. Investors may obtain performance current to the most recent month end at vanguard.com. Fees listed above are maximum fees. Some fees may not be charged to plan participants. The management fee is the cost of the day-to-day operation and management of the fund. The 12b-1 fee covers the cost of distributing fund shares to investors, including advertising and sales costs. The redemption fee is charged when shares are sold before the minimum holding period for those shares has passed. This material must be preceded or accompanied by a current prospectus for the fund which contains information about the fund s investment objectives, risks, fees, and expenses. A prospectus may be obtained at vanguard.com. Investors should consider this information carefully before investing. This information was prepared by Newkirk Products, Inc. and is intended for distribution to retirement plans only. Copyright 2012 Morningstar, Inc. and Newkirk Products, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers or to Newkirk; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Newkirk nor Morningstar and its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. NOT FDIC INSURED - MAY LOSE VALUE - NO BANK GUARANTEE 34

Fidelity Contrafund Morningstar: Category Large Growth 3-Year Performance Rating Above Average The Fund seeks capital appreciation. The Fund normally invests primarily in common stocks of domestic and foreign companies, investing in either "growth" stocks or "value" stocks or both, whose value is believed to not be fully recognized by the public. Value Blend Growth Large Mid Small Market Cap Characteristics Asset Class... Stock Ticker... FCNTX Fund Inception... 05/17/1967 Share Class Inception... 05/17/1967 Fund Manager... William Danoff Manager Tenure (yrs.)... 21.80 Management Style... Active Turnover (%)... 55.00 Total Net Assets ($mil.)... 81266.07 Avg. Market Cap ($mil.)... 43183.59 No. of Securities... 366 Fee Summary Gross Expense Ratio (12/31/2011)... 0.81% Net Expense Ratio... 0.81% Management Fee... 0.63% 12b-1 Fee... NA Other Expenses... 0.18% Redemption Fee... NA Performance at NAV (06/30/2012) Total Return Largest Holdings (05/31/2012) Apple... 9.34% Google... 4.47% Berkshire Hathaway... 3.17% Coca-Cola... 2.68% McDonald s... 2.62% Wells Fargo & Co... 2.30% Walt Disney Co... 2.09% TJX Companies... 1.97% Noble Energy... 1.85% Colgate-Palmolive... 1.51% Fund investments change daily and may differ. Annualized Total Return 3-Month 1-Year 3-Year 5-Year 10-Year Fund -3.52% 6.11% 16.56% 2.93% 8.17% Benchmark* -3.82% 9.82% 17.26% 2.49% 4.72% Asset Allocation (05/31/2012) Domestic Stock... 82.80% Foreign Stock... 10.41% Cash... 6.55% Domestic Bond... 0.10% Foreign Bond... 0.07% Preferreds... 0.06% Risk/Return Metrics Standard Deviation... 14.91 Beta... 0.89 R-squared... 92.68 Sharpe Ratio... 1.10 Standard deviation is a measure of the volatility of an investment s returns. The greater the standard deviation, the larger the differences between the investment s actual returns and average return. Beta measures a fund s volatility relative to its market. A positive beta indicates movement in the same direction of the market. A negative beta indicates movement inverse to the market. R-squared is a measure of how closely an investment s performance correlates with the performance of its market and, thus, may be explained by the market s performance. Sharpe Ratio measures reward per unit of risk. The higher the Sharpe Ratio, the better the fund s historical risk-adjusted performance. The gross expense ratio does not reflect any fee waivers or reimbursements that may be in effect. The net expense ratio reflects the expenses currently being charged by the fund after taking into account any applicable waivers or reimbursements, without which performance would have been less. Calendar Year Returns 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Fund -9.63% 27.95% 15.07% 16.23% 11.54% 19.78% -37.16% 29.23% 16.93% -0.14% Benchmark* -33.15% 30.65% 0.19% 3.43% 5.68% 12.34% -41.87% 44.37% 12.91% 1.56% *The Morningstar Large Cap Growth Index is an unmanaged index of large-cap stocks with earnings that are expected to grow faster than the market average. You cannot invest in an index. Performance quoted represents past performance and cannot guarantee future results. Current performance may be lower or higher than the performance shown. Investment return and principal value will fluctuate. An investor s shares, when redeemed, may be worth more or less than their original purchase price. Performance includes the reinvestment of dividends and capital gains. Investors may obtain performance current to the most recent month end at fidelity.com. Fees listed above are maximum fees. Some fees may not be charged to plan participants. The management fee is the cost of the day-to-day operation and management of the fund. The 12b-1 fee covers the cost of distributing fund shares to investors, including advertising and sales costs. The redemption fee is charged when shares are sold before the minimum holding period for those shares has passed. This material must be preceded or accompanied by a current prospectus for the fund which contains information about the fund s investment objectives, risks, fees, and expenses. A prospectus may be obtained at fidelity.com. Investors should consider this information carefully before investing. This information was prepared by Newkirk Products, Inc. and is intended for distribution to retirement plans only. Copyright 2012 Morningstar, Inc. and Newkirk Products, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers or to Newkirk; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Newkirk nor Morningstar and its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results. NOT FDIC INSURED - MAY LOSE VALUE - NO BANK GUARANTEE 35