EXECUTIVE SUMMARY QUESTIONS AND ANSWERS AND INVESTMENT CHOICES

EXECUTIVE SUMMARY QUESTIONS AND ANSWERS AND INVESTMENT CHOICES PLAN YEAR 2014 EXECUTIVE SUMMARY This summary provides a brief overview of the plan provisions for the ACE USA Plan. This information describes certain key features of the plan but does not provide detailed information. While we have made every attempt to assure the accuracy of the information contained in this document, the actual plan document controls. This information does not imply a contract of employment, nor does it guarantee the continuation of this officer program. ACE reserves the right to change or amend its plans at any time. Introduction ACE is pleased to offer you this opportunity to enroll in the ACE USA Plan for the plan year 2014. This plan is offered to a select group of officers, management, and other highly compensated employees. The plan provides an opportunity to defer salary and/or bonus payments on a pretax basis to assist you in accumulating assets for planned events during your working life and at retirement. Purpose The ACE USA Plan is designed to allow you to defer compensation on a pretax basis. Contributions to the plan are eligible to receive tax-deferred earnings (with the exception of employment taxes, Social Security, and Medicare). For example, if you defer $10,000 in the ACE USA Officer Deferred Plan, your taxable income is reduced by $10,000. In addition, you have $10,000 in your deferred compensation account on which tax-deferred earnings can accumulate, based on market fluctuation. WHY DEFER COMPENSATION? Pretax Investment After-Tax Investment* $10,000 in Income $10,000 in Income -0 in Tax 3,500 in Tax $10,000 to Invest $6,500 to Invest *Based on a 35% tax rate. Type of Plan The ACE USA Plan is a non-qualified plan. It is not subject to IRC limitations and most ERISA requirements. It is, however, subject to the administration and enforcement provisions of, and certain reporting rules under, ERISA. Eligibility A select group of officers, management, and other highly compensated employees selected by the committee to participate in the plan are eligible. Deferral Option Deferral elections are made once each year with respect to any eligible compensation. Eligible compensation includes base salary or annual incentive bonus. You can choose to participate on a plan-year to plan-year basis. Each year s annual deferral amount must remain in the plan for a minimum period of two (2) years following the year of deferral or until the earlier of retirement, termination of employment, or death. All deferral elections are irrevocable, unless you petition the committee in writing to approve a change to your deferral election. The American Jobs Creation Act of 2004 includes provisions affecting non-qualified deferred compensation plans. As such, amounts deferred into the ACE USA Plan were affected beginning in 2005. However, all compensation deferred into the Plan prior to December 31, 2004, including earnings on such amounts until the final distribution of your account, will be grandfathered (i.e., any pre-2005 amounts will be subject to all the pre-2005 provisions of the Plan). See the legislative notice, which is posted on the Lockton Web site for more specific information on the legislative guidelines. On an annual basis, you may defer up to 50% of base salary and/or 100% of annual incentive bonus. Wages subject to FICA tax include those deferred under non-qualified deferred compensation plans. Therefore, Social Security and Medicare taxes will be withheld on your annual deferral amounts each payroll period. 1

Deferral Considerations As noted previously, this plan is not subject to ERISA and is not a qualified retirement plan for tax purposes. As such, this plan does not provide the same level of protection that is provided in a qualified retirement plan and therefore may not be appropriate for everyone. You may want to discuss the particulars of the plan with your financial adviser to determine if this benefit is suitable for your overall financial plan. Before you make your decision to participate in the ACE USA Plan, you should first consider maximizing your contributions to the ACE USA Employee Retirement Savings Plan (i.e., elect to contribute at least 10%, the maximum deferral rate permitted if you are a highly compensated employee ). Then, you can determine how best to use the ACE USA Plan to supplement your in-service and/or retirement planning needs. Although these plans are different, both plans offer you the opportunity to save on a pretax basis with potential tax-deferred growth. Distributions You can elect to receive a distribution from the plan: Following your termination of employment (the earlier of retirement, termination of employment, or death) in a lump sum or over five (5), ten (10), or fifteen (15) years. The payment or commencement of your payment will begin in January following the termination event. For in-service savings needs, at a date you specify prior to termination of employment that is at least two (2) plan years after the plan year in which the annual deferral amount is actually deferred. (For example, when your child is expected to attend college.) Your in-service payment will be paid in a lump sum in January of the year specified. For example: You elect to receive an in-service payment from your plan year 2014 annual deferral amount. Earnings You have the ability to select among various investment choices to potentially accrue earnings on a tax-deferred basis under the plan. These investment choices are identified on the next page as plan Measurement Funds. If you enroll in the ACE USA Plan, you must select from the available list of Measurement Funds during online enrollment. You can also find updated fund performance and detailed information regarding each investment option on the Lockton Website at www.benefitplanservices.com/lockton. January 1, 2014 through December 31, 2014 January 1, 2015 through December 31, 2015 January 1, 2016 through December 31, 2016 January 1, 2017 Plan year in which the annual deferral amount is actually deferred. One (1) plan year after the plan year in which the annual deferral amount is actually deferred. Two (2) plan years after the plan year in which the annual deferral amount is actually deferred. Earliest date to elect to receive an in-service payout. In order to participate in the plan for 2014, you must complete the enrollment process no later than December 16, 2013. If you become eligible after the annual enrollment period, you have 30 days from your eligibility date to complete the enrollment process. Trust In conjunction with the plan, ACE has established a grantor trust ( Trust ) to provide the company with a source of funds for the benefits payable under the plan. The assets in the Trust are available to provide benefits under the plan if the company does not pay your benefits for any reason other than bankruptcy or insolvency of the company. At the present time, ACE directs the trustee of the Trust to purchase mutual funds and life insurance as vehicles to fund the Trust. Note that the mutual funds and insurance contracts are assets belonging to the Trust, with all rights and benefits inuring to the company. All assets of the Trust are available to general creditors of the company. You are an unsecured general creditor of the company with respect to your interest in this plan. The plan also allows a one-time re-deferral so that you can postpone an in-service payout that is scheduled to be paid to you. The re-deferral election must be made at least one (1) full plan year prior to the plan year the in-service payout is scheduled to be paid, and the in-service payout must be re-deferred for a minimum of five (5) years (three (3) years for grandfathered monies) from the previously elected in-service payout date. In addition, if you retire or otherwise incur a termination of employment before the specified in-service payout date, the date of receipt of your account is governed by the termination of employment provisions of the plan. Unplanned withdrawals for grandfathered amounts are available but are subject to substantial penalty unless made due to an unforeseeable emergency. Company Matching Contributions ACE will contribute any matching contribution due to a missed opportunity in the Supplemental and Officers Deferral Plan annually. The matching contribution will be credited to your deferral account for the previous plan year in January of each year. The missed opportunity match is due to IRS limits in place for qualified plan contributions. If your matching contribution is capped due to IRS limits the shortfall will be made up to you with a contribution to the Officers or Supplemental plan. Vesting Any company matching contributions contributed to your account will vest in the same manner as your qualified plan. 2

Measurement Funds The ACE USA Plan will provide participants with an opportunity to direct their deferral contributions to the following Measurement Funds. Fund Class Intermediate Bond Long-Term Governments Measurement Fund PIMCO VIT Total Return Portfolio PIMCO VIT Real Return Portfolio Mid-Cap Growth Large Value International Equity Large Blend/Growth Short-Term Bond Large Growth Large Blend Money Market Money Market Small Growth Portfolio Small Value International Small Value Mid-Cap Value T. Rowe Price Mid-Cap Growth Portfolio T. Rowe Price Equity Income Portfolio T. Rowe Price International Stock Portfolio T. Rowe Price Blue Chip Growth Portfolio T. Rowe Price Limited-Term Bond Portfolio Vanguard Variable Insurance Fund Capital Growth Portfolio Vanguard Variable Insurance Fund Equity Index Portfolio Vanguard Variable Insurance Fund Money Market Portfolio T. Rowe Price U.S. Treasury Money Vanguard Variable Insurance Fund Small Company Growth Royce Capital Fund Micro-Cap Portfolio First Eagle Overseas Variable Fund Third Avenue Value Portfolio Please refer to the Investment choices section of this document for more specific information regarding each Measurement Fund. ACE is under no obligation to invest the deferred amounts in any specific asset. GENERAL QUESTIONS AND ANSWERS Plan Objectives Q: What is the purpose of the ACE USA Officer Deferred Eligibility Q: Who is eligible for the plan? Deferral of Taxes Q: What is the federal income tax effect of electing to defer eligible compensation? A: The ACE USA Plan is designed to allow you to defer current compensation on a pretax basis. Contributions to the ACE USA Officer Deferred Plan are eligible for tax-deferred earnings. Earnings on the contribution are also invested on a tax-deferred basis. A: Participation in the ACE USA Officer Deferred Plan is limited to a select group of officers, management, and other highercompensated employees selected by the committee to participate in the plan. A: Amounts you defer under the plan will not be taxed for federal income tax purposes in the year they would have otherwise been paid to you. In addition, earnings credited in accordance with the plan will not be taxed for federal income tax purposes in the year they are credited to your account. Rather, these amounts will be taxed when they are paid to you. You should confirm with your personal legal or tax adviser whether such deferral of taxes also applies to your state and local taxes. Q: If my deferrals are considered pretax deferrals, why are FICA taxes currently withheld? Q: How are my annual deferral amounts taxed when they are distributed to me? A: For the purpose of calculating FICA taxes, including Social Security and Medicare, your annual deferral amounts are considered earnings at the time they are earned, regardless of when paid. Thus, FICA tax must be withheld at the time your deferrals are credited to your account. However, no FICA will be withheld when distributions from your account are made. Earnings on the account, if applicable, are not subject to FICA. ACE will withhold, from that portion of your compensation that is not being deferred, your share of FICA and other employment taxes. A: Your annual deferral amounts and any applicable earnings accrued during the deferral period are taxed as ordinary income when they are distributed to you. Unlike qualified plans, special income tax averaging is not available. 3

Q: Will I owe state income tax on distributions from the plan? Contributions Q: What are the maximum and the minimum amounts of my current compensation that can be deferred into the ACE USA Q: Can I revoke my deferred compensation election for a given plan year Q: When do I make my contribution election? A: In general, you will owe state income tax on distributions. If the distribution is deemed to be for purposes of retirement (at least over a 10-year period) you will owe state income tax in the state you reside at the time the distributions are made. But if you receive a distribution over less than 10 years, you may be subject to owe tax in the state where you worked, even if you no longer reside there. You should consult with a tax adviser to help with this tax planning. A: For the 2014 plan year (January 1, 2014 through December 31, 2014), you may defer up to a maximum of 50% of your base salary and 100% of your annual incentive bonus. The minimum deferral amount per plan year is $2,000 from a combination of your base salary or annual incentive bonus. The percentage of base salary you elect to defer per plan year will be deducted from each biweekly paycheck. The percentage of annual Incentive bonus you elect to defer will be withheld at the same time such amounts are normally paid to you. A: Your deferral election into this plan is irrevocable for a given plan year and may not be changed after you have made it. However, in the event of an unforeseeable emergency, the committee may, upon written petition, permit you to change your deferral election. A: For the 2014 Plan Year, you must complete the enrollment process including making your deferral election(s) no later than December 16, 2013. If you become eligible after the annual enrollment period, you have 30 days from your eligibility date to complete the enrollment process. Distributions Q: Under what circumstances can I receive a distribution from my ACE USA Plan account? A: There are several alternatives under which you can receive a distribution from your deferred compensation account: In-service Payouts provide you with access to your annual deferral amounts in as little as two (2) years following the year of deferral if elected by you at the date of your deferral election. Hardship Withdrawals are available for certain unforeseeable emergencies, subject to approval by the committee. Unplanned Withdrawal Election (for grandfathered monies) occurs anytime a withdrawal is made before the date you previously elected without meeting the definition of an unforeseeable emergency. You may elect, at any time, to make a withdrawal of your pre-2005 contributions and earnings, less a 10% withdrawal penalty. You will also forfeit participation in the plan for one full plan year. Termination Benefit. Upon your termination of employment (the earlier of retirement, termination of employment, or death), you, or your beneficiary in the case of your death, will receive monies from your account in a lump sum or in annual payments over five (5), ten (10), or fifteen (15) years as a termination benefit. Your distribution alternatives are described in further detail in the following questions. Q: If I receive a distribution from the ACE USA Plan, can I roll the money over into another plan to avoid taxes? A: No. The ACE USA Plan is a non-qualified plan, and distributions may not be rolled over into a tax-qualified retirement plan or IRA. Q: If I defer compensation into the ACE USA Plan, will I lose part of my company contribution to the ACE USA Employee Retirement Savings You will be provided with the opportunity to make a new deferral election prior to January 1 of each subsequent plan year. A: No. ACE will make up any lost contributions you would have received in the ACE USA Employee Retirement Savings Plan. The missed contribution will be made to your ACE USA Officer Deferred Plan account, if applicable. Q: Can I receive a distribution from the plan in the event of an unforeseeable emergency? A: Yes, but the committee will require written documentation substantiating the financial hardship in order to make its final determination. An unforeseeable emergency (as defined in the plan document) is an unanticipated emergency that is caused by an event beyond your control, or the control of your beneficiary (if the amount is payable to a beneficiary), that would result in severe financial hardship to you, or your beneficiary (if the amount is payable to a beneficiary), if early withdrawal were not permitted. The determination of unforeseeable emergency shall be made in the sole discretion of the committee, based on such information as the committee shall deem to be necessary. 4

Q: Can I take a loan from my ACE USA Officer Deferred Plan account? Q: Can you tell me more about in-service payouts? Q: What if I find I don t need the money in the year it is scheduled to be paid can I postpone the payment of an upcoming in-service payout election? A: No, loans from this plan are not available. A: In-service payouts are available to help you meet shorter-term financial needs, such as helping to fund a child s college education, financing a home purchase, or for whatever other use you may have. This option allows you to elect each year to receive a distribution from the plan at some point at least two (2) plan years or longer in the future. You must choose the year of the distribution at the same time you make your annual deferral amount election. For example, if you elect to receive an in-service payout in five (5) years during this enrollment period, you would receive your 2014 annual deferral amount, plus earnings credited (earnings will be determined based on the pro-rata method for allocating earnings among your annual deferral amounts), as soon as practicable after January 1, 2020, five (5) complete plan years after your deferral is made). This is an annual election. Each year you may elect whether to receive an in-service payout from the upcoming year s annual deferral amount or leave that amount until your termination of employment. If you retire or otherwise incur a termination of employment before the specified in-service payout date, the date of receipt of your account is governed by the termination of employment provisions of the plan. A: Yes, the plan allows a one-time re-deferral so that you can postpone an in-service payout that is scheduled to be paid to you. The re-deferral election must be made at least one (1) full plan year prior to the plan year the in-service payout is scheduled to be paid (i.e., you can change your January 1, 2015, in-service payout if the re-deferral is made before January 1, 2014). This election is allowed only one time for amounts deferred for a particular plan year, and the in-service payout must be re-deferred for a minimum of five (5) years (three (3) years for grandfathered monies) more years from the previously elected in-service payout date. Q: What happens to my account if I terminate employment? Q: What happens in the event of my death? Q: What happens if I die after beginning to receive payments from the plan? Q: Whom can I name as beneficiary? Q: Is the survivor benefit payable under the plan taxable income to my beneficiary? Q: What if I become permanently and totally disabled? A: If you leave employment for any reason, a lump-sum payment shall be made, or installment payments shall commence, in January following the termination event. You elect to receive distributions from the plan in a lump sum or in annual installments over a period of five (5), ten (10), or fifteen (15) years at the time of your deferral election. Each year you will be able to change your termination benefit distribution election. You may change this election up to one (1) year before your actual termination of employment. However, each change you make delays your distribution commencement an additional five (5) years for non-grandfathered monies. A: The beneficiary you name will receive your account. The payments will be made in a lump sum that shall be made, no later than sixty (60) days after the last day of the plan year in which the committee is provided with proof that is satisfactory to the committee of your death. A: Your beneficiary will receive any unpaid amounts in a lump-sum. A: Subject to any applicable community property rights, you can name any individual, trust, estate, or other entity you wish. A: Yes. The survivor benefit payable to your beneficiary is taxable as ordinary income and, under certain circumstances, may be subject to estate taxes. Your tax adviser can provide you with more information on this topic. A: If you become permanently and totally disabled, you will be excused from fulfilling your annual deferral amount commitment for the plan year. During disability, you will not be allowed to make any additional deferral elections, but you will continue to be considered a participant for all other purposes of the plan. 5

Q: Will the payouts from the plan affect my Social Security benefits after I retire? Q: Why is there a ten percent (10%) penalty for exercising the withdrawal election? Q: Can I assign or dispose of my interest in the plan? Benefit Security Q: Will the company guarantee the payment of my account under all circumstances? Q: What happens to my account if the company is taken over or sold? A: Yes and no. Distributions made from the plan will not affect your Social Security benefits. For purposes of Social Security, these distributions are considered earned when they are credited to your account; therefore, they do not constitute income when they are distributed to you. However, because the distributions will be considered gross income for federal income tax purposes, they may have the effect of subjecting your Social Security benefits to federal income taxation. These issues should be discussed with your tax adviser. A: The unrestricted right to withdraw funds from your account (i.e., without substantial penalty) would create taxable income to you in the current year, even if you do not elect a withdrawal. This penalty is intended to satisfy the IRS and should prevent you being taxed on the value of your account before you actually receive it. This only applies to the grandfathered portion of your account balance. A: No. You cannot in any way sell, assign, encumber, transfer, or convey in advance of receipt any of your rights under the plan. In addition, your account is not subject to encumbrance by any individual or third party. A: ACE s obligation under the plan shall be that of an unsecured promise to pay money in the future. Nothing in the plan places any limitations on the company s ability to grant security interests on its assets that would have priority over unsecured obligations of the company. Amounts payable to a participant or his or her beneficiaries shall be paid from the general assets of the company exclusively; however, the company has established a Trust to increase the security of your non-qualified plan benefits. A: The above-mentioned Trust is specially designed so that assets are available to pay benefits to you in the event the company is unwilling or unable to pay your benefits for any reason other than bankruptcy or insolvency. Q: What happens to my account if the company goes into bankruptcy? Q: Can ACE amend or terminate the ACE USA Officer Deferred Plan Administration Q: Who administers the ACE USA Q: Who is Lockton Financial Advisors? Q: Where can I get more information about the ACE USA Officer Deferred A: The ACE USA Plan is not a funded plan within the meaning of the Internal Revenue Code and the Employee Retirement Income Security Act of 1974 (ERISA). As such, the benefits payable under this plan represent an unfunded and unsecured contractual obligation of the company, and benefits payable under the plan are paid out of the company s general assets. Nothing in the plan guarantees, and there is no assurance, that the company will remain credit-worthy and in a position to meet its obligations under the ACE USA Plan for the life of the plan. In the event that the company becomes insolvent or files for protection under the federal bankruptcy laws, your rights for the non-qualified benefits of the company. The assets in the Trust may be used by the bankruptcy court to satisfy any and all obligations of the company, not just the obligations relating to this plan. A: Yes. The plan document permits the committee to amend or terminate this plan at any time. However, any such action cannot cause you to forfeit any portion of your account prior to the date of such amendment or plan termination. A: A committee appointed by the ACE board of directors administers the plan. This committee has full power and authority to interpret the plan and to determine eligibility requirements for participation in the plan. Any determination made by the committee will be final and binding on all interested persons. A: Lockton Financial Advisors has been selected by the company as a plan consultant to assist with the plan administration and communication of the plan. Please contact Lockton with any questions about the Officers Deferral Plan. A: The plan document and other important information regarding the plan are available for your review on the Lockton Website at www.benefitplanservices.com/lockton. In addition, if you still have questions after reading the information in this packet, you may call an ACE USA Consultant at 1-800-340-8151 and identify yourself as an ACE employee. 6

INVESTMENT QUESTIONS AND ANSWERS Q: When do I make my initial investment choice election? A: If you are a newly eligible employee, you will make your initial investment choice election at the same time you complete your online enrollment process and make your base salary or annual incentive bonus deferral election for the 2014 plan year. These questions and answers provide a summary of the ACE USA Plan. For a complete description of plan provisions and benefits, please refer to the actual plan document. If any conflicts arise between this summary and the plan document, the plan document will control. INVESTMENT CHOICES Q: After selecting my investment choices, may I change them in the future? Q: Will I own shares of the investment choices select? Q: When are earnings on my investments credited to my account? Q: How often will I receive an account statement? You can change your investment allocation online at any time after the start of the plan year. You must complete the online enrollment process, including making your deferral elections no later than December 16, 2013, to participate in the plan for the 2014 plan year. If you become eligible after the annual enrollment period, you have 30 days from your eligibility date to complete the enrollment process. A: Yes. You may reallocate previously invested money among each of the available investment choices and change your investment allocation for any new deferrals credited to your account on a daily basis online. Your investment election will be effective as of the first business day following your election. A: No. As long as you have an account in the plan, you will be an unsecured general creditor of the company for the amount of your account. The value of your account is reflected on your account statements. Deferral amounts will be credited to your account no later than the close of business on the third business day after the day on which the compensation would otherwise have been paid. Each day thereafter, the value of your account will be determined based on the performance of the investment choices you have made. A: A separate bookkeeping account is set up on your behalf by the plan record keeper. The value of your account will change on a daily basis to reflect the investment performance of the investment choices you selected. The value of your account is subject to risk at all times, based upon the investment choices you select. A: Your quarterly benefit statements will be posted online to the website. You may download your statement at any time. If you would like to receive a hard copy of your statement sent to your home please contact Lockton. First Eagle Overseas Variable Fund Seeks long-term growth of capital. The fund will invest primarily in equities, including common and preferred stocks, warrants or other similar rights to purchase a company's securities, and convertible securities, issued by non-u.s. companies. It normally invests at least 80% of its total assets in foreign securities. The fund may invest in securities traded in mature markets and in countries whose economies are still developing. It may invest in any size company, including large, medium and smaller companies. The fund also may invest up to 20% of its total assets in debt instruments. PIMCO Real Return Seeks maximum real return, consistent with preservation of real capital and prudent investment management. The Portfolio normally invests at least 80% of its net assets in inflation-indexed bonds of varying maturities issued by the U.S. and non-u.s. governments, their agencies or instrumentalities and corporations, which may be represented by forwards or derivatives such as options, futures contracts or swap agreements. It invests primarily in investment grade securities, but may invest up to 10% of its total assets in high yield securities ('junk bonds') rated B or higher. The fund is non-diversified. PIMCO Total Return Seeks maximum total return, consistent with preservation of capital and prudent investment management. The portfolio normally invests at least 65% of its total assets in a diversified portfolio of Fixed Income Instruments of varying maturities, which may be represented by forwards or derivatives such as options, futures contracts, or swap agreements. It invests primarily in investment grade debt securities, but may invest up to 10% of its total assets in junk bonds rated B or higher. The Portfolio will normally limit its foreign currency exposure (from non-u.s. dollar denominated securities or currencies) to 20% of its total assets. Third Avenue Value Portfolio Seeks long-term capital appreciation. The fund seeks to achieve its objective mainly by acquiring common stocks of well-financed companies at a discount to what the Adviser believes is their intrinsic value. It may invest in foreign securities, some of which may be denominated in or tied to currencies of the countries in which they are primarily traded. The fund may invest in companies of any market capitalization. It may also invest up to 35% of its assets in debt securities rated BBB or below around the world and in companies of various market capitalizations. The fund is non-diversified. T. Rowe Price Blue Chip Growth Seeks to provide long-term capital growth, income is a secondary objective. The fund normally invests at least 80% of its net assets (including any borrowings for investment purposes) in the common stocks of large and medium-sized blue chip growth companies. It focuses on companies with leading market position, seasoned management, and strong financial fundamentals. The fund may invest in foreign stocks in keeping with the fund's objectives. It may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities. 7

T. Rowe Price Equity Income Seeks to provide substantial dividend income as well as long-term growth of capital through investments in the common stocks of established companies. The fund normally invests at least 80% of its net assets (including any borrowings for investment purposes) in common stocks, with 65% in the common stocks of well-established companies paying above-average dividends. It may invest in foreign stocks in keeping with the fund's objectives. The fund may sell securities for a variety of reasons, such as to secure gains, limit losses, or redeploy assets into more promising opportunities. T. Rowe Price International Stock Seeks long-term growth of capital through investments primarily in the common stocks of established, non-u.s. companies. The fund expects to invest substantially all of its assets in stocks outside the U.S. and to diversify broadly among developed and emerging countries throughout the world. It may purchase the stocks of companies of any size, but its focus will typically be on large-sized companies and, to a lesser extent, medium-sized companies. Normally, at least 80% of the fund's net assets (including any borrowings for investment purposes) will be invested in stocks. T. Rowe Price Limited-Term Bond Seeks a high level of income consistent with moderate fluctuations in principal value. The fund invests at least 80% of its net assets (including any borrowings for investment purposes) in bonds and 65% of total assets in short- and intermediate-term bonds. There are no maturity limitations on individual securities purchased, but the fund's average effective maturity will not exceed five years. At least 90% of the fund's portfolio will consist of investment-grade securities that have been rated in the four highest credit categories. T. Rowe Price Mid-Cap Growth Seeks long-term capital appreciation. The fund normally invests at least 80% of its net assets (including any borrowings for investment purposes) in a diversified portfolio of common stocks of mid-cap companies whose earnings T. Rowe Price expects to grow at a faster rate than the average company. It defines mid-cap companies as those whose market capitalization (number of share outstanding multiplied by share price) falls within the range of either the S&P MidCap 400 Index or the Russell Midcap Growth Index. The fund may invest in foreign stocks in keeping with the fund's objectives. Vanguard Capital Growth Seeks to provide long-term capital appreciation. The fund invests in stocks considered to have above-average earnings growth potential that is not reflected in their current market prices. The Portfolio consists predominantly of large- and mid-capitalization stocks. T. Rowe Price U.S. Treasury Money seeks to preserve your principal investment and offers current income. It invests primarily in short-term U.S. Treasury securities. An investment in this fund is not insured or guaranteed by the FDIC or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Royce Micro Cap Seeks long-term growth of capital. The fund invests its assets primarily in equity securities of micro-cap companies, a universe of more than 3,000 companies with market capitalizations up to $750 million. It generally focuses on micro-cap companies that it believes are trading significantly below its estimate of their current worth. The fund normally invests at least 80% of its net assets in the equity securities of micro-cap companies. Although the fund normally focuses on the securities of U.S. companies, it may invest up to 35% of its net assets in foreign securities. Vanguard Equity Index Seeks to track the performance of a benchmark index that measures the investment return of large-capitalization stocks. The Portfolio employs an indexing investment approach designed to track the performance of the Standard & Poor's 500 Index, a widely recognized benchmark of U.S. stock market performance that is dominated by the stocks of large U.S. companies. It attempts to replicate the target index by investing all, or substantially all, of its assets in the stocks that make up the index, holding each stock in approximately the same proportion as its weighting in the index. Vanguard Small Company Growth Seeks to provide long-term capital appreciation. Under normal circumstances the Portfolio invests at least 80% of its assets primarily in common stocks of small companies. These companies tend to be unseasoned but are considered by the Portfolio's advisors to have superior growth potential. Also, these companies often provide little or no dividend income. It uses multiple investment advisors. Vanguard Money Market Portfolio Seeks to provide current income while maintaining liquidity and a stable share price of $1. The fund invests primarily in high-quality, short-term money market instruments, including certificates of deposit, banker's acceptances, commercial paper, and other money market securities. It invests more than 25% of its assets in securities issued by companies in the financial services industry. The fund maintains a dollar-weighted average maturity of 60 days or less and a dollar-weighted average life of 120 days or less. 8