A performance verification has been completed for each of the following composites for the period January 1, 1992 through September 30, 2006 by independent auditors from the firm of Meisel Tuteur & Lewis, P.C. A copy of the auditor’s report is available upon request.
HGK has prepared and presented this report in compliance with the Performance Presentation Standards of the Association for Investment Management and Research,
( AIMR has not been involved with the preparation or review of this report): 1.) The presentation of total return uses accrual as opposed to cash basis accounting. 2.) Time-weighted rates of return are based on monthly valuation using geometric linking of period returns. 3.) Size-weighted composites using beginning-of-period values to weight portfolio returns are utilized. 4.) All actual, fee-paying, discretionary portfolios are included in one or more composites within the firm’s management. 5.) Presentation of annual returns at a minimum for all years. 6.) Inclusion of cash and cash equivalents in composite results.
In addition, 1.) A list of all composites is available. 2.) Performance has been in compliance since 1Q 1992 (prior periods utilized an equal weighted composite; this is the only difference). 3.) Balanced portfolio segments are included in single-asset composites.
4.) Performance results are calculated gross of fees. The average annual fee charged to institutional accounts is 0.5% for equities, 0.35% for fixed income securities, and 0.47%
for balanced funds. 5.) Leverage has not been utilized in portfolios in the composite.
6.) Valuation is based on trade date. 7.) No non-fee paying portfolios are included in composites. 8.) Portfolios are excluded whenever cash flows distort performance (Cash flows exceeding 10% of a portfolio’s market value.)

A. Fixed Income Core Pension Composite - Benchmark (Lehman Brothers Gov’t/Credit. Index)

B. Large Cap Value Equity Composite – (Russell 1000 Large Cap Value Index)

C. Mid Cap Value Equity Composite - (Russell Mid Cap Value Index)

D. Large Cap Core Value Equity Composite - (S&P 500)

E. Fixed Income A+ Intermediate Composite-(Lehman Brothers A+ Intermediate Gov/Credit Index)

F. Fixed Income Intermediate Composite - (Lehman Brothers Intermediate Gov’t/Credit Index)

G. Fixed Income Aggregate Composite - (Lehman Brothers Aggregate Index)

H. Fixed Income Short-Term Composite - (Merrill Lynch 1-3 Index)

I. International Equity Composite - (MSCI – EAFE) (US Dollars)

J. HGK Global Investment Product - (MSCI – World Index) (Hedged Local Currency)

K. All Cap Value - (Russell 3000 Value)

L. Small Cap Value - (Russell 2000 Value)

The following information describes the composites as of December 31, 2007.

Accounts that do not meet the criteria for the inclusion in the above composites are those which (i) do not meet the minimum size requirements of the composite (item (i) represents less than 1% of total assets), (ii) have guidelines which are significantly different than those of the other accounts in the composite or (iii) are not fully discretionary (items (ii) and (iii) represent approximately 4.2% of total assets).
Past results should not be considered indicative of future performance.

*FEES
The following example illustrates the effect of an advisory fee, compounded over a period of years, and the effect it could have on the total value of a portfolio:

Gross of Fees:
The HGK Large Cap Value Equity Returns, Years 2001-2007 are 2.40%, -22.30%, 35.60%, 14.60%, 10.98%, 23.14% and 7.20% respectively, and the 7 Year Annualized Rate of Return is 8.86%.

Net of Fees:
(Average equity portfolio fee of .50% annually): The HGK Large Cap Value Equity Returns, Years 2001-2007 are 1.92%, -22.71%, 35.00%, 14.06%, 10.46%, 22.58% and 6.67% respectively, and the 7 Year Annualized Rate of Return is 8.32%. As a result, the client’s return will be reduced by the advisory fee (and other expenses, i.e. custodial fees, it may incur in the management of the account). HGK’s fees are described in Part II of its
Form ADV.