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Batterymarch believes that its "corporate control" strategy which attempts to identify stocks of companies whose managements have the capacity to take steps to enhance shareholder values will continue to produce the above-average returns experienced during the twelve-month period ended September 30, 1987 when the initial shock of the October decline passes. In addition, Batterymarch will continue to emphasize stocks of companies which are expected to benefit from the ongoing globalization of markets. These strategies are currently giving Batterymarch portfolios a heavy emphasis on cyclical industrial companies which generally are benefitting from a lower dollar and on relatively small capitalization stocks which appear cheap after being out of favor for the better part of four years.

The Chairman asked Mr. Ullman what Batterymarch's posture would be should the economy worsen. Mr. Ullman answered that Batterymarch's philosophy to remain fully invested will not change. It is up to the client to mandate changes in asset allocation. The client must determine the amounts invested in equities or fixed income and their own need for funds to be used for non-investment purposes. Mr. McHenry thanked Mr. Ullman.

Mr. Jeremy Biggs and Mrs. Anne Tatlock represented Fiduciary Trust. Mr. Biggs stated that the 1980's have been an unusual time for financial markets. Fiduciary continues to aim at a 10%+ total return. The portfolio is presently at approximately the same level (market value) as it was a year ago, having gained 37.24% year-to-year but lost two-thirds of that from September 30 to November 10. Mr. Biggs looks for a risk avoidance approach over the next five years.

Mrs. Tatlock pointed out that Fiduciary's cash position has increased substantially over the last year - presently a 60%/40% ratio versus an 83%/17% ratio as of September 30, 1986. The increased cash holdings include foreign currency bonds, which offer an attractive current return as well as potential for both principal and currency appreciation. The equity diversification embraces companies which are beneficiaries of a weaker dollar as well as companies which should experience favorable growth in a weaker and more competitive economic environment. During the past year Fiduciary has reduced holdings in Financial Stocks, Utilities and Drugs and increased Energy holdings.

Mr. Biggs stated that he foresees a very competitive, slow economic environment - possibly a recession - with a correspondingly substantial further decline in the market; this would not significantly alter Fiduciary's investment philosophy or strategies. The Chairman thanked Mr. Biggs and Mrs. Tatlock and commented favorably on Fiduciary's performance given current circumstances.

Mr. McHenry then asked the Committee to vote on whether or not to allow MAS to move its low P/E stocks into shares of the new Select Value Fund. It was noted that the amount involved was less than 10% of the total portfolio. After a brief discussion, the Committee voted unanimously in favor of letting MAS utilize its new fund in keeping with its investment philosophy. The Treasurer will officially notify MAS of the Committee's decision. The Treasurer noted that with the concurrence of the Chairman