Paragon Capital Management's Equity Performance Composite was initially created on December 31, 2005 and has been updated to reflect our 2007 results.

This composite reflects all current and past discretionary clients of Paragon Capital Management from December 2005 to December 2007. Our results from inception until December 2005 excluded the results of all clients that had left the firm. This was because prior to 2001, several accounts (who were no longer working with Paragon) were mistakenly eliminated from our portfolio database. Paragon estimates that its annual client turnover (the average annual rate of lost client relationships based on the firm's total client count at the end of a year) has been 4.6% per year dating back to 1993. Several corporations have used Paragon Capital Management to provide executive financial counseling services to their senior executives. Many of our terminated client relationships were a result of our services no longer being offered as a corporate benefit with their employer. Accordingly, the vast majority of our terminated accounts had very low levels of assets under our direct management. Paragon does not believe that the inclusion of the terminated accounts would have a material impact on the firm's equity performance results because all accounts are managed in a similar fashion with similar securities. And, historically, our dispersion has been low and declining since inception.

The primary equity benchmark is comprised of (75% Wilshire and 25% Morgan Stanley EAFE). The secondary benchmark is the S&P 500 index (dividends reinvested). Paragon started using the primary benchmark across its client portfolios in June 2001. These benchmarks are used for comparison purposes only.

Paragon Capital Management typically manages client accounts in a balanced manner; this includes investments in various cash, bond, equity, and alternative asset classes. The performance composite details the equity performance component of our current clients and their associated managed equity holdings. The performance presentation reflects those securities that Paragon recommends for inclusion in client portfolios. The client equity composite includes individual stocks, mutual funds and bundled fee accounts.

Our performance presentation details the firm's total assets under management as well as the managed equity positions of our current clients. All unmanaged assets are excluded from the firm's total asset and equity composite. Because equities are part of a balanced portfolio, there is no procedure for allocating cash to equities. Therefore, cash holdings are omitted from the performance calculations. However, accounts do hold cash from time to time that is allocated to equities. The inclusion of a cash allocation to the equity component would generally reduce equity returns.

Paragon Capital Management Equity Performance results are presented before taxes. Returns are stated in U.S. Dollars. The equity composite does not include leverage or the use of derivatives.

Performance is presented net of Paragon's fees and all other associated management fees and commissions. Paragon's results reflect the highest possible equity fee that could be charged to a client account (Paragon charges 1.0% annually on the first $1.0 million of equity assets managed). Paragon's equity management fee declines on a sliding scale based on the assets under management. Since the average client has an equity portfolio of nearly $2.0 million, the average equity based fee is approximately .75% per year.

The results include the partial reinvestment of income. Paragon's past performance is not indicative of our future results. The firm maintains a complete list and description of composites and additional disclosures, which are available upon request. An outside third party has not audited our performance composite.