401k info sheet - american financial network,...

401K

Information & Fact Sheet

Open Enrollment Dates:

Open Enrollment: You may sign up for the company 401K plan at any time!

Pre-Tax Information: This is a pre-tax policy that will be taken from your checks bi-monthly.

Contact Information:

Questions: For questions about your account, to find your account balance, etc. contact paychex

employee services. You can also contact Jessie Norton, 401K representative and financial advisor

for 401K.

Paychex Employee Services

Phone: 1-877-244-1771

Website: http://benefits.paychex.com

Jessie Norton

Phone: (949) 722-7324

Fax: (888) 825-6840

To Turn in Applications: Instead of turning in a paper application, you can go online to

https://benefits.paychex.com and enroll directly online. Please fill out a beneficiary form online as

well and give it to Debbie Sherman.

Danielle Abril

[email protected]

3110 Chino Ave. Suite 290

Chino Hills, CA 91709

Phone: (909)287-7176

Fax: (909)287-7013

Broker Series #3 - R Shares Guided Fund Select Enrollment Form

Enrollment Methods• Retirement Services Online Web site: https://benefits.paychex.com• Employee Services Information Line: 877-244-1771, retirement services option• Fill out this form and fax it to: 585-389-7252Note: By using either the Web site or Information Line, you do not need to send this form to Paychex, Inc.

Employee Information (All information is required)

Employee Name ______________________________________________ Social Security Number ____ ___ ______________________− −XXX XX

Company Name ______________________________________________ Office/Client Number __________________/________________American Financial Network Inc 0079 00793863

Date of Birth _______/______/_________ Date of Hire _________/______/_________ Phone Number (________)________________

E-mail Address | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

Enrollment (Check one box)If neither box is checked and a deferral field is filled in, you will be enrolled in the plan at the stated amount.❐ Yes, I want to enroll in the plan at this time. I have indicated below the percentage or dollar amount that I want to contribute to the

plan through payroll deduction. You must select the same method (percentage or dollar amount) for all contribution types.Percentages must be in increments of 1% (non-whole numbers will be rounded down to the nearest percent).

Check one: ❐ Percentage per pay period❐ Dollar Amount per pay period (Consult with your employer to determine if your plan permits.)

Pretax Salary Deferral

Roth 401(k) Deferral**Consult with your employer to determine if the Roth 401(k) option is available in your plan. Also,loans and hardship withdrawals will not be issued from your Roth 401(k) balance.

Pretax Catch-up Deferral** **For catch-up deferrals, you must be eligible to make elective deferrals under your employer's401(k) plan and have, or will have, attained age 50 before the close of the calendar year. If you have not met the age requirement you will not be enrolled in catch-up contributions.Roth Catch-up Deferral**

Important: All deferrals that you elect in this section will be invested using the same fund allocation percentages that you select inthe "Investment Selection" below.

❐ No, I do not want to enroll in the plan at this time. My deferral is zero.

Investment SelectionIn the "Investment Selection" column, I have enteredthe percent of my contribution that I want allocated inthe fund(s) choices. All contributions elected on thisform will be allocated in the fund(s) that I haveselected.

I understand the "Investment Selection" andcorresponding percentage will remain in effect until Irequest a change, in accordance with the provisions ofthe plan. I will receive a confirmation of the requestedchange.

I understand that if this section is not completed, or if thefund percentages total more than 100%, that 100% of thecontribution will be invested in the Money Market fundfor the first 90 days. If further reinvestment direction is notreceived within 90 days, all investments and any futurecontributions will be moved to a GuidedSavings managedaccount.

I understand that if the "Investment Selection" percentagestotal less than 100%, the difference will be invested inthe Money Market fund.

Prior to requesting any movement of funds, pleasereview the fund prospectus for policies regardingfrequent trading and market timing.

You may select any combination in 1% increments totaling 100% (non-wholenumbers will be rounded down to the nearest percent). These investment selectionsare for future allocations only and will not impact currently invested funds.

Investment Selection

Broker Series #3 - R Shares Guided Fund Select

FEDERATED KAUFMANN K19 %

FEDERATED TOTAL RETURN BOND K114 %

AMERICAN FUNDS THE GROWTH FUND OF AMERICA R3186 %

AMERICAN FUNDS EUROPACIFIC GROWTH R3187 %

AMERICAN FUNDS MUTUAL R3395 %

MUTUAL SHARES R861 %

FRANKLIN US GOVERNMENT SECURITIES R888 %

OPPENHEIMER INTERNATIONAL GROWTH N1447 %

OPPENHEIMER RISING DIVIDENDS N1477 %

FRANKLIN HIGH INCOME R4183 %

OPPENHEIMER DEVELOPING MARKET N5206 %

LORD ABBETT GROWTH OPPORTUNITIES R310408 %

LORD ABBETT INTERNATIONAL OPPORTUNITIES R310410 %

LORD ABBETT ALPHA STRATEGY R310414 %

(Funds continued on next page)

Page 1 of 2

You may select any combination in 1% increments totaling 100% (non-wholenumbers will be rounded down to the nearest percent). These investment selectionsare for future allocations only and will not impact currently invested funds.

Investment Selection

Broker Series #3 - R Shares Guided Fund Select

LORD ABBETT TOTAL RETURN R310424 %

LORD ABBETT SMALL-CAP BLEND R310816 %

FEDERATED AUTOMATED CASH MANAGEMENT K*6858 %

Totals 100%

Authorization and SignatureAs a participant in this plan, your employer may provide your investment and plan eligibility information to third parties necessary toadminister the plan. I hereby authorize the company to make the necessary payroll deductions from my compensation as indicated above.The authorization set forth in this form shall become effective at the earliest time permitted by the terms of the plan.

Employee Signature: _________________________________________________________ Date: ______/______/________

Page 2 of 2

RS0016 12/06 BC

Beneficiary Designation Form Qualified Retirement Plan

Employee Information (print)

Employer Name _________________________________________ Office/Client Number _________________________

Employee Name ________________________________________ Social Security Number - -

Address ____________________________________________________________________________________________

City ___________________________________________________ State ______________ Zip Code _______________

Marital Status (check the appropriate box)

� Married � Not Married I understand that if I am married I may only have one Primary Beneficiary which is my spouse. However, I understand I may select a Primary Beneficiary other than my spouse if my spouse signs the section below entitled “Spousal Waiver.”

I understand that if I am not married, I may designate any person(s) as the Primary and Secondary Beneficiaries. However, I further understand that if I become married, my spouse will be my Primary Beneficiary unless I complete a new Beneficiary Designation Form and my spouse consents to my designation.

Primary Beneficiary (print)

I hereby designate the following person(s) as my beneficiary(ies) to receive any benefit which may become due at or after my death according to the terms of the Plan. I reserve the right to change this designation with the understanding that this designation, and any change thereof, will be effective only upon delivery to the Plan Administrator. The benefit will be paid to my Primary Beneficiaries if living. In the event that my Primary Beneficiaries are not living, benefits will be paid to my Secondary Beneficiary. All married individuals will have one primary beneficiary unless the Spousal Waiver section is completed and notarized.

Relationship � Spouse � Other Share %


Name Name

Address Address

City ST Zip City ST Zip

SSN - - SSN - -

Secondary Beneficiary (print)



Name Name

Address Address

City ST Zip City ST Zip

SSN - - SSN - -

Spousal Waiver (must be notarized)

I am the spouse of the participant named above. I consent to my spouse’s election to identify a primary beneficiary other than myself (the participant’s spouse). I consent to the above named primary beneficiary(ies). I recognize that if anyone other than me is designated as Primary Beneficiary on this form, I am waiving my rights to receive benefits under the plan when my spouse dies.

Spouse Must Sign Here The signature of the spouse must be witnessed by a notary public.

Notary Completes This Section

Print Name Subscribed and sworn to before me on this

Signature day of (month, year)

Today’s Date / / Notary Signature

Authorization and Signature

� Employee Signs Here Date / /

Return this completed form to your employer.

401(k) PlanningInvest in your future

Plan for your retirement and achieve your financial goals

Your Retirement...

Liv ing Longer - Sav ing EnoughToday we are living longer, healthier lives. Having enough money saved to last your lifetime is all about

planning. Social security can be a significant source of income, but is it enough and will it be there when

you need it? Social security is really meant as a supplement to your retirement income. Smart planners

know that they will need other forms of income. A 401(k) plan can help.

S ources of Retirement Income*

39% Socia l

Secur i t y

13%

Savings

20%

Pens ion

26% Work

I ncome

2% O ther

Sources

* Age 65 and o lder* Age 65 and o lder

Source: Federal Interagency Forum on Aging-Related Statistics, 2006, “Older Americans Update 2006: Key Indicators of Well-Being,” table 9A.

What Are Your D reams?You have dreams and goals for your future. Having the

financial security to reach those goals is up to you. The

decision to save, plan, and invest now can determine what

goals you will achieve and what freedoms you will enjoy

as you grow older. You have the opportunity to begin your

401(k) savings plan today.

2

Planning for Your FuturePlanning now for your retirement will provide you the best

opportunity to reach your financial goals. The sooner you

begin saving or contributing to a retirement savings plan, the

better your chance of growing your investment over time.

Your Future Plan...

$47 ,302

$52,741

$152 ,832

$191,936

T h i s g ra p h c o m p a r e s t h e g r o w t h o f $ 2 5 0 p e r m o n t h ( a d j u s t e d f o r i n f l a t i o n o v e r t i m e ) c o n t r i b u t e d t o a t a x - d e f e r r e d r e t i r e m e n t a cc o u n t a n d t h e s a m e a m o u n t c o n t r i b u t e d t o

a t a x a b l e a c c o u n t . B a l a n c e i n t h e t a x - d e f e r r e d a c c o u n t w i l l b e s u b j e c t t o i n c o m e t a xe s o n w i t h d ra wa l. A s s u m e s 8 % a n n u a l r e t u r n , 4 % a n n u a l wa g e i n f l a t i o n . T h i s c h a r t i s h y -

p o t h e t i ca l a n d u s e d f o r i l l u s t ra t i v e p u r p o s e s o n l y. R a t e s o f r e t u r n w i l l va r y o v e r t i m e. C o n t r i b u t i o n s a l l o ca t e d t o va r i a b l e i n v e s t m e n t c h o i c e s ca n l o s e va l u e a n d m a y b e w o r t h

m o r e o r l e s s t h a n o r i g i n a l l y i n v e s t e d w h e n r e d e e m e d.

3

Tax AdvantagesThe contributions you make to your company’s 401(k)

plan are deducted from your pay before taxes are with-

held. As a result, your taxable income is reduced and

you pay less in current taxes. The money you have

invested can also grow without being reduced by

current taxes. The growth in savings is not taxed until

the money is withdrawn. This potential growth is

called tax-deferred compounding. The following chart

shows the benefit of tax-deferred compounding.

$371 ,210

$529,937

0 $40,000 $100,000 $400,000$200,000 $300,000

10 years

20 20 years

30 years

Taxable Account (a f ter taxes)

Tax-Deferred Account

T h e B e n e f i t o f Ta x - D e f e r r e d C o m p o u n d i n gSavings of $250 per month

A c t i n g S o o n e r C a n P a y O f f At Age 67

$718 ,000I nvest ing

Star ts at Age 23

A d e ca d e m a k e s a d i f f e r e n c e. I n t h i s

e x a m p l e , s t a r t i n g a n i n v e s t m e n t j u s t t e n

y e a r s e a r l i e r m a k e s a $ 4 4 8 , 0 0 0 d i f f e r e n c e.

T h i s i s t h e r e s u l t o f a $ 1 , 0 0 0 p e r y e a r,

t a x - d e f e r r e d i n v e s t m e n t t h a t a s s u m e s a

1 0 % a n n u a l g r o w t h ra t e .

At Age 67

$270 ,000I nvest ing

Star ts at Age 33

$500,000

What Amount o f Sav ings Is Right for You?Investing even a small amount of your pay can make a difference at retirement. Only you can determine your personal savings goal and how much you are able to contribute to your 401(k) plan each year.

Growth and RiskEvery investment carries some risk. Understanding the types of invest-ments offered through your plan will help you to make smarter choices about how much and where to begin investing.

D ivers i fyDiversification means spreading your money across different types of funds (stocks, bonds, cash equiva-lents) to reduce your overall risk. Differing types of investments do not always perform the same way at the same time. You can smooth the ups and downs of market cycles by diversifying.

Understanding

Investments

Type of Investments Description

Cash Equivalent/ Money

Market Funds

Money market funds seek to maintain a stable net asset value by investing in the short-term, highgrade securities sold in the money market. These are generally the safest, most stable securities available.

Bonds/Fixed

Income Funds

A fund that invests primarily in bonds, whether they are issued by corporations, municipalities, or the US government and related agencies. Bond funds generally emphasize income over growth, and can generate either taxable or tax-free income.

Stocks/Funds

Equities

A fund that invests primarily in stocks.

*This i s not intended as f inancia l adv ice. P lease consul t your f inancia l adv isor for addi t ional in format ion .

How wi l l contr ibut ions af fec t your paycheck?

Annual salary

If you want to contribute this much of your annual salary...

3% 5% 8% 10% 15%

your monthly contribution will be:

$20,000 $50 $83 $133 $167 $250

$30,000 $75 $125 $200 $250 $375

$40,000 $100 $167 $267 $333 $500

$50,000 $125 $208 $333 $417 $625

$60,000 $150 $250 $400 $500 $750

4

Your Savings Goal...

The Investment Profi le Page User’s Guide

T his guide will help you use the Morningstar Investment Profi le to your advantage. For more information, we recommend you read all disclosure information before investing.

User’s Guide

InvestmentInformation

MorningstarRating

Fees and Expenses

Operations

MorningstarStyle BoxTM

MorningstarSectors

3

4

2

1

8

9

Performance

6

Benchmarkand CategoryDescriptions

5

Top Holdings

10

Composition

7

User’s Guide...

6

7

User’s Guide...

Morningstar RatingTM The Morningstar Rating brings load-adjustments, perform-ance (returns) and risk together into one evalu-ation. To determine a fund’s star rating for a given time period (three, five, or 10 years), the fund’s risk-adjusted return is plotted on a bell curve: If the fund scores in the top 10% of its category, it receives 5 stars (Highest); if it falls in the next 22.5% it receives 4 stars (Above Average); a place in the middle 35% earns 3 stars (Average); those lower still, in the next 22.5%, receive 2 stars (Below Average); and the bottom 10% get only 1 star (Lowest). The Overall Morningstar Rating is a weighted average of the available three-, five-, and 10-year ratings.

Investment Information A summary of the Investment Objectives and Policy section found in every prospectus. It states the objec-tive of the fund and how the manager(s) intend to invest to achieve this objective. It includes any limitations to the fund’s investment policies, as well as any share class structure differences, previous names, mergers, liquida-tion, and opening and closing information.

Fees and Expenses A breakdown of the various fees and expenses associated with the fund.

Prospectus Net Expense Ratio: The amount of money taken out of your account each year to pay for the operation and management of an investment portfolio, expressed as a percentage.

Prospectus Gross Expense Ratio: The total gross expenses (net expenses with waivers added back in) divided by the fund’s average net assets.

Maximum Sales Charge: A combination of the highest possible deferred fees and front-end sales charges a fund can apply.

12b-1 Fee: Maximum annual charge deducted from fund assets to pay for distribution and marketing costs. Although usually set on apercentage basis, this amount will occasionally be a flat figure.

Redemption Fee: The redemption fee is an amount charged when money is withdrawn from the fund. This fee does not go back into the pockets of the fund company, but rather into the fund itself and thus does not represent a net cost to shareholders.

Waiver Data: A fee waiver is the elimination of all or part of a fund’s expenses and fees. Funds, particularly fixed-income funds, adopt this practice at various times to make their returns more competitive.

Operations Find out where to write or call for more information, along with the name of the person who determines which stocks or bonds belong in the investment portfolio (the “portfolio manager”) and how long that manager has been working on the portfolio.

Benchmark and Category Descriptions Brief descriptions about the Benchmark and Category with which the fund is associated.

Benchmark: The Index against which the fund’s performance is measured.

Morningstar Category: While the prospectus objective identifies a fund’s investment goals based on the wording in the fund prospectus, the Morningstar Category identifies funds based on their actual investment styles as measured by their underlying portfolio holdings (portfolio and other statistics over the past three years).

Performance The investment’s total return is shown for the preceding year, as well as the average annualized return for the past three, five, and 10 years. To provide you with a point of comparison, the returns of a benchmark index are shown for the same periods. Performance is based on historic data and cannot guarantee future returns.

Composition We break down the fund’s holdings into general investment classes. The pie chart shows how much emphasis is placed on stocks, bonds, or cash. We also show how much is held in non-U.S. stocks. Funds that hold more than 10% in cash usually carry

less risk because not all of their holdings are exposed to a market.

For funds that invest in shorts and derivatives, we use a bar chart to show the long and short positions of each investment class. We also display the overall net percentage value of each investment class.

Morningstar Style BoxTM The Morningstar Style Box reveals a fund’s invest-ment strategy. For equity funds and fixed-income funds respectively, the vertical axis shows the market capitalization of the stocks owned or the average credit quality of the bonds owned. The horizontal axis shows investment style (value, blend, or growth) or interest rate sensitivity as measured by a bond’s duration (short, intermediate or long).

Morningstar® Sectors Morningstar determines how much of each stock portfolio is held in each of Morningstar’s 12 major industrial sectors, which roll up into three broader categories.

Credit Analysis (Fixed Income only): The credit analysis depicts the quality of US and non-U.S. bonds in the fund’s portfolio. The analysis reveals the percentage of fixed-income securities that fall within each credit-quality rating as assigned by Standard & Poor’s or Moody’s.

Morningstar World Regions (International only):A breakdown of the geographical exposure of a fund’s stock assets. Regional exposure summarizes a portfolio’s exposure to geopolitical risk, and it also provides a refer-ence point for understanding fund returns.

Top Ten Holdings The top holdings are the stocks or bonds with the most influence on a portfolio’s returns. Conservative portfolios typically devote no more than 3% to 4% of their assets to any one stock or bond. More daring portfolios may devote 7% or more to one stock.

2

3

1

4

5

6

7

8

9

10

User’s Guide...

User’s Guide

We assign each investment into one of our nine Style Box squares by analyzing its portfolio and determining the best fit.

Things to Remember About the Morningstar Style BoxRisk increases as you move down and to the right of the Morningstar Style Box. Don’t put all your eggs in one basket. The returns of investments from different parts of the Morningstar Style Box probably

won’t move in the same direction at the same time. By combining investments from different parts of the Morningstar Style Box, your portfolio’s overall returns will likely be more stable.

What the Morningstar Style Box Does It paints a picture of what’s in an investment’s portfolio. Are the companies large or small? Are the stocks cheap or expensive? Do the bonds have long or short maturities? Are they of high or low quality?

The Morningstar Style Box also provides a basis for our domestic stock fund categories. Similar investments are categorized together, then rated on their ability to balance risk and reward relative to other investments in that same, fairly narrow category.

How to Use the Morningstar Style BoxTM

The Morningstar Style Box is a visual tool that helps investors see past confusing fund names and descriptions to better understand the “investment style” of stocks and mutual funds.

Morningstar Equity Style Box Morningstar Fixed-Income Style Box

Value Blend Growth

Smal

lM

idLa

rge

Low

Med

ium

High

Short Intermediate Long

Within the stock grid, nine possible combinations exist, ranging from large-cap value for the safest investments to small-cap growth for the riskiest.

Within the bond grid, nine possible combinations exist, ranging from short duration or maturity/high quality for the safest investments to long duration or maturity/low quality for the riskiest.

Large-capValue

Short-termHigh Quality

Interm-termHigh Quality

Long-termHigh Quality

Mid-capValue

Short-termMediumQuality

Interm-termMediumQuality

Long-termMediumQuality

Small-capValue

Short-termLow Quality

Interm-termLow Quality

Long-termLow Quality

Large-capBlend

Mid-capBlend

Small-capBlend

Large-capGrowth

Mid-capGrowth

Small-capGrowth

Style Risk Duration Risk

Size

Qua

lity

Low

High

Low

High

8

9

User’s Guide...

User’s Guide

The Morningstar Rating, commonly called the “star rating,” tells you how well an invest-ment has performed relative to similar offerings after adjusting for all costs and risk. It rates investments from one to five stars, with the best performers receiving five stars and the worst performers receiving a single star.

The star rating is best used as an initial screen to identify investments worthy of further research, those that have performed well relative to their peers. It’s a strictly quantitative measure—a high rating doesn’t imply the

approval or endorsement of a Morningstar analyst. Keep in mind that the rating is based solely on historical performance, and a highly rated offering may no longer have the portfolio manager responsible for that performance. Or—conversely—a lower-rated or non-rated offering might now employ a manager who produced excellent results with other managed invest-ment products.

Also, because ratings are based on performance within specific categories, it’s important to note that not all five-star offerings are equal or even interchangeable.

A five-star sector fund, for example, might have the best risk-adjusted return within its specific category, but it’s probably far riskier than a highly rated diversified offering. Rather than choosing investments according to their ratings, investors should first decide on an overall portfolio strategy and then seek the best investments for each portion of their portfolio. The Morningstar Rating can then be used to identify possible candi-dates, but you should never make a buy or sell decision based solely on the rating.

How to Use the Morningstar RatingTM

The Morningstar Rating is a useful tool for identifying investments worthy of further research, but it’s not the only thing to consider.

The Morningstar Rating is based on risk-adjusted return, which is calculated by subtracting a risk penalty from total return, after accounting for all sales charges, loads, and redemption fees. The penalty is determined by the amount of variation in monthly returns, with an emphasis on downward variation. The greater the variation, the larger the penalty. Investments are ranked within their Morningstar Categories by their risk-adjusted return and assigned stars using the following distribution: the top 10% receive five stars, the next 22.5% four stars, the middle 35% three stars, the next 22.5% two stars, and the bottom 10% receive one star. Ratings are calculated for up to three time periods—three-, five-, and 10 years—and combined to produce an overall rating. Investments with less than three years of performance history are not rated.

Morningstar Rating

Percent of all rated investments

10% 22.5% 22.5% 10%35%

40%

30%

20%

10%

Legg Mason Partners Mid Cap Core C SBMLX....................................................................................................................................................................................................................................................................................................................................................BenchmarkS&P MidCap 400 TR

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQQ Average AverageOut of 415 Mid-Cap Blend funds. An investment's overall Morningstar Rating, based on its risk-adjusted return,is a weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.

Investment Strategy from investment's prospectus

The investment seeks long-term growth of capital.The fund normally invests at least 80% of total assets

in equity securities of medium-sized companies withinmarket capitalizations range of companies in the S&PMid-Cap 400 index or the Russell Mid-cap index at the timeof purchase. It may also invest up to 25% of total assets inforeign securities.

Fees and Expenses as of 05-30-08

Prospectus Net Expense Ratio 1.94%Prospectus Gross Expense Ratio 1.94%Maximum Sales Charge 1.00%12b-1 Fee 1.00%Redemption Fee .

Waiver Data Type Date %

. . . .

Operations and Management

Fund Inception Date 09-01-98Portfolio Manager(s) Brian M. Angerame

Derek J. Deutsch, CFAManagement Company Legg Mason Partners Fund

Advisor, LLCTelephone 800-451-2010Web Site investorservices.leggmason.com

Benchmark Description: S&P MidCap 400 TR

Standard & Poor's Midcap 400 TR Index: Includesapproximately 10% of the capitalization of U.S. equitysecurities. These are comprised of stocks in the middlecapitalization range. At the original time of screening, thiswas a $200 million to $5 billion market value range. Anymidcap stocks already included in the S&P 500 are excludedfrom this index, which started on December 31, 1990. Thelevel of the index reflects the total market value of all 400component stocks relative to this date. A level of 135, forexample, indicates that the market value of the indexportfolio has risen 35% from December 31, 1990. The S&P400 figure is presented as a total return.

Category Description: Mid-Cap Blend

The typical mid-cap blend fund invests in stocks of varioussizes and mixed characteristics, giving it amiddle-of-the-road profile. Most shy away from high-pricedgrowth stocks, but aren't so price-conscious that they land invalue territory.

Performance

15

30

45

60

0

-15

-30

-45

Total Return%as of 11-30-08

InvestmentBenchmark

Average annual, if greaterthan 1 year.

YTD 1 Year 3 Year 5 Year 10 Year Since Inception-38.35 -38.52 -9.26 -2.25 3.27 4.98 Fund Return %-38.96 -39.06 -9.26 -2.25 3.27 4.98 Load-Adj. Return %-39.18 -39.30 -9.98 -0.69 5.16 . Benchmark Return %-41.86 -42.02 -11.55 -2.24 3.09 . Category Average %................................................................................................................................................................................................................

. . QQQQ QQQ QQQ . Morningstar Rating™

. . 415 335 166 . # of Funds in Category

Quarter End Returns as of 09-30-08 YTD 1 Year 3 Year 5 Year 10 Year Since Inception

Fund Return % -16.68 -19.93 1.28 5.87 7.80 8.25Standardized Return % -17.52 -20.64 1.28 5.87 7.80 8.25

Performance Disclosure: The performance data quoted represents past performance and does not guarantee future results.The investment return and principal value of an investment will fluctuate thus an investor's shares, when redeemed, maybe worth more or less than their original cost. Current performance may be lower or higher than return data quoted herein.

Growth of $10,000 as of 11-30-08 Investment Benchmark

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

50

40

30

20

0

10K

Portfolio Analysis as of 09-30-08Composition as of 09-30-08 % Assets

U.S. Stocks 85.4Non-U.S. Stocks 7.8Bonds 0.0Cash 6.9Other 0.0

Morningstar Style Box™ as of 09-30-08 % Mkt Cap

LargeM

edSm

all

Value Blend Growth

Giant 0.00..........................................................Large 8.03Medium 71.95Small 18.63..........................................................Micro 1.39

Top 10 Holdings as of 09-30-08 % Assets

Casey's General Stores, Inc. 3.07Sherwin-Williams Company 2.65Magellan Health Services, Inc. 2.51Mohawk Industries, Inc. 2.47R.R. Donnelley & Sons Company 2.45...........................................................................................................L-3 Communications Holdings, Inc. 2.28Toll Brothers, Inc. 2.21Autodesk, Inc. 2.16Celanese Corporation 2.16Check Point Software Technologies, Ltd. 2.12

...........................................................................................................Total Number of Stock Holdings 58Total Number of Bond Holdings 0Annual Turnover Ratio % 62Total Fund Assets ($mil) 565.25

Morningstar Sectors as of 09-30-08 Fund% S&P 500%

h Information 17.47 19.24............................................................................................................r Software 8.06 3.88t Hardware 8.62 8.96y Media 0.79 2.58u Telecommunication 0.00 3.82

j Service 43.57 40.01............................................................................................................i Healthcare Service 15.78 14.00o Consumer Service 7.95 7.74p Business Service 7.61 4.96a Financial Service 12.23 13.31

k Manufacturing 38.96 40.75............................................................................................................s Consumer Goods 6.46 10.75d Industrial Materials 17.41 11.44f Energy 8.13 14.38g Utilities 6.96 4.18

Release Date: 11-30-2008

©2008 Morningstar, Inc., Morningstar Investment Profiles™ 312-696-6000. All rights reserved. The information contained herein: (1) is proprietary to Morningstar and/or its content providers; (2) maynot be copied or distributed and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any useof information. Past performance is no guarantee of future performance. Visit our investment website at www.morningstar.com

Legg Mason Partners Large Cap Growth C SLCCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkRussell 1000 Growth TR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQ Below Average AverageOut of 1505 Large Growth funds. An investment's overall Morningstar Rating, based on its risk-adjusted return, isa weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.


The investment seeks long-term growth of capital.The fund normally invests at least 80% of total assets

in equity securities, or other investments with similareconomic characteristics, of large capitalization companiessimilar to companies in the Russell 1000 index. Equitysecurities include U.S. exchange traded and over the-countercommon stocks, debt securities convertible into equitysecurities, and warrants and rights relating to equitysecurities.




. . . .


Fund Inception Date 08-29-97Portfolio Manager(s) Alan J. BlakeManagement Company Legg Mason Partners Fund


Benchmark Description: Russell 1000 Growth TR USD

The Russell 1000 Growth Index measures the performance ofthose Russell 1000 companies with higher price-to-bookratios and higher forecasted growth values. The Russell 1000Index measures the performance of the 1,000 largest U.S.companies based on total market capitalization, whichrepresent approximately 98% of the investable U.S. equitymarket.

Category Description: Large Growth

Large-growth funds invest in big companies that areprojected to grow faster than other large-cap stocks. Most ofthese funds focus on companies in rapidly expandingindustries.

Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception-40.90 -42.46 -14.43 -7.43 -2.11 1.45 Fund Return %-41.49 -43.03 -14.43 -7.43 -2.11 1.45 Load-Adj. Return %-39.53 -39.75 -9.75 -3.11 -3.62 . Benchmark Return %-41.95 -41.93 -10.88 -3.20 -1.84 . Category Average %................................................................................................................................................................................................................

. . QQ Q QQQ . Morningstar Rating™



Fund Return % -21.05 -24.81 -4.66 -0.24 2.95 4.16Standardized Return % -21.84 -25.56 -4.66 -0.24 2.95 4.16



1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K




LargeM

edSm

all

Value Blend Growth



Amazon.com, Inc. 8.26Berkshire Hathaway Inc. A 7.34Amgen, Inc. 6.54Genentech, Inc. 6.41Sears Holdings Corporation 4.04...........................................................................................................Johnson & Johnson 3.89Biogen Idec, Inc. 3.84PepsiCo, Inc. 3.72NASDAQ OMX Group, Inc. 3.68Qualcomm, Inc. 3.45

...........................................................................................................Total Number of Stock Holdings 32Total Number of Bond Holdings 0Annual Turnover Ratio % 9Total Fund Assets ($mil) 1,953.85







Legg Mason Partners Global Equity C SILLX....................................................................................................................................................................................................................................................................................................................................................BenchmarkMSCI World NR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQQ Average AverageOut of 492 World Stock funds. An investment's overall Morningstar Rating, based on its risk-adjusted return, is aweighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.


The investment seeks long-term capital growth, income isincidental.

The fund invests primarily in the common stock of U.S.and non-U.S. issuers, particularly issuers located in countriesincluded in the MSCI World index. It normally invests at least80% of assets in equity and equity-related securities and atleast 40% of asset in non-U.S. issuers. The fund investsprimarily in securities with a market capitalization of greaterthan U.S. $15 billion. It also may invest in securities of anymarket capitalization, including mid-cap and small-capsecurities. The fund may invest up to 10% of net assets inemerging market issuers.




ExpenseRatio Contractual 05-01-09 0.21


Fund Inception Date 09-12-00Portfolio Manager(s) Michael P. McElroy, CFA

Adam J. Petryk, CFAManagement Company Legg Mason Partners Fund


Benchmark Description: MSCI World NR USD

MSCI World NDTR_D Index: Includes all 23 MSCI developedmarket countries NDTR_D indexes are calculated daily andtake into account actual dividends reinvested daily beforewithholding taxes, but exclude special tax credits declaredby companies. In addition, NDTR_D indexes subtractwithholding taxes retained at the source, for foreigners whodo not benefit from a double taxation treaty. The returns wepublish for the index are total returns, which included.

Category Description: World Stock

World-stock funds have few geographical limitations. It iscommon for these funds to invest the majority of their assetsin the U.S., Europe, and Japan, with the remainder dividedamong the globe's smaller markets.

Performance

20

40

60

80

0

-20

-40

-60


InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception-45.75 -46.80 -9.59 -0.52 . -4.08 Fund Return %-46.30 -47.32 -9.59 -0.52 . -4.08 Load-Adj. Return %-42.56 -43.30 -8.40 0.08 . . Benchmark Return %-44.68 -45.19 -8.93 -0.28 . . Category Average %................................................................................................................................................................................................................

. . QQQ QQQ . . Morningstar Rating™

. . 492 413 . . # of Funds in Category


Fund Return % -27.36 -30.63 -0.71 7.15 . -0.62Standardized Return % -28.08 -31.30 -0.71 7.15 . -0.62



1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K




LargeM

edSm

all

Value Blend Growth



ExxonMobil Corporation 1.91International Business Machines Corp 1.82Hewlett-Packard Company 1.73Wal-Mart Stores, Inc. 1.65Microsoft Corporation 1.57...........................................................................................................Nestle 1.55Telefonica 1.54HSBC Holdings PLC 1.52Novartis 1.46Chevron Corporation 1.45


Morningstar World Regions as of 09-30-08 Fund% S&P 500%

Americas 55.96 100.00...........................................................................................................North America 54.77 99.94Latin America 1.19 0.06

Greater Europe 35.15 0.00...........................................................................................................United Kingdom 10.85 0.00Europe Developed 21.99 0.00Europe Emerging 0.49 0.00Africa/Middle East 1.81 0.00

Greater Asia 8.90 0.00...........................................................................................................Japan 5.89 0.00Australasia 2.06 0.00Asia Developed 0.29 0.00Asia Emerging 0.65 0.00



Legg Mason Partners Aggressive Growth C SAGCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkRussell 1000 Growth TR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQQ Average Above AverageOut of 1505 Large Growth funds. An investment's overall Morningstar Rating, based on its risk-adjusted return, isa weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.


The investment seeks capital appreciation.The fund invests primarily in equity securities of

companies that are believed to be experiencing, orexperience, growth in earnings that exceeds the average rateof earnings growth of the companies which comprise theS&P 500 index. It may invest in the securities of large,well-known companies that offer prospects of long-termearnings growth. The fund may invest a significant portion ofassets in small- to medium-sized companies.




. . . .


Fund Inception Date 05-13-93Portfolio Manager(s) Richard A. FreemanManagement Company Legg Mason Partners Fund



The Russell 1000 Growth Index measures the performance ofthose Russell 1000 companies with higher price-to-bookratios and higher forecasted growth values. The Russell 1000Index measures the performance of the 1,000 largest U.S.companies based on total market capitalization, whichrepresent approximately 98% of the investable U.S. equitymarket.

Category Description: Large Growth

Large-growth funds invest in big companies that areprojected to grow faster than other large-cap stocks. Most ofthese funds focus on companies in rapidly expandingindustries.

Performance

20

40

60

80

0

-20

-40

-60


InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception-44.81 -45.09 -15.39 -5.10 3.14 8.30 Fund Return %-45.36 -45.64 -15.39 -5.10 3.14 8.30 Load-Adj. Return %-39.53 -39.75 -9.75 -3.11 -3.62 . Benchmark Return %-41.95 -41.93 -10.88 -3.20 -1.84 . Category Average %................................................................................................................................................................................................................

. . Q QQ QQQQ . Morningstar Rating™



Fund Return % -25.84 -27.97 -6.34 1.66 8.25 10.49Standardized Return % -26.58 -28.69 -6.34 1.66 8.25 10.49



1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

50

40

30

20

0

10K




LargeM

edSm

all

Value Blend Growth



Anadarko Petroleum Corp. 9.29Genzyme Corporation 8.30Weatherford International, Inc. 8.25Amgen, Inc. 6.10Biogen Idec, Inc. 5.86...........................................................................................................UnitedHealth Group, Inc. 5.77Comcast Corporation 4.75Imclone Systems, Inc. 4.41L-3 Communications Holdings, Inc. 3.77Cablevision Systems A 3.76








Legg Mason Partners Appreciation C SAPCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkRussell 1000 TR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQQQQ Above Average LowOut of 1738 Large Blend funds. An investment's overall Morningstar Rating, based on its risk-adjusted return, isa weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.


The investment seeks long-term appreciation ofshareholders’ capital.

The fund invests primarily in equity securities of U.S.companies. It typically invests in medium and largecapitalization companies, but may also invest in smallcapitalization companies. Equity securities includeexchange-traded and over-the-counter common stocks andpreferred stocks, debt securities convertible into equitysecurities, and warrants and rights relating to equitysecurities.




. . . .


Fund Inception Date 02-04-93Portfolio Manager(s) Harry D. Cohen

Scott GlasserManagement Company Legg Mason Partners Fund


Benchmark Description: Russell 1000 TR USD

Russell 1000 Index: A benchmark that measures theperformance of the 1,000 largest companies in the Russell3000 Index, which represents approximately 92% of the totalmarket capitalization of the Russell 3000 Index.

Category Description: Large Blend

Large-blend funds have portfolios that are fairlyrepresentative of the overall stock market in size, growthrates, and price. They tend to invest across the spectrum ofU.S. industries and owing to their broad exposure, the funds'returns are often similar to those of the S&P 500 Index.

Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark



. . QQQQQ QQQQQ QQQQ . Morningstar Rating™






1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K




LargeM

edSm

all

Value Blend Growth



Berkshire Hathaway Inc. A 4.25Johnson & Johnson 3.24Wal-Mart Stores, Inc. 3.18ExxonMobil Corporation 2.97The Travelers Companies, Inc. 2.78...........................................................................................................Procter & Gamble Company 2.66AT&T, Inc. 2.55General Electric Company 2.44United Technologies 2.36Microsoft Corporation 2.10








Legg Mason Partners Small Cap Value C SBVLX....................................................................................................................................................................................................................................................................................................................................................BenchmarkRussell 2000 Value TR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQ Below Average AverageOut of 340 Small Value funds. An investment's overall Morningstar Rating, based on its risk-adjusted return, is aweighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.


The investment seeks long-term capital growth.The fund normally invests at least 80% of assets in

common stocks and other equity securities of smallcapitalization U.S. companies or in other investments withsimilar economic characteristics. Small capitalizationcompanies are those whose market capitalization do notexceed $3 billion or the highest month-end marketcapitalization value of any stock in the Russell 2000 index forthe previous 12 months, whichever is greater. It may investup to 20% of the value of net assets in shares of companieswith larger market capitalizations.




. . . .


Fund Inception Date 02-26-99Portfolio Manager(s) Peter J. HableManagement Company Legg Mason Partners Fund


Benchmark Description: Russell 2000 Value TR USD

Russell 2000 Value Index: Market-weighted total returnindex that measures the performance of companies withinthe Russell 2000 Index having lower price-to-book ratios andlower forecasted growth values. The Russell 2000 Indexincludes the 2000 firms from the Russell 3000 Index with thesmallest market capitalizations. The Russell 3000 Indexrepresents 98% of the of the investable US equity market.

Category Description: Small Value

Small-value funds invest in small-caps with valuations andgrowth rates below other small-cap peers. They tend toinvest in manufacturing, financial, and energy sectors.

Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception-40.32 -40.81 -13.63 -3.33 . 5.08 Fund Return %-40.92 -41.30 -13.63 -3.33 . 5.08 Load-Adj. Return %-33.04 -33.61 -9.54 -0.21 . . Benchmark Return %-35.63 -36.11 -11.12 -1.22 . . Category Average %................................................................................................................................................................................................................

. . QQ QQ . . Morningstar Rating™

. . 340 269 . . # of Funds in Category


Fund Return % -12.30 -18.43 -1.63 6.11 . 9.47Standardized Return % -13.18 -19.11 -1.63 6.11 . 9.47



1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

50

40

30

20

0

10K




LargeM

edSm

all

Value Blend Growth



iShares Nasdaq Biotechnology 1.92Lawson Software, Inc. 1.59Gibraltar Industries, Inc. 1.56Perot Systems Corporation 1.55Biomed Realty Trust, Inc. 1.54...........................................................................................................Del Monte Foods Company 1.51Allied World Assurance Holdings Ltd. 1.50Regal-Beloit Corporation 1.48Cullen/Frost Bankers, Inc. 1.44Verigy Ltd. 1.44








Legg Mason Partners Corporate Bd C SBILX....................................................................................................................................................................................................................................................................................................................................................BenchmarkBarCap US Govt/Credit Long TR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQ Low Above AverageOut of 32 Long-Term Bond funds. An investment's overall Morningstar Rating, based on its risk-adjusted return,is a weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.


The investment seeks seeks as high a level of current incomeas is consistent with prudent investment management andpreservation of capital.

The fund typically invests at least 80% of assets, plusany borrowings for investment purposes, in investment gradefixed income securities and related investments. It also mayinvest in U.S. Government securities and U.S. dollardenominated fixed income securities of foreign issuers. Thefund may invest in securities having any maturity.




. . . .


Fund Inception Date 02-26-93Portfolio Manager(s) Stephen A. Walsh

S. Kenneth LeechManagement Company Legg Mason Partners Fund

Advisor, LLCTelephone 800-451-2010Web Site www.leggmason.com

Benchmark Description: BarCap US Govt/Credit Long TR USD

Lehman Brothers Long Govt/Credit Index: Includes the LBGovernment and LB Corporate Bond indices that havematurities of 10 years or longer. The returns we publish forthe index are total returns, which include reinvestment ofdividends.

Category Description: Long-Term Bond

Long-term bond funds have average durations that exceedsix years. Most of them hold some portion of assets incorporate bonds, either investment-grade or high-yieldissues, or both. On the whole, these funds outperform otherbond categories in falling interest-rate environments, butthey tend to incur greater losses when interest rates rise.

Performance

10

20

30

40

0

-10

-20

-30


InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception-28.99 -29.06 -9.41 -4.47 0.01 3.40 Fund Return %-29.66 -29.73 -9.41 -4.47 0.01 3.40 Load-Adj. Return %-2.51 -2.56 2.94 4.35 5.49 . Benchmark Return %

-11.32 -11.56 -1.59 0.07 3.01 . Category Average %................................................................................................................................................................................................................. . Q Q Q . Morningstar Rating™. . 32 24 17 . # of Funds in Category


Fund Return % -17.58 -17.79 -5.28 -1.87 1.39 4.43Standardized Return % -18.37 -18.57 -5.28 -1.87 1.39 4.43



1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K

Portfolio Analysis as of 09-30-08Composition as of 09-30-08 Net%

U.S. Stocks 0.0Non U.S. Stocks 0.0Bonds 76.0Cash 23.6Other 0.5

.............................................................................................-100 -50 0 50 100 Total 100.0

Morningstar Style Box™ as of 09-30-08

HighM

edLow

Short Interm Long

Avg Eff Duration 5.70Avg Eff Maturity 11.10Avg Credit Quality BBBAvg Wtd Coupon 6.68Avg Wtd Price 83.91


Currency Europe (Fut) 03-16-09 22.91US Treasury Bond (Fut) 12-19-08 12.73US Treasury Bond (Fut) 12-31-08 3.07Pemex Proj Fdg Master Tr 6.625% 06-15-35 2.29Freeport-Mcmoran Copper & Gold 8.375% 04-01-17 1.60...........................................................................................................Vale Overseas 6.875% 11-21-36 1.30Rbs Cap Tr Iii FRN 09-29-49 1.29Anadarko Fin 7.5% 05-01-31 1.27Firstenergy 7.375% 11-15-31 1.19Countrywide Finl 5.8% 06-07-12 1.15


Morningstar Sectors as of 09-30-08 Fund% Category%

U.S. Credit 71.02 45.12Non-U.S. Credit 3.63 3.43Mortgage 1.48 8.38U.S. Government 2.88 17.12Cash 20.98 17.62

Credit Analysis as of 09-30-08 % Bonds

AAA 2

AA 11

A 34

BBB 45

BB 2

B 3

Below B 3

NR/NA 0

0 25 50 75 100



Legg Mason Partners Fundamental Value C SFVCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkRussell 1000 TR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQQ Average AverageOut of 1738 Large Blend funds. An investment's overall Morningstar Rating, based on its risk-adjusted return, isa weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.


The investment seeks long-term capital growth; currentincome is a secondary consideration.

The fund invests primarily in common stocks andcommon stock equivalents, such as preferred stocks andsecurities convertible into common stocks, of companies theportfolio managers believe are undervalued in themarketplace. It may invest up to 25% of assets in securitiesof foreign issuers which may involve greater risk thansecurities of U.S. issuers.




. . . .


Fund Inception Date 08-10-93Portfolio Manager(s) John G. Goode

Peter J. HableManagement Company Legg Mason Partners Fund


Benchmark Description: Russell 1000 TR USD

Russell 1000 Index: A benchmark that measures theperformance of the 1,000 largest companies in the Russell3000 Index, which represents approximately 92% of the totalmarket capitalization of the Russell 3000 Index.

Category Description: Large Blend

Large-blend funds have portfolios that are fairlyrepresentative of the overall stock market in size, growthrates, and price. They tend to invest across the spectrum ofU.S. industries and owing to their broad exposure, the funds'returns are often similar to those of the S&P 500 Index.

Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark



. . QQQ QQ QQQQ . Morningstar Rating™






1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K




LargeM

edSm

all

Value Blend Growth



J.P. Morgan Chase & Co. 4.55Chubb Corporation 3.99Wal-Mart Stores, Inc. 3.50Walt Disney Company 2.92Johnson & Johnson 2.91...........................................................................................................Novartis AG ADR 2.90Abbott Laboratories 2.83Microsoft Corporation 2.68State Street Corporation 2.54Raytheon Company 2.45








Legg Mason Partners Govt Securities C SGSLX....................................................................................................................................................................................................................................................................................................................................................BenchmarkBarCap US Government TR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQ Below Average Below AverageOut of 352 Intermediate Government funds. An investment's overall Morningstar Rating, based on itsrisk-adjusted return, is a weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure fordetails.


The investment seeks current return.The fund normally invests at least 80% of assets, plus

any borrowings for investment purposes, in debt securitiesissued or guaranteed by the U.S. Government, its agencies orinstrumentalities and related investments. These securitiesinclude U.S. Treasury securities and mortgage-relatedsecurities. It may also enter into mortgage dollar rolltransactions.






Fund Inception Date 02-04-93Portfolio Manager(s) Stephen A. Walsh

Mark LindbloomManagement Company Legg Mason Partners Fund

Advisor, LLCTelephone 800-451-2010Web Site www.leggmason.com

Benchmark Description: BarCap US Government TR USD

Lehman Brothers Government Bond Index: Listed forgovernment-bond general and Treasury funds. Because ittracks the returns of U.S. Treasuries, agency bonds, and one-to three-year U.S. government obligations, this index iseffective for tracking portfolios holding non-mortgagegovernment securities. The returns we publish for the indexare total returns, which include reinvestment of dividends.

Category Description: Intermediate Government

Intermediate government funds concentrate on bonds backedby the U.S. government or by government-linked agencies.This backing minimizes the credit risk of these funds, as theU.S. government is unlikely to default on its debt. Thesefunds have, on average, durations between 3.5 and six years.Consequently, the group's performance--and its level ofvolatility--tends to fall between that of the short governmentand long government bond categories.

Performance

5

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20

0

-5

-10

-15


InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception-0.45 -0.51 2.53 2.50 3.30 4.40 Fund Return %-1.41 -1.47 2.53 2.50 3.30 4.40 Load-Adj. Return %8.65 8.89 7.23 5.53 5.83 . Benchmark Return %2.25 2.37 4.18 3.49 4.45 . Category Average %................................................................................................................................................................................................................. . QQ QQ Q . Morningstar Rating™. . 352 331 224 . # of Funds in Category


Fund Return % 0.39 2.13 2.69 2.52 3.27 4.50Standardized Return % -0.58 1.15 2.69 2.52 3.27 4.50



1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K



.............................................................................................-100 -50 0 50 100 Total 100.0


HighM

edLow

Short Interm Long

Avg Eff Duration 3.40Avg Eff Maturity 6.10Avg Credit Quality AAAAvg Wtd Coupon 5.35Avg Wtd Price 97.07


US Treasury Bond (Fut) 12-19-08 17.73FNMA 6% 12-01-37 12.84US Treasury Bond (Fut) 12-31-08 11.66FNMA 5% 11.06Currency Europe (Fut) 09-14-09 10.15...........................................................................................................Currency Europe (Fut) 12-15-08 9.36Currency Europe (Fut) 03-16-09 7.75FNMA 5.5% 05-01-36 5.77FNMA 5% 07-01-38 3.71GNMA 6.5% 09-20-36 3.14


Morningstar Sectors as of 09-30-08 Fund% Category%

U.S. Credit 2.95 1.84Non-U.S. Credit 0.15 0.14Mortgage 59.93 56.77U.S. Government 12.23 23.94Cash 24.73 8.61

Credit Analysis as of 09-30-08 % Bonds

AAA 98

AA 0

A 1

BBB 1

BB 0

B 0

Below B 0

NR/NA 0

0 25 50 75 100



Legg Mason Partners Small Cap Growth C SCSMX....................................................................................................................................................................................................................................................................................................................................................BenchmarkRussell 2000 Growth TR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQQQ Above Average AverageOut of 699 Small Growth funds. An investment's overall Morningstar Rating, based on its risk-adjusted return, isa weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.


The investment seeks long-term growth of capital.The fund normally invests at least 80% of assets in

equity securities of small companies, which are companieswith market cap values not exceeding $3 billion or thehighest month-end market capitalization value of any stock inthe Russell 2000 Index. The fund may invest up to 20% ofassets in equity securities of companies that are notconsidered to be small cap companies. In addition, it investsup to 20% of assets in equity securities of foreign issuers,either directly or through depository receipts.




. . . .


Fund Inception Date 07-01-98Portfolio Manager(s) Jeffrey Russell, CFA

Aram E. GreenManagement Company Legg Mason Partners Fund



Russell 2000 Growth Index: Market-weighted total returnindex that measures the performance of companies withinthe Russell 2000 Index having higher price-to-book ratios andhigher forecasted growth values. The Russell 2000 Indexincludes the 2000 firms from the Russell 3000 Index with thesmallest market capitalizations. The Russell 3000 Indexrepresents 98% of the of the investable US equity market.

Category Description: Small Growth

Small-growth funds focus on faster-growing companieswhose shares are at the lower end of themarket-capitalization range. These funds tend to favorcompanies in up-and-coming industries or young firms intheir early growth stages. As a result, the category tends tomove in sync with the market for initial public offerings.Many of these funds invest in the technology, health-care,and services sectors. Because these businesses arefast-growing and often richly valued, their stocks tend to bevolatile.

Performance

15

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45

60

0

-15

-30

-45


InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception-43.07 -42.08 -11.62 -3.43 4.37 4.31 Fund Return %-43.62 -42.62 -11.62 -3.43 4.37 4.31 Load-Adj. Return %-41.70 -41.34 -10.94 -3.29 -0.42 . Benchmark Return %-44.24 -44.21 -12.68 -4.30 1.92 . Category Average %................................................................................................................................................................................................................

. . QQQ QQQ QQQQ . Morningstar Rating™






1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

50

40

30

20

0

10K




LargeM

edSm

all

Value Blend Growth



ITC Holdings Corporation 2.96Burger King Holdings, Inc. 2.68Blackboard, Inc. 2.64Idex Corporation 2.21Lawson Software, Inc. 2.18...........................................................................................................Lions Gate Entertainment Corporation 2.18Alexion Pharmaceuticals, Inc. 2.16Citrix Systems, Inc. 2.16Orbital Sciences Corporation 2.14ION Geophysical Corporation 1.98








Western Asset Money Market C SBZXX....................................................................................................................................................................................................................................................................................................................................................BenchmarkUSTREAS T-Bill Auction Ave 3 Mon

Overall Morningstar Rating™ Morningstar Return Morningstar Risk. . .


The investment seeks current income and preservation ofcapital.

The fund invests in high quality, U.S. dollardenominated short-term debt securities. These may includeobligations issued by U.S. and foreign private issuers andfinancial institutions, the U.S. government, its agencies orinstrumentalities, U.S. states and municipalities. It mayinvest at least 25% of assets in bank obligations. The fundlimits foreign investments to issuers located in majorindustrialized countries.




. . . .


Fund Inception Date 03-19-07Portfolio Manager(s) Management TeamManagement Company Legg Mason Fund Adviser,

Inc.(LMFA)Telephone 800-451-2010Web Site www.leggmason.com

Benchmark Description: USTREAS T-Bill Auction Ave 3 Mon

3 Month T-Bill Index: Three-month T-bills aregovernment-backed short-term investments considered to berisk-free and as good as cash because the maturity is onlythree months. Morningstar collects yields on the T-bill on aweekly basis from the Wall Street Journal.

Category Description: Money Market-Taxable

Taxable money market funds invest in short-term moneymarket securities in order to provide a level of currentincome that is consistent with the preservation of capital.

Performance

5

10

15

20

0

-5

-10

-15


InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception1.83 2.13 . . . 3.03 Fund Return %0.83 1.13 . . . 3.03 Load-Adj. Return %1.50 1.78 . . . . Benchmark Return %1.83 2.53 . . . . Category Average %


Fund Return % 1.56 2.49 . . . 3.19Standardized Return % 0.56 1.49 . . . 3.19



1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

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5

0

10K

Portfolio AnalysisComposition as of 11-30-08 % Assets



HighM

edLow

Short Interm Long



Legg Mason Partners Target Retire C LMRCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ US Moderately Conservative TR USD



The investment seeks the highest total return.The fund invests in a combination of underlying funds

representing a variety of asset classes and investmentstyles. It is managed to the specific target date included inits name.






Fund Inception Date 08-29-08Portfolio Manager(s) Steven Bleiberg

Andrew PurdyManagement Company Legg Mason Partners Fund


Benchmark Description: DJ US Moderately Conservative TR USD

Dow Jones U.S. Moderately Conservative Index: Is designedfor asset allocation strategists (portfolio builders) who arewilling to take 40% of the risk of the U.S. securities market.It is a total returns index that is a time-varying weightedaverage of stocks, bonds, and cash. It is the efficientallocation of stocks, bonds, and cash in a portfolio whosesemideviation is 60% of the annualized 36 month historicsemideviation of the Dow Jones 100% Index.

Category Description: Conservative Allocation

Conservative-allocation funds seek to provide both capitalappreciation and income by investing in three major areas:stocks, bonds, and cash. These funds tend to hold smallerpositions in stocks than moderate-allocation funds. Thesefunds typically have 20% to 50% of assets in equities and50% to 80% of assets in fixed income and cash.

Performance

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40

0

-10

-20

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InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception. . . . . -23.86 Fund Return %. . . . . -24.62 Load-Adj. Return %. . . . . . Benchmark Return %. . . . . . Category Average %................................................................................................................................................................................................................. . . . . . Morningstar Rating™. . . . . . # of Funds in Category


Fund Return % . . . . . -6.84Standardized Return % . . . . . -7.77



1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K



.............................................................................................-100 -50 0 50 100 Total 100.0

Morningstar Style Box™ as of 09-30-08 (EQ) ; 09-30-08 (F-I)

LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long


Western Asset Core Bond IS 43.25Global Opportunities Bond IS 15.38Western Asset High Yield IS 7.34iShares MSCI EAFE Index 5.43Vanguard REIT Index ETF 5.21...........................................................................................................Legg Mason Partners Intl All Cap Opp IS 3.93Legg Mason International Equity Inst Sel 3.83Royce Value Instl 2.76iShares Russell 1000 Growth Index 2.08Legg Mason Emerging Markets Inst Sel 1.70

...........................................................................................................Total Number of Holdings 19Annual Turnover Ratio % .Total Fund Assets ($mil) .76







Legg Mason Partners Target Retir 2050 C LMJCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ Portfolio Target 2040 TR USD













Benchmark Description: DJ Portfolio Target 2040 TR USD

Dow Jones Target 2040 Index is comprised of threeunderlying indexes which are used to represent broad assetclasses equities, bonds, and cash. The composition of theindex decreases its potential risk by increasingly movingassets from equities to bonds and cash as it approaches itstarget date.

Category Description: Target-Date 2030+

Target-date portfolios provide diversified exposure to stocks,bonds, and cash for those investors who have a specific datein mind (in this case, the years 2030+) for retirement oranother goal. These portfolios aim to provide investors withan optimal level of return and risk, based solely on the targetdate. These portfolios get more conservative as the goal dateapproaches by investing more in bonds and cash. Investmentmanagers structure these portfolios differently; two fundswith the same goal year may have different allocations toequities and therefore different levels of return and risk.

Performance

15

30

45

60

0

-15

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-45


InvestmentBenchmark







1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

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10K




LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long


iShares Russell 1000 Growth Index 14.21iShares MSCI EAFE Index 10.14Legg Mason Partners Appreciation IS 7.96Legg Mason Partners U.S. Large Cap Eq IS 7.70Legg Mason Partners Intl All Cap Opp IS 7.62...........................................................................................................Legg Mason International Equity Inst Sel 7.42iShares Russell 1000 Value Index 5.75Vanguard REIT Index ETF 5.47LEGG MASON Val Port A 5.07Legg Mason Partners Aggressive Growth IS 4.84








Legg Mason Partners Target Retir 2045 C LMKCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ Portfolio Target 2040 TR USD

















Performance

15

30

45

60

0

-15

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-45


InvestmentBenchmark







1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

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10K




LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long










Legg Mason Partners Target Retir 2040 C LMHCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ Portfolio Target 2040 TR USD

















Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark







1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K




LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long










Legg Mason Partners Target Retir 2035 C LMTCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ Portfolio Target 2040 TR USD

















Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark







1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K




LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long


iShares Russell 1000 Growth Index 14.65iShares MSCI EAFE Index 11.32Legg Mason Partners Intl All Cap Opp IS 8.33Legg Mason International Equity Inst Sel 8.12Legg Mason Partners Appreciation IS 8.06...........................................................................................................Legg Mason Partners U.S. Large Cap Eq IS 7.79iShares Russell 1000 Value Index 6.43Vanguard REIT Index ETF 5.43LEGG MASON Val Port A 5.14Western Asset Emerging Markets Debt I 5.06








Legg Mason Partners Target Retir 2030 C LMVCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ Portfolio Target 2040 TR USD

















Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark







1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K




LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long


iShares Russell 1000 Growth Index 11.77iShares MSCI EAFE Index 11.17Legg Mason Partners Intl All Cap Opp IS 8.16Legg Mason International Equity Inst Sel 7.95Western Asset Core Bond IS 7.14...........................................................................................................Legg Mason Partners Appreciation IS 6.33Legg Mason Partners U.S. Large Cap Eq IS 6.12Vanguard REIT Index ETF 5.36Global Opportunities Bond IS 5.24Western Asset Emerging Markets Debt I 4.99








Legg Mason Partners Target Retir 2025 C LMXCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ Portfolio Target 2025 TR USD















Category Description: Target-Date 2015-2029

Target-date portfolios provide diversified exposure to stocks,bonds, and cash for those investors who have a specific datein mind (in this case, the years 2015-2029) for retirement oranother goal. These portfolios aim to provide investors withan optimal level of return and risk, based solely on the targetdate. These portfolios get more conservative as the goal dateapproaches by investing more in bonds and cash. Investmentmanagers structure these portfolios differently; two fundswith the same goal year may have different allocations toequities and therefore different levels of return and risk.

Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark







1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K



.............................................................................................-100 -50 0 50 100 Total 100.0


LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long


Global Opportunities Bond IS 13.25Western Asset Core Bond IS 11.15iShares MSCI EAFE Index 10.59iShares Russell 1000 Growth Index 9.14Legg Mason Partners Intl All Cap Opp IS 7.88...........................................................................................................Legg Mason International Equity Inst Sel 7.67Vanguard REIT Index ETF 5.38Legg Mason Partners Appreciation IS 5.08Legg Mason Partners U.S. Large Cap Eq IS 4.92iShares Russell 1000 Value Index 3.54








Legg Mason Partners Target Retir 2020 C LMWCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ Portfolio Target 2025 TR USD

















Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark







1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K



.............................................................................................-100 -50 0 50 100 Total 100.0


LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long


Western Asset Core Bond IS 16.30Global Opportunities Bond IS 15.69iShares MSCI EAFE Index 10.47Legg Mason Partners Intl All Cap Opp IS 7.49iShares Russell 1000 Growth Index 7.43...........................................................................................................Legg Mason International Equity Inst Sel 7.30Vanguard REIT Index ETF 5.32Legg Mason Partners Appreciation IS 4.19Legg Mason Partners U.S. Large Cap Eq IS 4.06Royce Value Instl 2.81








Legg Mason Partners Target Retir 2015 C LMFCX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ Portfolio Target 2025 TR USD

















Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark







1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

0

10K



.............................................................................................-100 -50 0 50 100 Total 100.0


LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long


Western Asset Core Bond IS 23.02Global Opportunities Bond IS 15.53iShares MSCI EAFE Index 9.75Legg Mason Partners Intl All Cap Opp IS 6.91Legg Mason International Equity Inst Sel 6.73...........................................................................................................iShares Russell 1000 Growth Index 6.30Vanguard REIT Index ETF 5.26Legg Mason Partners Appreciation IS 3.41Legg Mason Partners U.S. Large Cap Eq IS 3.30Royce Value Instl 2.78








Legg Mason Partners CapInc C SBPLX....................................................................................................................................................................................................................................................................................................................................................BenchmarkDJ US Moderate Portfolio TR USD

Overall Morningstar Rating™ Morningstar Return Morningstar RiskQQ Below Average Above AverageOut of 948 Moderate Allocation funds. An investment's overall Morningstar Rating, based on its risk-adjustedreturn, is a weighted average of its applicable 3-, 5-, and 10-year Ratings. See disclosure for details.


The investment seeks total return.The fund primarily invests in equity and fixed income

securities of both U.S. and foreign issuers. It seek togenerate income and appreciation by allocating fund assetsto income and non-income producing equity and equityrelated securities, including common stocks, real estateinvestment trusts and convertible securities. The fund alsoinvests in investment grade and high yield fixed incomesecurities or unrated securities of equivalent quality alongwith options on security indices.




. . . .


Fund Inception Date 06-15-98Portfolio Manager(s) Robert I. Gendelman

Stephen A. WalshManagement Company Legg Mason Partners Fund


Benchmark Description: DJ US Moderate Portfolio TR USD

Dow Jones U.S. Moderate Portfolio Index: Is designed forasset allocation strategists (portfolio builders) who arewilling to take 60% of the risk of the U.S. securities market.It is a total returns index that is a time-varying weightedaverage of stocks, bonds, and cash. It is the efficientallocation of stocks, bonds, and cash in a portfolio whosesemideviation is 60% of the annualized 36 month historicsemideviation of the Dow Jones 100% Index.

Category Description: Moderate Allocation

Moderate-allocation funds seek to provide both capitalappreciation and income by investing in three major areas:stocks, bonds, and cash. These funds tend to hold largerpositions in stocks than conservative-allocation funds. Thesefunds typically have 50% to 70% of assets in equities andthe remainder in fixed income and cash.

Performance

15

30

45

60

0

-15

-30

-45


InvestmentBenchmark


YTD 1 Year 3 Year 5 Year 10 Year Since Inception-37.48 -37.95 -9.40 -2.23 0.51 0.46 Fund Return %-38.08 -38.49 -9.40 -2.23 0.51 0.46 Load-Adj. Return %-25.14 -25.38 -4.54 0.90 3.32 . Benchmark Return %-30.20 -30.61 -6.08 -0.53 1.24 . Category Average %................................................................................................................................................................................................................

. . Q QQ QQ . Morningstar Rating™






1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 11 - 08

25

20

15

5

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10K




LargeM

edSm

all

Value Blend Growth

HighM

edLow

Short Interm Long


US Treasury Bond (Fut) 12-31-08 6.23Currency Europe (Fut) 03-16-09 5.65General Electric Company 2.83Covanta Holding Corporation 2.23Crosstex Energy, Inc. 2.22...........................................................................................................J.P. Morgan Chase & Co. 2.02ASSALOY 1.88Kimberly-Clark Corporation 1.80FNMA 1.74Total SA ADR 1.68








Secur i t ies of fered through Paychex Secur i t ies Corporat ion . Member F INRA.

I nvestors should cons ider the investment objec t ives , r i sks , and charges and expenses of the investment

company carefu l ly before invest ing. The I nvestment Prof i les inc luded in th is pack age conta in th is and

other in format ion about the investment company. Refer to https://benefits.paychex.com for the funds’

prospec tus for addi t ional in format ion . P lease read th is in format ion carefu l ly before invest ing. I nvest-

ments are ne i ther insured nor guaranteed. I n addi t ion , the investment return and pr inc ipa l va lue of

these investments wi l l f luc tuate so that an investor ’s shares or uni ts , when redeemed may be wor th more

or less than thei r or igina l cost .

Past per formance i s not an indicat ion of future per formance. To v iew per formance cur rent to the most

recent month- end v is i t the appropr iate fund company webs i te as noted on each fund ’s I nvestment Prof i le

Page.

Bond pr ices are sens i t ive to changes in interest rates and a r i se in interest rates can cause a dec l ine in

the i r pr ices .

H igh y ie ld, lower- rated secur i t ies genera l ly enta i l greater mark et , c redi t/defaul t and l iquid i t y r i sks , and

may be more volat i le than investment grade secur i t ies .

I nternat ional invest ing involves spec ia l r i sks inc luding cur renc y r i sk , increased volat i l i t y, pol i t ica l r i sks

and d i f ferences in audi t ing and other f inancia l s tandards.

Not FDIC I nsured May Lose Va lue No Bank Guarantee

https://benefi ts.paychex.com154406 12/08

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