MUTUAL SERIES FUNDS'
MICHAEL PRICE ET AL.
(continued from preceding page)

We're highly incentivized for our funds to perform well....
   Michael Price: The structure of the merger was designed to ensure continuity of management - because you don't fix what isn't broken. We're all staying five years or more. We're all very happy doing what we're doing.
   And we're highly incentivized for the funds to do well, both in terms of money invested in the funds and performance incentives for the funds to do well - not just in growth in assets, but [investment] performance - because we know that if you don't perform well, you're not going to grow your assets whether you're a load group or a no-load group.

We believe in this place and this approach going forward.
   Price: So we are all absolutely big believers. I think I'm the biggest believer in this place going forward. And that's why I was willing to structure the merger with a very large investment in the ongoing company. My family already has a lot of money in [the funds at] Mutual - and we're going to have a lot more in Mutual - because we're believers in this approach to investing.
   Some of the people here have been shareholders for 10, 20, 30 and 40 years. Ernie Low is here. He's been a shareholder since the early 1950s. He's an old friend of Max [Heine]'s.
   He knows that this approach works. And these fellows who have been working in this approach for 8-10 years are huge believers.
   So I don't see any changes because of the merger - any difference in what we do for a living - [which is] to put the money to work well. The whole goal is to compound at 15% with less risk than the market in general.

We spend our time appraising companies and waiting.
   Price: As many of you know, we get here with a three-pronged approach. First, we invest in stocks based on their asset values.... So we spend our time trying to figure out what companies are worth. And then we just wait for the market to hand them to us 30-40% cheaper than that. That's roughly half or two-thirds of your money depending on the market.

Second, securities of distressed/bankrupt companies.
   Price: The other third of the money is in cash, which is ammunition, and in claims against bankrupt companies - which is a very fertile way to create cheap common stocks. And in this country, the bankruptcy process works very, very well. It's efficient. Companies go in - and they come out. They don't get liquidated too often.
   And through buying bank loans and trade claims and publicly traded bonds at large discounts from their par value, we're able to create the new company's equity - like we did in Sunbeam - very, very cheaply.

Third, mergers, takeovers and liquidations....
   Price: Third, we invest in companies involved in mergers, takeovers and liquidations. We've done that for a very long time. And that's been a very busy area this year.

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