Frequently Asked Questions (F.A.Q.)

1. I have a check that I did not cash. Can I still cash it?

   The Fair Fund Distribution is now closed. Any checks presented for payment will be returned by the bank.

2. I lost my check can it be reissued?

   The Fair Fund Distribution is now closed. Checks can no longer be issued.

3. Who can I speak to if I have any questions about the settlement?

   The PBA Fair Fund call center is now closed. The FAQ section of this website should answer any settlement related questions you may have.

4. What is the total dollar amount of this settlement?

   The total dollar amount of this settlement is $250 million. Pilgrim Baxter & Associates, Ltd. (PBA) was ordered to pay $40 million in disgorgement and $50 million in a civil penalty for distribution to affected accountholders. Gary L. Pilgrim and Harold J. Baxter each were ordered to pay $60 million in disgorgement and $20 million in a civil penalty for distribution to affected accountholders.

5. Who is paying for this settlement?

   The money for this settlement ($250 million) came entirely from Pilgrim Baxter & Associates, Ltd., Gary L. Pilgrim and Harold J. Baxter. All costs associated with this settlement are borne proportionally by Liberty Ridge Capital ("LRC"), Mr. Pilgrim and Mr. Baxter, and not by the PBHG Funds or fund accountholders.

6. What is "market timing"?

   Market timing includes (a) frequent buying and selling of shares of the same mutual fund or (b) buying or selling mutual fund shares in order to exploit inefficiencies in mutual fund pricing. Market timing, while not illegal per se, can harm other mutual fund accountholders because it can dilute the value of their shares if the market timer is exploiting pricing inefficiencies, or disrupt the management of the mutual fund's investment portfolio and can cause the targeted mutual fund to incur costs borne by other accountholders to accommodate frequent buying and selling of shares by the market timer.

7. The former PBHG Funds (now Old Mutual Funds) are currently advised by Liberty Ridge Capital Management. Does this change affect the terms of the settlement?

   No, this change had no effect on the implementation of the terms of this settlement.

8. What was the Pilgrim Baxter & Associates response to the settlement?

   Throughout the settlement process, the priority of PBA has been to work in close cooperation with the regulators to ensure that the interests of the accountholders were protected. They believe that these agreements, along with other measures that have been taken by the advisor in recent months, bring significant long-term benefits to accountholders of the PBHG Funds. For additional information regarding this question, please refer to the following websites:

   https://investors.oldmutualfunds.com/utilities/legal/regulatory-updates.aspx
   http://www.omfunds.com/inside/Settlement_QA.pdf

9. What has Pilgrim Baxter & Associates (Liberty Ridge Capital) done to ensure this does not happen in the future?

   Strict protocols to combat market timing in the PBHG Funds are now fully disclosed in the prospectuses governing the funds, and the implementation of new redemption fees, effective on June 1, 2004; serve as an additional and highly effective deterrent against the short term trading of funds. These policies were designed and implemented to serve the interests of long-term investors by seeking to eliminate opportunities for market timers to profit from the rapid short-term trading of the funds.

   In addition to the requirements of the settlements, significant reforms have been introduced under the new leadership of the firm, all of which provide additional protections to benefit accountholders:

   • To deter market timers, 2% redemption fees are being applied as outlined in the prospectus effective June 1, 2004 for PBHG Funds sold within 10 days of purchase, with all fees paid directly into the funds;
   • Prospectuses for the PBHG Funds have been amended to include detailed disclosure of the firm's stringent anti-market timing protocols and practices to combat market timing;
   • An enhanced code of ethics governing all employees at Liberty Ridge Capital has been adopted to prohibit any investments by employees that could create conflicts of interest with fund accountholders, including mandatory minimum holding periods for investments in certain PBHG Funds;
   • The capacity of the advisors legal and compliance staff has been expanded to ensure that sufficient resources are dedicated to oversight of employee investments and overall compliance monitoring;
   • A new uniform policy on the disclosure of fund holdings has been adopted, with full portfolio holdings for the for the PBHG Funds made publicly available on the PBHG Funds website 15 days after each quarter end; and
   • An independent audit of the company's internal controls and procedures has been conducted to ensure that the firm's practices comply with new reforms.

10. How were each of the settlement payments calculated?

    The methodology for developing the plan for calculating and distributing the settlement proceeds to affected accountholders was set forth by the Independent Distribution Consultant (IDC) and approved by the Securities and Exchange Commission (SEC).

    Individual accountholders of certain PBHG funds may be entitled to a prorated share of their fund's daily settlement proceeds, as determined by the plan.

    For further, in-depth information regarding the methodology used to calculate these payments, please view the approved Distribution Plan at the link below: http://www.sec.gov/litigation/admin/2006/34-54812-dp.pdf.

11. What controls were in place to ensure that all accountholders received the amount of the distribution to which they are entitled?

    At each step in the calculation process, in-depth reviews and formal validations were conducted under the supervision of the Independent Distribution Consultant.

12. How will this settlement affect my tax reporting?

    For tax information related to this settlement, please refer to the "Tax Information" section of this Website.

    As always, you should consult your financial advisor or tax professional to determine the potential tax consequences and appropriate tax treatment for your situation.

13. What happens to the money that remains unclaimed by eligible accountholders?

    When the IDC declares that the settlement period has ended, any distribution checks that remain uncashed shall be distributed to the PBHG Funds based on the proportion of aggregate excess profits by market timers accounted for by each fund. For example, the proportion of aggregate excess profits earned by market timers in the Growth Fund was 68.1% of the total excess profits. If $20 million remains uncashed at the end of the settlement period, then $13.62 million will be distributed to the PBHG Growth Fund ($20 million x 68.1%).