Beacon Management Corp.

Meka-MV

The Meka-MV program is a moderate-volatility version of Meka. The most significant differences in Meka-MV from Meka are that (i) the target volatility of Meka-MV is approximately half as much as it is for Meka, and (ii) Meka-MV does not trade futures contracts on equity indices. Under the Meka-MV program, the amount of funds normally committed as margin for commodity futures contracts averages 20% to 25%. However, under certain conditions the amount committed as margin may be substantially higher. The largest peak-to-valley drawdown in the Meka-MV trading program occurred from December 1999 to March 2000 and was 8.1%. Largest peak-to-valley drawdown is the largest percentage trading loss that occurred, as measured from any month-end net asset value, without such month-end net asset value being equaled or exceeded as of any subsequent month-end by the trading program on a composite basis, expressed as a percentage of total equity. Beacon has not made changes to Meka-MV, which, by themselves, would significantly increase or decrease the volatility of trading under the program. The trading approach used in the future to trade customer funds will be the same as has been used to trade the Meka-MV program since its inception. No assurance can be given, however, that Meka MV's trading results will not be more or less volatile than in the past.