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SmartMoves IMPORTANT INFORMATION REGARDING YOUR RETIREMENT SAVINGS PLAN We are extremely pleased about exciting changes to our retirement program, which will become effective December 1, 2007. The goal of the All Children’s Health System, Inc. 403 (b) Savings Plan is to provide a cost-effective retirement program with state-of-the-art financial education programs and investment options. Over the past several months, we have conducted a comprehensive review of proposals and corresponding plans from several vendors to select a single recordkeeper and service provider for all of All Children’s Health System, Inc. The results of the competitive process determined that Diversified Investment Advisors will assume the role of recordkeeper and an investment fund provider and will provide on-site employee retirement education services. Questions & Answers Why are changes being made to the plan? We believe that the movement from individual 403(b) contracts, our existing model, to a group contract/plan will be beneficial from both a fee and investment opportunity basis. In our negotiations with Diversified, we were able to put together an outstanding array of funds throughout all investment categories. We were also very attuned to the fee structure that you were investing in and believe that we have done extremely well in balancing fees versus service. Having multiple providers creates numerous administrative and compliance issues, and consolidating these diverse programs into one program will streamline plan administration. As previously communicated, Diversified will assume the role of sole recordkeeper and an investment fund provider for the All Children’s Health System, Inc. 403 (b) Savings Plan beginning December 1, 2007. We believe these changes will help simplify and encourage your active participation in saving and planning for your retirement. Why was Diversified chosen as service provider to the All Children’s Health System, Inc. 403(b) Savings Plan? There are many factors to consider when selecting a provider, just as there are many fine providers to choose from. All Children’s Health System, Inc. felt that Diversified offered the best overall package of services. Some areas in which Diversified ranked highly include: Experience: Diversified has been in the retirement plan business for over 50 years. Retirement plans are its only business. Diversified has a track record of innovation and quality service that makes it one of the nation’s leading retirement plan companies. Investments: Diversified employs a unique process for the selection and monitoring of investment managers. In addition to its own funds, Diversified will offer several funds from other investment companies. See the chart on page 5. Participant Communications: All Children’s Health System, Inc. believes that Diversified’s participant communication services are very valuable. Our goal is to improve retirement planning education. Diversified ranks high in its ability to help accomplish that goal. Plan Management, Technical and Recordkeeping Services: Diversified operates its own recordkeeping system, maintained by over 100 system analysts, to ensure the most efficient management of plan records. Diversified also has an extensive technical staff to assist us with compliance regarding the many regulations that apply to retirement plans. Who is Diversified? Diversified is a national investment advisory firm with a singular focus – retirement plans. Diversified’s investment products and educational resources are designed specifically to make retirement planning easy to understand. Whether you are a financial expert or just entering the world of investing, you will receive informative and detailed educational materials. With Diversified’s resources, you will plan with confidence and take advantage of a wide range of financial options. The funds chosen for the retirement program were selected from a wide universe of funds. To develop the specific fund lineup for All Children’s Health System, Inc., both a quantitative and qualitative screen was used to identify best-in-class mutual funds across all asset classes. The mutual fund universes are screened for quantitative measures such as performance vs. peers, standard deviation, risk-adjusted performance, and expenses. Some examples of the qualitative screens include determining if the funds are well diversified, confirming the funds are appropriately classified, and reviewing the tenure of the current portfolio management team. As a result, we are able to access the best-in-class mutual funds from the following fund families: Fidelity Investments, American Funds, American Beacon, Columbia, Morgan Stanley, and Dodge & Cox. Diversified takes a modern approach to retirement planning. As a leading provider, it has designed comprehensive programs that proactively guide and educate participants about investing, retirement planning and managing the financial demands of life events, such as job changes and college funding. You will be pleased to know that after a lengthy and comprehensive market assessment, Diversified was awarded the American Hospital Association’s (AHA) exclusive endorsement for their defined contribution and deferred compensation retirement programs. The AHA endorsement seal indicates that Diversified Investment Advisors' defined contribution and deferred compensation retirement services are endorsed by the American Hospital Association. Diversified has been reviewed by AHA Solutions for quality, integrity, innovation, stability, and flexibility. AHA Solutions, Inc., a subsidiary of the American Hospital Association, is compensated for use of the AHA marks and for its assistance in marketing endorsed products and services. By agreement, pricing of endorsed products and services may not be increased by the providers to reflect fees paid to the AHA. AHA’s endorsement relates to the general retirement services of Diversified and does not relate to any particular investment option available through Diversified or distributed by Diversified’s affiliate, Diversified Investors Securities Corp. When will the plan be made available? Preparations for the implementation of the new All Children’s Health System, Inc. 403(b) Savings Plan with Diversified have already begun. The plan becomes effective on December 1, 2007. For those employees who are currently contributing to a 403(b) program administered by VALIC, Nationwide, or Lincoln, with the payroll period beginning on November 25, 2007, all new 403(b) contributions can only be deposited in our plan serviced by Diversified. What do I need to do? Do I need to complete an enrollment form for Diversified? If you are already a participant in the All Children’s Health System, Inc. 403 (b) Savings Plan, formerly known as the All Children’s Health System, Inc. TaxDeferred Annuity Plan, you do not need to complete an enrollment form. Your ongoing salary deferral percentages will be automatically moved to Diversified. However, effective November 25, 2007 you may change your investment elections by visiting Diversified DirectSM Online at www.divinvest.com or by calling Diversified DirectSM at 800-755-5801. If you do not change your investment elections by December 7, 2007, new contributions will thereafter be invested in PortfolioXpressSM. (See page 4 for more information on this feature). If you are currently contributing a flat dollar amount, please see an HR representative or Diversified onsite representative. 2 Representatives from Diversified will be on site to assist you in reviewing the investment options available. Can you tell me more about the transfer of my existing account balance? Contract exchange transfers are permitted from VALIC, Nationwide, and Lincoln. Transferring your existing balance to Diversified will allow you to consolidate your retirement savings under one plan. Representatives from Diversified will be available to answer any questions you may have regarding transferring your account. Individual meetings with employees are also available. In some cases, you may incur a sales charge (i.e. surrender charges, back-end loads, etc.) for transferring your account from your current provider. However, if you request a contract exchange from your current provider by June 30, 2008, Diversified will make your account whole at the time the transfer is processed. After June 30, 2008, any transfers from VALIC, Nationwide, or Lincoln will be subject to the applicable sales charges aligned with your investments in these plans. The sales charges that Diversified assumes on behalf of the plan participants who transfer existing funds prior to June 30, 2008 will be amortized (spread) over the next five years in the plan service charge. Will there be any changes to the current plan design? Yes, the following changes have been made to the current plan design: Loan Repayment Method: Currently loan repayments are made through coupon; effective December 1, 2007, all loans processed through Diversified will be repaid through payroll deduction. Maximum Number of Loans Available: Currently, the plan allows for two loans outstanding at a time; effective for loans applied for on or after December 1, 2007, the plan will allow only one loan to be outstanding at a time. Terminating Participants Continuing to Make Loan Repayments: Currently, if you have an outstanding loan and you terminate employment, you can continue to pay off your loan; effective for loans made on or after December 1, 2007, terminated participants will no longer be allowed to make regular repayments to an outstanding loan, but must repay the loan in full within sixty days of termination of employment or the outstanding balance will be defaulted. Plan Deferral Amounts: Currently the plan allows you to elect a dollar amount or a percentage of your pay to be deferred to the 403(b) plan; effective December 1, 2007 only a percentage of your pay will be available for deferral to the retirement plan. What if I have an outstanding loan? If you have an outstanding loan with VALIC, Nationwide, or Lincoln, there will be no change in the repayment process. Loan repayments will continue to be paid to the applicable vendor as usual (per your loan agreement). Will Diversified send me statements on my account? Yes. Diversified will send you a statement of your account quarterly, each January, April, July, and October. Will I be able to attend educational meetings that describe these enhancements to our program? Yes. Group meetings and individual appointments are scheduled for October and November, 2007. Should you have any questions regarding theses changes you may contact Diversified DirectSM at 800-755-5801. Meeting dates, locations, and times are shown in the Calendar of Key Dates on page 4. During these meetings, Diversified representatives will provide education and retirement planning information, describe the plan’s new investment options, and answer questions. We strongly encourage you to attend one of these meetings. How much can I contribute? You generally may defer up to 75% of your pay in the plan’s 403(b) feature, subject to a $15,500 IRS deferral limit in 2007 or any plan-imposed limit, whichever applies. The IRS limits the amount that employees can save on a pre-tax basis every year. However, eligible participants who are age 50 or older during the calendar year may also make a special “catch up” contribution of up to $5,000 in 2007. In general, catch up contributions are salary deferral contributions that exceed the IRS annual dollar limit ($15,500 for 2007) or the plan imposed limit, whichever applies. Is All Children’s Health System, Inc. Still Matching Our Deferrals? Yes, All Children’s Health System, Inc. provides a generous matching contribution of 50% on the first 6% contributed, up to a maximum of 3% of eligible pay. (1) 3 Who should I contact if I have questions during the conversion? You may contact a Diversified Customer Contact Center representative at 888-676-5512. Representatives are available Monday through Friday from 8:00 a.m. to 9:00 p.m. ET. In addition, representatives from Diversified will be on site to answer any specific questions you may have regarding the conversion. You will also have access to a pre-conversion website with links to important information related to the conversion. You may access this website at: http://www.divinvest.com/conversion/achs/index.htm. What is PortfolioXpress? PortfolioXpress(2) is a service made available through Diversified that establishes and regularly rebalances your investment allocation, using a series of asset allocation mixes based on the funds available in your plan. Your retirement plan assets are invested in an asset allocation mix that is appropriate for your selected retirement year, and PortfolioXpress adjusts your asset allocation to a more conservative mix as yo0u get closer to retirement. (1) Matching contributions are subject to plan vesting requirements. Descriptions of plan features and benefits are subject to the plan document. The plan document will govern in the event of any inconsistencies. PortfolioXpress presents a series of asset allocation models up to and through a designated retirement year. The participant is solely responsible for selecting the retirement year. In implementing the service, the participant agrees to each of the asset allocation mixes, and each of the automated rebalancing transactions that will take place over time within the account as the participant approaches a selected retirement year. Although the PortfolioXpress service is offered at no additional cost, the participant will continue to bear the fees of the underlying funds in which the account is invested. Form ADV Part-II contains additional information about Diversified's investment advisory products and services, and can be found at www.divinvest.com. (2) Key Dates - All Children’s Health System, Inc. 403(b) Savings Plan Date October 29, 2007 - November 16, 2007 Service Diversified representatives will be on site during these days. Please check schedules posted throughout your location. Changes to investment fund elections can be made at Diversified. Last day to make investment allocation changes at Diversified for December 9th payroll. If you do not make an investment election, your contributions will be invested in PortfolioXpress. Access your account to view and make any deferrals or fund changes. Your first statement will be mailed. November 25, 2007 December 7, 2007 December 9, 2007 Week of January 7, 2008 Individual appointments will be available between the scheduled group meetings. 4 Investment Lineup Investment Options Ticker Symbol N/A Diversified Guaranteed Pooled Fund (3) (4,5,6,7) PARRX PIMCO Real Return Admin Fund DVTRX Diversified Investors Total Return Bond Fund (4,5) NYVTX Davis NY Venture A Fund (8) DSKIX Diversified Investors Stock Index Fund (9) (6,7,9) RGACX American Funds Growth Fund of America R3 AAGPX American Beacon Large Cap Value Plan Ahead Fund (7,9) DIMVX Diversified Institutional Mid-Cap Value Fund (10,11) OPMSX Oppenheimer Main Street Small Cap A Fund (10) COVAX Columbia Small Cap Value II A Fund (10) Morgan Stanley Institutional Mid Cap Growth Adv Fund (7,10) MACGX FDSCX Fidelity Small Cap Independence Fund (7,10) DODFX Dodge and Cox International Stock Fund (7) AIIEX AIM International Growth A Fund (7) ACINX Columbia Acorn International Z Fund (7,10) All registered investment funds are available by prospectus only. You will receive a prospectus for any registered fund in which you invest. A prospectus may also be obtained for any registered fund by contacting Diversified at 888-6765512. The prospectus contains additional information about the funds, including the investment objectives, risks, charges, and other expenses. Please read and consider the investment objectives, risks, charges, expenses and other information in the prospectus carefully before investing. Please note that certain Investment Funds may impose trading restrictions and/or redemption fees as a result of frequent trading activity. If a prospectus is issued for any Investment Fund in which you invest, please read it carefully to determine if such Fund imposes any trading restrictions or redemption fees. The Diversified Funds are offered by Diversified Investors Securities Corp. (DISC), 4 Manhattanville Road, Purchase, NY 10577. Any non-Diversified fund offered under a Plan is distributed by that particular fund’s associated fund family and its affiliated broker-dealer or other broker-dealers with effective selling agreements, such as DISC. Diversified, DISC and TFLIC (mentioned below) are affiliated companies, but are not affiliated with All Children’s Health System, Inc. (3) (4) (5) (6) (7) The Diversified Guaranteed Pooled Fund is a pooled separate account offered through Transamerica Financial Life Insurance Company (TFLIC), 4 Manhattanville Road, Purchase, NY 10577, which provides the guarantee of principal and interest. Any US Government guarantees of the securities held in this investment fund only pertain to those securities and not the Fund or its yield. Bonds and bond funds are subject to interest rate risk, credit risk and inflation risk. Interest rate risk means that the value of bonds and bond funds generally falls when interest rates rise, causing an investor to lose money upon sale or redemption Lower rated, high yield corporate debt securities represent a much greater risk of default and tend to be more volatile than higher rated or investment grade bonds. Foreign securities and markets pose different and possibly greater risks than those customarily associated with domestic securities, including currency fluctuations and political instability. The risks in Davis New York Venture Fund include market risk, company risk: the market value of a common stock varies with the success or failure of the company issuing the stock; and financial services risk: investing a significant portion of assets in the financial services sector may cause a fund to be more volatile. Securities within the financial services sector are more prone to regulatory action in the financial services industry, more sensitive to interest rate fluctuations, and are the target of increased competition. (9) Large cap equity funds, unlike bond funds, invest in equity securities, which include common stock, preferred stock and convertible securities. Because such securities represent ownership in a corporation, they tend to be more volatile than fixed income or debt securities, which do not represent ownership. (10) The securities of small and medium-sized companies, because of the issuers' lower market capitalization, may be more volatile than those of large-sized companies. (11) Value-based investments are subject to the risk that the broad market may not recognize their intrinsic values. (8) 5 SmartMoves IMPORTANT INFORMATION REGARDING YOUR RETIREMENT SAVINGS PLAN PT-5434-AC (10/07) 4 Manhattanville Road, Purchase, NY 10577