Frequently Asked Questions Regarding Escheatment

These Frequently Asked Questions ("FAQs") regarding escheatment are being provided as a service to our shareholders and prospective shareholders. The FAQs are designed only to give general information on the issues covered. It is not intended to be a comprehensive summary of recent developments in the law governing escheatment, to exhaustively address the complex subject, provide legal advice, or render a legal opinion.

What is Escheatment?

Each state has laws that require financial institutions to turn over abandoned property to the state. The process of turning over abandoned property to the states is called escheatment.

What is considered abandoned property?

Depending upon the state in which your account is registered, abandoned property may be defined as one or more of the following categories:

• Inactivity Only - The account is considered abandoned if there is no contact on the account during the timeframe, or dormancy period, established by the state.
• Returned Post Office (RPO) Only - The account is considered abandoned solely because the address on the account has been deemed undeliverable by the United States Postal Service.
• Returned to Post Office (RPO) and Inactivity - The account is considered abandoned because there has been no contact made on the account and the address has been deemed undeliverable by the United States Postal Service.
• Returned Post Office (RPO) or Inactivity - The account is considered abandoned because there has been no contact made on the account or the address has been deemed undeliverable by the United States Postal Service.

Where is my account considered registered?

The state in which your account is registered is usually the state of the owner's last known address. This is also, generally, the state of residence listed on your Clipper Fund account(s).

Inactivity Regulation - What is Inactivity?

State inactivity laws have been in place for many years. However, some states are becoming more aggressive by enforcing their inactivity provisions or reducing dormancy periods, requiring financial institutions to turn over shareowner's assets sooner. These regulations require account owners, including mutual fund shareholders, to make contact with their fund companies on a regular basis. What constitutes contact and how frequently the contact must occur varies depending on the state in which the account is registered and the type of assets or type of account. Generally, property is considered abandoned after a period of 3 - 5 years of inactivity or "no contact".

When could my account be considered abandoned property requiring my investment in Clipper Fund to be turned over to the state?

Generally, property is considered abandoned after a period of 3-5 years of inactivity or "no contact." However, unclaimed property laws and regulations are dynamic and often change with short notice. Please see your State's Unclaimed Property Department's website for more information regarding state abandoned or unclaimed property laws.

I live in a foreign country. Why did I receive a notice about escheatment?

Abandoned property accounts with foreign registrations are required to be turned over to the state where the mutual fund is incorporated. The Clipper Fund is incorporated in Delaware. If you have a foreign registration on your account and you received an escheatment notice from Clipper Fund, it will be subject to escheatment under the requirements of the state of Delaware, U.S.A.

What do the escheatment laws and regulations consider contact or activity with my Clipper Fund account?

Although each state may have different laws and regulations for considering when an account is deemed active, we accept the following actions to maintain an active status:

• Log into your Clipper Fund account online.
• Call our automated phone system, which is available 24 hours a day, 7 days a week, at 1-800-432-2504 and check your account balance or update any needed information for your account.
• Contact one of our Investor Service Representatives on our toll-free number 1-800-432-2504. Our hours are Monday-Friday from 9:00 am to 6:00 pm, Eastern Time.

Any transactions you effect within your account will generate an activity record on your account. If you share familial accounts or accounts of various types and registrations (i.e., IRAs, UGMAs), you should initiate contact for each type and registration.

How often do I need to contact you to keep my account in an "active" status?

We suggest that you contact us at least annually; however, the applicable state law for your state will dictate the frequency.

I am enrolled in an automatic investment or redemption program. Is that considered contact?

Unfortunately, state regulations may not consider automatic investment or redemption plans to count as contact on your account. If this is your only investment activity, you will need to establish contact by one of the methods listed above.

I reinvest my dividends and capital gain distributions. Why is this not considered activity?

Various states disallow the reinvestment of dividends and capital gains as evidencing "activity" on a mutual fund account. This is due to the routine, automatic nature of these transactions that can occur with or without the owner's knowledge.

What if I do not contact Clipper Fund?

If you do not contact us within the time period specified in the state in which your account is registered, we will make attempts to contact you by mail, through your registered representative, or attempting to contact you by phone. However, if these efforts are unsuccessful, we may be required to escheat your account(s) to the applicable state of your registration.

What is the easiest way to maintain contact on my Clipper Fund account(s)?

The easiest way to maintain contact with us is to access your account(s) online by logging into your account(s) through Clipper Fund's website at least annually or by speaking to one of our Investor Service Representatives by calling 1-800-432-2504 Monday through Friday from 9:00 a.m. to 6:00 p.m., Eastern Time. If you are calling before or after business hours, you can access your account using our automated voice response system.

What happens if my Clipper Fund account is escheated to the state?

For Non-Foreign accounts, if your account is escheated, your full account balance will be turned over to the state of your last known address. You will then need to contact the state to which your account is escheated to establish your ownership of the funds and request that the funds be returned to you. If your account is escheated, please see your State's Unclaimed Property Department's website for information on recovering escheated financial assets or unclaimed property. For Foreign accounts, it will be the state in which the fund they invested in is incorporated, which is Delaware. Please note that there may be a fee assessed by the state in order to claim the assets.

Where can I find more information about the abandoned property laws of my state?

Please see your State's Unclaimed Property Department's website for more information regarding state abandoned, or unclaimed, property laws.