OBJECTIVE

To obtain the maximum return available while attempting to limit potential loss in any one year to less than 15% over the long-term life of the portfolio.

ASSET ALLOCATION

Based on the last 32 years of market data, average annual return is highest with only a 5% chance that the portfolio will suffer a loss more than 15% in any single year with an asset mix of:

Target	Asset Class	Benchmark
40%	Domestic Large Capitalization Stocks	S&P 500
30%	International Large Capitalization Stocks	MSCI EAFE
10%	Domestic Small Capitalization Stocks	Russell 2000
80%	Total Stocks
20%	Domestic Bonds, REITs and Money Markets	Lehman Bros. Aggregate Bond Index
100%	Total Portfolio

This portfolio would be expected to achieve a 1% to 23% average annual return over a period of at least 5 years. During the past 32 years a portfolio with this asset allocation would have had a single worst year loss of -29.4% and worst five year average annual return of -2.5%. However, past performance is no guarantee of future returns.

The plan portfolio will be rebalanced to within 5% of the above allocation quarterly.

INVESTMENT SECURITIES

The above asset allocation will be achieved through the purchase of mutual funds or exchange traded funds to maximize diversification. Due to the inability to efficiently evaluate individual securities, the purchase of individual stocks and bonds will not be made (with exception of U.S. Treasuries).

Purchase Criteria to be used in the selection of these funds will be:

1. Fund must have had the same primary manager for the last 5 years, except for index funds.
2. Fund must have at least matched it’s benchmark index over the last 5 year period and have a superior risk adjusted return as indicated by a positive alpha or not worse than -1%.
3. Funds held must have a turnover of less than 30% or 100% for small capitalization stock funds.
4. Fund must have a total annual expense ratio under 1% or within the lowest 10% of funds in the asset class if none under 1% are available.
5. Fund must be available on a no load or low load basis.

Sell Criteria to be used in triggering the sale a fund in the portfolio are:

1. Funds with a change in primary manager will be sold as soon as practicable within the subsequent quarter (except for index funds).
2. Funds failing above criteria 2, 3 and 4 for four consecutive quarters will be sold as soon as practicable within the subsequent quarter.

POLICY REVIEW

It is intended that unless the Objective is changed this policy will not need significant revision for a 5 year period. Upon the policy’s 5 year anniversary it will be reviewed for necessary changes.