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<br />2. The total expectcd return should excced 5% annually. <br /> <br />3. Sufficient liquidity shall be maintained to pay service pension obligations. <br /> <br />Understanding that a long-term positive correlation exists between performance volatility (risk) and <br />expected returns in the seeurities markets, the following short-term objeetive has been established: <br /> <br />The portfolio should be invested to minimize the likelihood of low or negative total <br />returns, defined as a one year return worse than negative 15%. It is anticipated that a loss <br />greater than this will occur no more than one out of every twenty years. <br /> <br />INVESTMENT POLICIES AND RESTRICTIONS <br /> <br />The investment policies and restriction presented in this statement serve as a framework to help the <br />Trustees achieve the investment objectives at a level of risk deemed acceptable. These policies and <br />restrictions are designed to minimize interfering with the Trustees efforts to attain overall objectives, and <br />to minimize excluding them from appropriate investinent opportunities. The policy allows the Trustees <br />discretion in the asset allocation and diversification of the assets for the purpose of increasing investment <br />returns and/or reducing risk exposure within stated objectives of the plan. The Trustees have broad <br />responsibility to shift the commitment of assets among asset classes, industry sectors, and individual <br />securities to pursue opportunities presented by long-term secular changes within the capital markets. <br /> <br />Asset Allocation: <br /> <br />The following allocation of assets is to be a guideline for investment decisions. <br /> <br />Target Asset Mix Table: <br /> <br />Asset Class <br />Equities <br />Fixed Income <br />Cash and Equivalent <br /> <br />Minimum <br />Weight <br />15% <br />25% <br />0% <br /> <br />Target <br />Weight <br />50% <br />48% <br />2% <br /> <br />Maximum <br />Weight <br />75% <br />85% <br />60% <br /> <br />Equities (including all convertible securities) may represent up to 75 percent of the account's market value. <br />with a minimum requirement of 15 percent. <br /> <br />Fixed Income securities (including preferred stocks) are not to exceed 85 percent of the account's market <br />value, with a minimum requirement of 25 percent. <br /> <br />Cash equivalents (including all senior debt securitics with under one year to maturity) may be held to a <br />maximum 60 percent of the account's market value. <br /> <br />3 <br />