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SECURITY GUIDELINES Domestic Equities: Equity holdings may be selected from the New York, American, and Regional Stock Exchanges or the NASDAQ markets. These holdings must represent, companies meeting a minimum eapitalization requirement of $10 million with high markct liquidity. Only stocks that meet or exceed a credit rating of BBB from Standard & Poor's and/or a BBA-I rating from Moody's may be purchased. If a stock's rating should fall below these levels, it should be sold. The plan is prohibited from investing in private placements, letter stock, and options; or from engaging in short sales, margin transactions, or other speeialized investment aetivities. It is expected that no assets will be invested in securities whose issuers have filed a petition for bankruptcy. Domestic Fixed Income: Investments in fixed income securities will be managed actively to pursue opportunities presented by changes in interest rates, credit ratings, and maturity premiums. The Trustees may select from appropriately liquid preferred stocks, corporate debt securities, obligations of the U.S. Government, and its agencies and securities convertible to equities. These investments will be subject to the following limitations: 1. No issues may be purchased with more than 30 years to maturity. 2. Investments in securities of a single issucr (the exception of the U.S. Government and its agencies) must not exceed 5 percent of the market value of the portfolio. 3. Only corporate debt issues that meet or exceed a credit rating of BBB from Standard & Poor's and/or a BAAl from Moody's may be purchased. 4. Preferred stocks must be rated BBB or better by Moody's and/or Standard & Poor's at the time of purchase. 5. If any corporate bond or preferred stock's rating should fall below these ratings it should be sold. The Trustees are prohibited from investing in private placements and from speculating in fixed income or interest rate f1Jtures. These restrictions do not apply to mutual funds which may be uscd to reach Û1e plan's goals but may have less restrictive investment policies. Cash and Equivalents: The Trustees may invest in Federal Funds, Treasury Bills, Certificates of Deposit, and money market funds to provide income, liquidity for expense payments, and preservation of the account's principal value. The Trustees may not purchase short-term financial instruments considered to contain speeulative characteristics (uncertainty of principal and/or interest). The Trustees also may not invest more than 5 percent of the portfolio market value in the obligations of a single issuer, with the exception of the U.S. Government and its agencies. 4