By executing the Adoption Agreement, the Depositor establishes with the Custodian an individual retirement account as described in Section 408(a) of the Internal Revenue Code to provide for his retirement and the support of his beneficiaries after death.


1.1 Gender and Number. Except as otherwise clearly indicated by context, the masculine shall include the feminine and the singular shall include the plural, and vice-versa.

1.2 Terms used herein with an initial capitalized letter shall have the following meanings:

"Account" means the individual retirement custodial account established by the Depositor under this Agreement.

"Adoption Agreement" means the application form furnished by the Custodian and executed by the Depositor that implements this Agreement. The Adoption Agreement is an integal part of the Agreement.

"Age" means, for any individual, his age on his last birthday, except that an individual attains Age 59 1/2 or Age 70 1/2 on the corresponding date in the sixth calendar month following the month in which his 59t or 70th (respectively) birthday falls (or the last day of such sixth month if there is no such sixth month if there is no such corresponding date therein).

"Agreement" means the individual retirement custodial agreement as set forth herein and in the Adoption Agreement, as each may be amended from time to time.

"Code" means the Internal Revenue Code of 1986, as amended.

"Contribution" means a Regular Contribution, a Rollover Contribution or a SEP Contribution.

"Custodian" means the entity designated in the Adoption Agreement as the Custodian hereunder. The Custodian shall be a bank (as defined under Section 408(n) of the Code) or another person who has been approved by the IRS to serve as a custodian for individual retirement accounts under Section 408(a) of the Code.

"Depositor" means the individual who has established the individual retirement account hereunder.

"Designated Beneficiary" means the person or persons designated under Article III to receive assets in the Account after the Depositor's death.

"Regualr Contribution" means a Contribution to the Account other than a Rollover Contribution or a SEP Contribution.

"Regulations" means the final, temporary and proposed regulations promulgated by the Internal Revunue Service under the Code.

"Required Beginning Date" means, for any individual, the April 1 of the calendar year immediately following the calendar year in which such individual attains Age 70 1/2.

"Rollover Contribution" means a Contribution to the Account by the Depositor which consists of funds distributed from a individual retirement plan or other tax-qualified retirement plan which satisfies the requirements of Section 402(c), 403(a)(4), 403(b)(8) or 408(d)(3) of the Code.

"SEP Contributione" means a Contribution to the Account on behalf of the Depositor by the Depositor's employer under a simplified employee pension as described in Section 408(k) of the Code.

"Sponsor" means Mesirow Financial.

2.1 Regular Contributions. The Depositor may make Regular Contributions to the Account for each tax year. Regular Contributions shall be made in cash or by chsck and shall not exceed $2,000 for each tax year of the Depositor. Regular Contributions in property other than cash or check are not permitted. A Regular Contribution is deemed made by the Depositor on the last day of a particular tax year if (a) it is made not later than the time prescribed by law (not including extensions) for the filing of the Depositor's federal income tax return for such year and (b) it is ifrrevocably specified in writing to the Custodian by the Depositor that the contributions are for such tax year.

2.2 Rollover Contributions. The Depositor may make Rollover Contributions at any time. Rollover Contributions shall consist of cash or any other property acceptable to the Custodian and the Sponsor in their discretion. The Custodian and the Sponsor shall be under no obligation to accept any Rollover Contribution consisting of assets other than cash. The Depositor shall complete and execute such forms as may be required by the Custodian and/or the Sponsor prior to making the Rollover Contribution.

2.3 SEP Contributions. SEP Contributions may be made in cash or by check on behalf of the Depositor by the Depositor's employer. SEP Contributions for each year may not exceed the amount provided under Section 408(j) of the Code.

2.4 Responsibility of Depositor. The Depositor has the sole responsibility for determining wheher a Contribution qualifies as a Regular Contribution, a Rollover Contribution or a SEP Contribution and whether a Contribution is deductible for Federal income tax purposes.

2.5 Responsibility o Custodian and Sponsor. Neither the Custodian nor the Sponsor shall have any responsibility for determing whether a Contribution qualifies as a Regular Contribution, a Rollover Contribution or a SEP Contribution or for determining whether a Contribution is deductible for Federal income tax purposes.


3.1 Distributions at Discretion of Depositor. Subject to the porvisions of this Article, the Custodian shall distribute the assets of the Account to the Depositor at such times and in such manner as the Depositor shall direct. 3.2 Form of Distribution. Distributions shall be in cash or in kind, as the Depositor shall elect, provided, however, that any assets which cannot be sold by the Custodian shall be distributed in kind. 3.3 Commencement of Distibutions. The Depositor's entire Account shall be distributed or commence to be distributed no later than the Depositor's Required Beginning Date. 3.4 Method of Distributions. The Depositor may elect on a form provided by the Custodian for that purpose, to have distributions required under Section 3.3 paid as follows:

1. a single-sum payment of the entire Account, or



2. monthly, quarterly or annual installment payments over a period that is not longer than the life expectancy of the Depositor or the joint life and last survivor expectancy of the Depositor and the Designated Beneficiary.



3. In the absence of an election, the distribution required under Section 3.3 shall be made in annual installment payments over the joint life expectancy of the Deposirot and the Designated Beneficiary, or, if the Deposirot has not designated a Designated Beneficiary, in annual installment payments over the life expenctancy of the Depositor.

3.5 Amount of Distribution. For each taxable year beginning with the taxable year in which the Depositor attains Age 70 1/2, the Depositor shall receive at least the amount determined by dividing the entire Account Balance as of December 31 of the immediately preceding year by (a) the life expectancy of the Depositor, or (b) if the Depositor has designated a Designated Benefiaiary, the joint life and last survivor expectancy of the Depositor and his Designated Beneficiary or, if less and the primary Designated Beneficiary is not solely the Depositor's spouse, the applicable divisor determined from the minimum distribution incidental benefit requirements of Section 1.401(a)(9)-2 of the Regulations. The minimum amount required to be distributed for any year shall be distributed no later than December 31st of that year, provided however that the minimum amount required to be distributed for the year in which the Depositor attains Age 70 1/2 shall be distributed no later than the Depositor's Required Beginning Date. In the event that there is more than one primary Designated Beneficiary, life expectancies and joint life and last survivor expectancies shall be determined with reference to the Designated Beneficiayr with the shortest life expectancy.

3.6 Distributions Upon Death. In the Depositor dies prior to the complete cdistribution of the Account, the remaining assets of the Account shall be distributed in accordance with this Section 3.6.

1. If the Depositor dis after his Required Beginning Date, the remaining assets of the Account shall be distributed to the Designated Beneficiary at least as rapidly as under the distribution method being used immediately before the Depositor's death.



2. If the Depositor dies prior to his Required Beginning Date, the remaining Assets of the Account shall be distributed to the Designated Beneficiary as elected by the Designated Beneficiary on a form provided by the Custodian for that purpose as follows:


1. as of the December 31 of the calendar year which contains the fifth anniversary of the Depositor's death, in substantially equal installments over a period not exceeding the life expectancy of the Designated Beneficiary; or



2. commencing no later than December 31 of the calendar year which contains the first anniversary of the Depositor's death, in substantially equal installments over a period not exceeding the life expectancy of the Designated Beneficiary; or



3. if the Designated Bendfiaciary is the Depositor's surviving spouse, commencing no later than December 31 of the calendar year in which the Depositor would have attained age 70 1/2, in substantially equal installments over a period not exceeding the life expectancy of the Designated Beneficiary.


3. Notwithstanding Subsection (b) of this Section, if the Designated Beneficiary is the Depositor's surviving spouse may elect to treat the Account as his own account. Such an election is considered to have been made by the surviving spouse if either (1) any required amounts in the Account have not been distributed within the appropriate time period applicable to the deceased Depositor under Section 401(a(9) of the Code or (2) any additional amounts are contributed to the Account. In such case, if the spouse dies prior to his Required Beginning Date, the remaining portion of the Account shall be distributed as set forth in Clauses (i) and (ii) of Subsection (b).



4. The election under Subsection (b) shall be made no later than December 31 of the calendar year which contains the first anniversary of the Depositor's death. In the absence of such an election, distributions shall be made as provided under Clause (i) of Subsection (b), provided however that if the Desigated Beneficiary is the Depositor's surviving spouse, distributions shall be made as provided under clause (iii) of Subsection (b).



5. In the event that as of the date of the Depositor's death there are two or more primary Designated Beneficiaries, the Account shall be divided among such Designated Beneficiaries in the proportion prescribed in the Adoption Agreement or such other form provided by the Custodian afor such purpose and the methods of distribution described in thei Section shall be applied spearately to the interest of each Designated Beneficiary.

3.7 Determination of Life Expectancy. Life expectancies and joint life and last survivor expectancies shall be computed under the rules of Section 401(a)(9) of the Code and the Regulations thereunder and by using the expected return multiples of Talbes V and VI of Section 1.72-9 of the Regulations. The life expectancy of the Depositor and the Depositor's spouse shall not be recalculated annually unless the Depositor (or the Depositor's spouse if applicable) irrevocably elects otherwise, on a form provided by the Custodian, prior to the first required payment under this Article.

3.8 Designation of Beneficiary. The Depositor may designate from time to time any person or persons as his Designated Beneficiary and contingent beneficiaries, who will be entitled to receive any undistributed amount credited to the Account at the time of the Depositor's death. Any such designation by the Depositor shlll be made in wtiting and in a form or manner acceptable to the Custodian, ans shall be effective only when filed with the Custodian during the Depositor's lifetime. The Depositor may change or revoke such designation at any time by filing a new instrument with the Custodian. If the Designated Beneficiary (or each of the Designated Beneficiaries) predeceases the Depositor, the Depositor's designation shall be ineffective. If no designation is in effect at the time of the Depositor's death, the Designated Beneficiary shall be the Depositor's estate. A designation of beneficiary under this Agreement shall remain in effect notwithstanding any corporate transaction, including but not limited to a merger, acquisition, sale or dissolution, in which the Custodian resigns or a successor custodian is appointed. Further, upon resignation of a predecesssor custodian, an effective beneficiary designation filed with such predecessor custodian shall continue in effect with the Custodian under this Agreement. These provisions are intended to provide for the continuation of an effective beneficiary designation without the exectuion of a furnter designation in cases involving the replacement, substitution, or applintment of a successor custodian, whether or not resulting from a transaction in which the predecessor custodian ceases to exist as a separate intity, and whether or not at the express direction of the Depositor.

3.9 Early Distributions. In the event the Depositor requestsw a distribtuion form the Account prior to the date he attains Age 59 1/2 or becomes disabled (within the meaning of Section 72(m)(7) of the Code, the Depositor shall be required, as a condition to receiving such distribution, to furnish the Custodian with a written statement explaining how the Depositor intends to dispose of the amount so distributed. This requirement shall not apply to a distribution which is part of a series of substantially equal periodic payments (not less frequently than annually) made over the life expectancy of the Depositor and the Designated Beneficiary.

3.10 Responsibilities of Custodian and Sponsor. In making any distribution from the Account, the Custodian shall be fully entitled to rely on the directions furnished to it by the Depositor or the Designated Beneficiary on forms provided by the Custodian for that purpose, and shall be under no duty to make any inquiry or investigation with respect thereto. The Custodian shall have no responsibility to make any distribution from the Account unless and ustil directions relating thereto have been received from the Depositor or the Designated Beneficiary in accordance with the terms and conditions of this Agreement, on forms provided by the Custodian for this purpose. Neither the Custodian nor the Sponsor shall have any responsibility for the timing, propriety, or Federal income tax consequeices to the Depositor or the Designated Beneficiary of any distribution from the Account pursuant to this Agreement.

3.11 Requirements of the Code. Notwithstanding anything in this Agreement to the contrary, the assets of the Account shall be distributed according to the rules of Section 401(a)(9) of the Code and the Regulations thereunder, provided however that if the Depositor also maintains another individual retirement account, he may use the "alternative method" described in Notice 88-38, 1988-1 C.B.524, to satisfy the minimum distribution requirements of Section 401(a)(9).


4.1 Direction by Depositor.

1. All contributions to the Account shall be invested, without distinction between principal and income, in one or more of the investment options, to be selected by the Depositor which are offered by the Sponsor in conjunction with the Custodian. Investment options may include demand deposits, time deposits, savings accounts and certificates of deposit of Custodian's banking department or another saving or banking institution, and publicly traded securtiies, shares of stock of the Custodian or its affiliates, mutual fund shares, money market instruments and other permitted investment alternatives obtainable through the Sponsor, in its regular course of business.



2. The Depositor's instructions may include selection of an automatic investment program for uninvested cash balances from amont options provided by the Custodian and the Sponsor. When no clear instructions have bee received, the Cust5odian may, at its discretion, either hold Account funds uninvested or invest the funds in an insured bank account or in other short-term investment media. Upon maturity of a certificate of deposit or any other investment, funds invested in such investment shall be reinvested as directed by the Depositor. Absent clear instruction from the Depositor, the Custodian may elect to treat such funds as any other Contribution for which no instructions have been received or to reinvest the funds in another similar investment under the prevailing terms and conditions applicable to such investments.



3. The Depositor may shift funds among investment options within the Account. Such transfers shall be subject to the applicable minimum amount requirements, payment of transfer charges and related fees, and any penalties required or permitted by law for withdrawals from time depositos before maturity.



4. Any distribution of earnings received by the Custodian with respect to assets held in the Account shall be reinvested by the Custodian in accordance with the investment directions furnished by the Depositor.



5. All transactions involving assets in the Account shall be subject to the fules, regulations, customs and usages of the Custodian, the Sponsor and the exchange, market or clearing house where executed and to all applicable laws and rulings.

4.2 Responsibility of Depositor.

1. The Depositor shall direct the Custodian with respect to the investment of all Contributions and earnings on the Account. All investment decisions shall be teh sole responsibility of the Depositor.



2. The Sponsor shall not (i) have any investment discretion, (ii) act as investment counselors or advisors or (iii) offer any opinion or judgment on any matter pertaining to the nature, value, potential value or suitability of any investment or potential investment.



3. Neither the Custodian not the Sponsor shall have any liability for losses of any kind which may result from action taken in accordance with the investment instructions of the Depositor or from any failure to act because of the absence of such directions.

4.3 Responsibility of Sponsor. Pursuant to the Depositor's instructions, the Sponsor will invest and reinest the funds in the Account without any duty to diversify and without regard to whether the investments are authorized by the laws of any jurisdiction with respect to or concerning fiduciary investment, exercise or sell options, conversion privileges or rithts to subscribe for additional securities; consent to or participate in dissolutions, reorganizations, cdonsolidations, mergers, sales leases, mortgages, transfers or other changes affecting securities held for the Depositor; and make, execute and deliver any and all contracts, waivers, releases or other written instruments necessary or proper for the exercise of any of the foregoing powers. Marketable securities in the Account shall be held in nominee or bearer form.

4.4 Responsibility of Custodian. The Custodian shall retain custody of all assets in the Account, except with respect to certain investments during the term in which such assets are in possession of the Sponsor. The Custodian or the Custodian's agent shall maintain records of receipts, distributions, disbursements, investments and other transactions involving assets of the Account. The Custodian shall be entitled to perform any of its duties throught other entities or persons (including affiliates of the Custodian) designated by the Custodian from time to time.

4.5 Shareholder Rights. The Depositor shall receive all notices, prospectuses, financial statements, proxies and proxy solicitation material relating to the securities, if any, in the Account. Neither the Custodian not the Sponsor shall vote any such shares except in accordance with the Depositor's instructions and with applicable laws and rulings.

4.6 Rights and Responsibilities of Designated Beneficiary. Upon the death of the Depositor, the Designated Beneficiary shall assume all the rights and responsibilities of the Depositor under this Article with respect to his interest in the Account as prescribed in the Adoption Agreement.

4.7 Prohibited Investments. Notwithstanding any provision of this Agreement to the contrary, no assets of the Account shall be invested in life insurance contracts or in collectibles (within the meaning of Section 408(m)(2) of the Code), nor will assets of the Account be commingled with other property except in a common trust fund or in a common investment fund (within the meaning of Section 408(a)(5) of the Code).

4.8 Execution of Orders. The Sponsor may provide the Custodian with instructions, via confirmations or otherwise, implementing the Depsoitor's directions to purchase and sell securities for the Account. The Depositor authorizes the Custodian to honor trades within the Account without any obligation to verify prior authorizations of such trades. The Sponsor shall cause to have forwarded confirmation of purchases and sales to the Custodian, who in turn shall forward confirmation of purchases and sales to the Depositor. Selling short, and/or executing purchases in an amount which is greater than the available cash are each prohibited transactions.


5.1 Amendment. The custodian is authorized to amend the Agreement in any respect and at any time (including retroactively) to comply with the applicable provisions of the Code and the Regulations. Any other amendments to the Agreement shall require the consent of the Depositor and the Sponsor. For these purposes, the Depositor shall be deemed to have consented to any amendment to the Agreement if the Depositor fails to object thereto in writing within thirty (30) days after having received written notice of the amendment from the Custodian. 5.2 Resignation of Custodian. The Custodian may resign upon 60 day's written notice mailed to the Depositor and the Sponsor. Upon such resignation, the sponsor may appoint a successor custodian and, as soon as thereafter practicable, the Custodian shall assign, transfer and pay of the assets of the Account to the successor custodian, less such amounts as may be required to provide for payment of its fees and expenses in connection with the settlement of the Account or otherwise. If the Sponsor fails to appoint a successor custodian within 60 days after the Custodian's notice of resignation, the Custodian shall appoint a successor custodian to hold the assets of the Account. Any successor custodian appointed hereunder shall be a person that is qualified to serve as a custodian under Section 408 of the Code. 5.3 Removal of Custodian. The Sponsor may for good cause remove the Custodian upon 60 days' written notice to the Custodian and the Depositor. In such a case, the Sponsor shall appoint a successor custodian. When the Custodian has been removed, the Custodian shall, as soon as practicable, assign, transfer and pay over the assets of the Account to the successor custodian, less such amounts as may be required to provide for payment of its fees, expenses and, if applicable, penalties in connection with the settlement of the Account or otherwise. Any successor custodian appointed hereunder shall be a person that is qualified to serve as a custodian under Section 408 of the Code. 5.4 Termination. The Depositor may terminate this Agreement and the Account at any time be delivering to the Custodian a written notice of termination. Upon termination, all assets remaining in the Account as of the date of termination, less such amounts as may be required to provide for payment of fees, expenses and, if applicable, penalties in connection with the settlement of the Account, shall as soon as practicable, be transferred in accordance with the Depositor's instructions or, in the absence of such instructions, directly to the Depositor. 5.5 Substitution Pursuant to Determination by the Internal Revenue Service. In the event that the Custodian which had previously qualified as a non-bank trustee or a non-bank custodian no longer qualifies as a non-bank trustee or a non-bank custodian pursuant to a final determination of the Internal Revenue Service, a successor that qualifies as a trustee or a custodian under Section 408 of the Code shall be substituted.
6.1 Fees. The Custodian and the Sponsor each reserve the right to charge fees in connection with the investments available for the Account. The Sponsor shall charge fees for brokerage and other services rendered under this Agreement. The applicable schedules of fees and charges shall be furnished to the Depositor by the Custodian. Such fees and charges may be deducted from the Account or paid separately by the Depositor to the extent permitted by law.

6.2 Taxes. The Depositor is solely responsible for any taxes and/or penalties incurred in connection with the Account, including, without limitation, taxes and penalties for excess contributions, premature withdrawals or failure to make mandatory withdrawals. Any transfer taxes incurred in connection with the investment and reinvestment of assets in the Account, and any income taxes or other taxes of any kind whatsoever that may be levied or assessed upon or in respect of the Account, may be paid from the assets of the Account and shall not be the obligation of the Custodian or the Sponsor.

6.3 Expenses. All administrative and other expenses incurred in any activity on behalf of the Account, including fees for legal services and the cost of the fiduciary insurance, shall be paid from the assets of the Account and shall not be the obligations of the Custodian or the Sponsor.

6.4 Liquidation of Assets. The Custodian shall have the right to remove the dividend reinvestment option, or liquidate assets in the Account and apply the proceeds to payment for fees and charges or to any administrative or other expenses incurred an behalf of the Account.


7.1 Information by Depositor. The Depositor shall furnish the Custodian with all information as may be necessary for the Custodian to prepare any reports required pursuant to Section 408(i) of the Code and the Regulations thereunder.

7.2 Annual Reports by Custodian. The Custodian shall render an annual report to the Depositor (or, following the Depositor's death, the Designated Beneficiary) on or before January 31 of each calendar year, containing all information with respect to the preceding calendar year as is required to be furnished pursuant to Section 408(i) of the Code and Regulations thereunder. The Custodian shall submit all other reports to the Internal Revenue Service and the Depositor as may be prescribed by the Internal Revenue Service.


8.1 Nonforfeitability. The Depositor's interest in the Account in nonforfeitable.

8.2 Exclusive Benefit. The Account is established for the exclusive benefit of the Depositor and the Designated Beneficiary.

8.3 Prohibition Against Assignment. Except as otherwise provided in Article VI, no interest, right or claim in or to any part of the Account or any payment therefrom shall be assignable, transferable, or subject to sale, mortgage, pledge, hypothecation, commutation, anticipation, garnishment, attachment, execution, or levy of any kind, and the Custodian shall not recognize any attempt to effect any of the proceeding, except to the extent required by law.

8.4 Prohibited Transactions. The Depositor, the Custodian and/or the Sponsor shall not engage in any transaction with respect to the Account which is prohibited under Section 4975 of the Code and which, under Section 408(e)(2) of the Code, would cause the Account to fail to qualify as an individual retirement account.

8.5 Governing Law. This Agreement shall be governed by and construed, administered and enforced according to the law of the state of the Sponsor's primary place of business, except to the extent preempted by Federal Law.

Individual Retirement Account Disclosure Statement

This Disclosure Statement is provide to you in accordance with the provision of the Internal Revenue Code (the "Code"). It is provided to help you understand the operation and effect of your Individual Retirement Account ("IRA") and should be read in conjunction with the Individual Retirement Account Custodial Agreement and the IRA Application.

RIGHT TO REVOKE THE IRA
This Disclosure Statement is being furnished to you on the date on which your IRA is being established. if, after you have read this Disclosure Statment, you decide for any reason not to participate in this retirement savings program, you may revoke the IRA at any time on or before the seventy day after you established it and treat it as though it had never been established. The Custodian will refund you contribution in full, neither crediting your account for earnings, nor charging it with any admisistrative expenses or commissions. In order to effect a timely revocation, you must notify the Custodian in writing. you may deliver your notification by hand to the office where you opened the IRA or send it by mail. Your letter must be postmarked no later than the seventh day after you established the account and should be addressed to the perosn designated to receive such notice of revocation shown on the Application.

The following words should be used in the revocation.

"I hereby elect to revoke my IRA Account No.	__________________________________
established on	________________________________________________"
Signature	________________________________________________
Print Name	_____________________________ DATE ______________

Any questions regarding this procedure may be directed to the Custodian.

WHAT IS AN INDIVIDUAL RETIREMENT ACCOUNT?
An Individual Retirement Account (IRA) is a personal savings account that offers you tax advantages to set aside money for your retirement. You may be able to deduct your contribution in your IRA in whole or in part, depending on your circumstances. Generally, amounts in your IRA, including earnings and gains, are not taxed until distributed to you. The IRA is a custodial account set up in the United States for your exclusive benefit or for the benefit of your beneficiaries. The account is created by a written documant, which you have received. As required by the Code, the document provides that the account meets all of the folowing requirements:

1. The Custodian is a bank, a federally insured credit union, a savings and loan association, or any entity approved by the IRS to act as custodian. You may not be the trustee or custodian of your IRA.



2. The Custodian generally cannot accept contributions of more than $2,000 for each year. However, rollover contributions and employer contributions to a simplified employee pension ("SEP") can be more than $2,000. Moreover, if an employer establishes a simplified tax-favored retirement plan for small employers ("SIMPLE plan") to which annual contributions are, or will be, made, each covered employee must have a dedicated SIMPLE-IRA to which only SIMPLE plan contributions can be made. This type of IRA is referred to as a SIMPLE-IRA. This IRA is not a SIMPLE-IRA and cannot be used to receive SIMPLE plan contributions.



3. Contributions must be in cash, except that rollover contributions can be property other than cash, if acceptable to the Custodian.



4. The amount in your IRA must be fully vested (you must have a nonforfeitable right to the amount) at all times.



5. Assets in your IRA cannot be used to buy a life insurance policy.



6. Assets in your IRA cannot be combineed with other property in another account, except in a common trust fund or common investment fund.



7. You must start receiving distributions from your account by April 1 of the year following the year in which you reach age 70 1/2.



8. You may set up an IRA at any time during the year. However, the time for making contributions for a particular year is limited (see the discussions of contributions, below).

Regular IRA. You may establish an IRA in your name and make Regular Contributions to it. For each year, Regular Contributions may not exceed the lesser of $2,000 or 100% of your compensation. All or part of your Regular Contributions may be deductible. (See the section on Contributions and Deductibility of Contributions below.)

Spousal IRA. If you file a joint federal income tax return with your spouse, you may establish an IRA for your spouse and make contributions to it. For each year, the aggregate of the contributions to your IRA and your spouse's IRA may not exceed the lesser of $4,000 or 100% of compensation. In no event may you contri bute more than $2,000 to either you own IRA or your spouse's IRA for any year. All or a portion of these contributions may be deductible. (See the sections on "Contributions and Deductibility of Contributions" below).

Rollover IRA.You may establish an IRA in your name for amounts received from the qualified retirement plan of your employer or former employer if such amounts are "eligible rollover distributions" and are rolled over directly from the employer's plan or are deposited into the IRA within 60 days after you received them. Eligible rollover distributions may also be rolled over into your regular IRA. If properly rolled over, a distribution from an employer's plan will not be taxable to you until you withdraw it from the IRA at a later date. (See the section on "Contributions and Deductibility of Contributions" below).

A SIMPLE IRA is a dedicated IRA that may only receive contributions under a SIMPLE plan. THese contributions must remain segregated in the SIMPLE IRA for a two year period from the participant's initial commencement of participation in the SIMPLE plan. A rollover or transfer from a SIMPLE IRA to any other IRA may not occur until this initial two year period has passed. Once the initial two year period has been completed, rollovers or transfers between SIMPLE IRAs are permitted. All of the rules applicable to IRA to IRA rollovers generally apply to rollovers from a SIMPLE IRA.

CONTRIBUTIONS AND DEDUCTIBILITY OF CONTRIBUTIONS
Regular IRAs You may make Regular Contributions to your IRA for any year in which you received conmpnsation for personal services. The Regular Contribution is limited to the lesser of $2,000 or 100% of your compensation. Contributions must be in cash or by check. A Regular Contributions for a year may be made at any time during the year or during the following year until the due date (without extensions) for your federal income tax return for the year.

Deductibility of Regular Contributions. You may be able to deduct your contribution to your IRA depending on (1)whether you or your spouse is an "active participant" in an employer's retirement plan and (2) the amount of your "adjusted gross income" ("AGI). AGI is your gross income minus certain deductions. For contributions made for taxable years beginning after 12/31/97, the dollar thresholds for pre-1998 years for certain active participants in employer-sponsored plans will be replaced with the following thresholds:

	Married Participants	Single Participants
1998	$50,000-$60,000	$30,000-$40,000
1999	$51,000-$61,000	$31,000-$41,000
2000	$52,000-$62,000	$32,000-$42,000
2001	$53,000-$63,000	$33,000-$43,000
2002	$54,000-$64,000	$34,000-$44,000
2003	$60,000-$70,000	$40,000-$50,000
2004	$65,000-$75,000	$45,000-$55,000
2005	$70,000-$80,000	$50,000-$60,000
2006	$75,000-$85,000	$50,000-$60,000
2007	$80,000-$100,000	$50,000-$60,000

Married participants filing separately still have a geginning threshold or zero. Therefore the phase out range remains $0-$10,000. This rule also applies to a nonactive participant spouse who files separately, where their spouse is an active participant.

Limitation for Spouse Who is not an Active Participant: In the case where an IRA participant is not an active particiant in an employer plan at any time during a taxable year but whose spouse is an active participant, a special dollar threshold shall apply. In these cases the phase-out dollar threshold for deductible IRA contributions shall be $150,000-$160,000, beginning for taxable years agter 12/31/97, and such spouse must file a joint income tax return with their spouse who is the active participant.

Contributions after Age 70 1/2: You may not make Regular Contributions into an IRA for the taxable year in which you attain the age of 70 1/2 or thereafter.

Compensation:"Compensation" includes such items as salaries, bonuses, commissions, and in the case of a self-employed person, net earnings from self-employement. Compensation also includes all taxable alimony and separate maintenance payments received by you under a decree of divorce or a separate maintenance agreement. Compensation does not include amounts received as a pension or annuity or amounts received that represent deferred compensation.

If neither you not your spouse is an active participant, then any contribution (not in excess or the lesser of 100% compensation or $2,000) to a regualr IRA or a spousal IRA is deductible. If you (or your spouse) are an active participant, you may deduct contributions according to the following charts:

UNMARRIED INDIVIDUALS
If Your Adjusted Gross Income is:	Your Contribution Limit is:	Your Deduction Limit is:
$25,000 or less	Lesser of 100% of compensationor $2,000	Lesser of 100% of compensationor $2,000
Between $25,000 and $35,000	Lesser of 100% of compensationor $2,000	$2,000 limit is reduced by 20¢ for every $1 of AGI between $25,000 and $35,000
$35,000 and over	Lesser of 100% of compensationor $2,000	No deduction allowed

MARRIED PERSONS FILING JOINT RETURNS
If Your Adjusted Gross Income is:	Your Contribution Limit is:	Your Deduction Limit is:
$40,000 or less	Lesser of 100% of compensationor $2,000 (applied separately to each spouse)	Lesser of 100% of compensationor $2,000
Between $40,000 and $50,000	Lesser of 100% of compensationor $2,000 (applied separately to each spouse)	Each spouse's $2,000 limit is reduced by 20¢ for every $1 of AGI between $40,000 and $50,000
$50,000 and over	Lesser of 100% of compensationor $2,000 (applied separately to each spouse)	No deduction allowed

MARRIED PERSONS FILING SEPARATELY
If Your Adjusted Gross Income is:	Your Contribution Limit is:	Your Deduction Limit is:
Between $0 and $10,000	Lesser of 100% of compensationor $2,000	$2,000 limit is reduced by 20¢ for every $1 of AGI between $0 and $10,000
$10,000 and over	Lesser of 100% of compensationor $2,000	No deduction allowed

Rounding: The amount of the reduction is rounded down to the next lowest $10. For example, if you are married filing jointly with adjusted gross income of $46,255, the $2,000 limit would be reduced by $1,251 ($46,255 - $40,000 = $6,255 X .20 = $1,251). Rounding down, this reduction amount would be $1,250, leaving a higher allowable deduction for you and your spouse of $750 each (2,000 - $1,250).

Minimum Deduction: Your minimum allowable deduction shall be $200 until phased out on the appropriate chart. For example, if you are an unmarried individual with Adjusted Gross Income of $34,800, your allowable deduction would be $200, even though by using the reduction explained above you would arrive at a $40 deduction. However, if your AGI were $35,000 or more, you would not be entitled to a deduction. You are never allowed to deduct more than you are allowed to contribute for the year.

Active Participant: You are considered to be an active participant if (1) at any time during the year you benefited under an employer's "qualified retirement plan," (2) your spouse benefited under an employer's qualified paln during the year and you file a joint federal income tax return for that year, or (3) your spouse benefited under an employer's plan during the plan year, you and your spouse filed separate federal income tax returns and you lived with your spouse at any time during the year. A qualified retirement plan is a:

1. pension, profit-sharing or stock bonus plan qualified under Section 401(a) of the Code;


2. qualified annuity plan under Section 403(a) of the Code;


3. simplified employee pension (SEP) under Section 408(k) of the Code;


4. SIMPLE plan under Section 408(p) of the Code;


5. retirement plan established by a government for its emloyees (does not include a Section 457 plan);


6. annuity contract purchased by certain tax exempt organizations or public schools under Section 403(b) of the Code; or


7. pre-1959 pension trust described in Section 501(c)(18) of the Code.

It should be noted that even sole proprietors with no employees who adopt Deogh plans, SEPs or SIMPLE plans are considered to be participants.

The Internal Revenue Service Regualtions contain a series of rather complex rules pertaining to whether an individual is an active participant. If you are involved with any of the plans described above, you should seek assistance from your employer or your tax advisor to determine whether you are an active participant.

Examples: The following examples illustrate the tax deductibility of contributions to your IRA:

Example 1.    Jane is an individual who benefits under her employers plan. If Jane's earned income is $23,000 and her AGI is $28,000, she may make a contribution to an IRA equal to the lesser of 100% of her earned income or $2,000. Thus, Jane may contribute up to $2,000 to the IRA.

The amount of the contribution that is deductible is determined as follows:

Jane's AGI	$28,000.00
AGI limit from chart	$25,000.00
Difference	$ 3,000.00
x adjustment	.20
Reduction	$   600.00

Thus, althouth Jane may contribute $2,000 to the IRA for the year, only $1,400 ($2,000 - 600) is deductible. Any amount which Jane contributes in excess of $1,400 is non-deductible. If Jane contributes less than $1,400 only the amount contributed is deductible.

Example 2.  Jeffrey and Elizabeth are married and file a joint Federal income tax return for the year. Jeffrey earns a salary of $30,000 and Elizabeth earns a salary of $6,600. When their other income (such as interest or dividends) is addes to their salaries, their joint AGI is $44,000. Elizabeth is an active participant in her employer's plan.

Jeffrey and Elizabeth may each contribute up to $2,000 to theri IRAs (for a total of up to $4,000). However, their joint deduction is limited to $2,400, computed as follows:

Jeffrey and Elizabeth's joint AGI	$44,000.00
AGI limit from chart	$40,000.00
Difference	$ 4,000.00
x adjustment	.20
Reduction	$   800.00

Each person's $2,000 deduction limit is reduced by $800 to $1,200. The couple's combined deduction limit is, therefore, $2,400. Any amount either spouse contributes above the deduction limit is a non-deductible IRA contribution. If either spouse contributes less than $1,200 only the amount contributed by that spouse is deductible.

Consequently, if Jeffrey contributes $2,000 into his IRA and Elizabeth contributes $1,000 into her IRA, their deduction on the joint return would be limited to $2,200. Jeffrey will have made an $800 non-deductible contribution to his IRA.

	Actual Contribution	Deductible	Non-Deductible
Jeffrey	$2,000.00	$1,200	$800
Elizabeth	$1,000	$1,000	--
	$3,000	$2,200	$800

Example 3.   Jack and Jill are a married couple who live together. Jack earns $50,000 and Jill earns $37,000. jack is covered under his employer's plan, but Jill is not covered under any plan. The AGI of both Jack and Jill, determined separately, is at least $10,000. If Jill files separately, Jack will be able to contribute up to $2,000, but since his is an active participant with an AGI greater than $10,000, none of it will be deductible. Jill will also be able to contribute up to $2,000. Although she is not an active participant, she is "treated" as an active participant due to her husband's status. Therefore, none of her contributions will be deductible because her AGI exceeds $10,000.

Spousal IRAs.   If you received compensation during the year and you and your spouse will file a joint federal tax return for the year, you may make contibutions into separate IRA accounts both for yourself and for your spouse. The IRA for your spouse is sometimes referred to as a Spousal IRA. No conatribution may be made into your spouse's IRA for the year in which he or she attains the age of 70 1/2, or thereafter. The account which is established for your spouse, and all contributions to that account, are deemed to be tha property of your spouse.

The aggregate or the contributions to your IRA and your spous'e IRA may not exceed the lesser of $4,000 or 100% of compensation. The amount of the contribution may be divided between the IRAs in any way you want, so long as no more than $2,000 foes into either IRA (see the discussion about "Regular IRA's" above). The spousal IRA is available if one spouse has compensation and the other spouse either has or has not received compensation.

For example, if you earn $20,000 and your spouse earns $1,500, you would still be eligible for the full spousal contributions and deduction of $4,000.

If your spouse earns more than $2,000 during the year, there would be no difference between opening a spousal IRA or a regular IRA for your spouse. Either way you can contribute your full IRA contribution (up to $2,000) to your IRA and you or your spouse can make a Regular Contribution up to $2,000 to your spouse's IRA.

Contributions to spousal IRAs are fully deductible (up to the contribution limit described above) if neither spouse is an active particiapant in an employer's plan. If either of you is an active participant, then your deduction for your spousal IRA contribution may be limited as follows:

If Your Adjusted Gross Income is:	Your Contribution Limit is:	Your Deduction Limit is:
$40,000 or less	Lesser of 100% of compensationor $2,250	Lesser of 100% of compensation or $2,250
Between $40,000 and $50,000	Lesser of 100% of compensationor $2,250	$2,250 limit reduced by 22 1/2 cents for every $1 of AGI between $40,000 and $50,000
$50,000 and over	Lesser of 100% of compensation or $2,250	No deduction permitted

Examples.    The following examples illustrate the tax deductibility of contributions to a spousal IRA.

Example 1.    Kate and Bob file a joint tax return. Each spouse earns more than $2,000 and one is an active participant. They have a combined AGI of $44,255. Kate and Bob may contribute up to $2,000 each for a total of $4,000. However, their joint deduction is limited to $2,3000, computed as follows:

Kate and Bob's Joint AGI	$44,255
AGI limit from chart	$40,000
Difference	$ 4,255
x adjustment	.20
	_______
	$ 851 per person
rounded to	$ 850 per person

Each person's separate $2,000 deduction limit is reduced by $850 to $1,150. Therefore, although the couple's combined contribution limit is $4,000, thier combined deduction limit is $2,300.

Example 2.    If, in the example above, Bob did not earn any compensation, or elected to be treated as having earned no compensation, Kate could establish a Spousal IRA (consisting of an account for herself and one for her husband). Kate may contribute up to a total of $4,000 between the two IRAs (but not more than $2,000 to either IRA). The joint deduction is limited to $2,300, computed as follows:

Kate and Bob's Joint AGI	$44,255
AGI limit from chart	$40,000
Difference	$ 4,255
x adjustment	.40
	_______
	$1,702
rounded to	$1,700

Rollover IRAs.    If you receive a distribution from the qualified paln of your employer or former employer, and the distribtution is an "eligible rollover distribtuion," you may contribute all or part of the distribution to your IRA. The portion you contribute to your IRA will not be taxable to you until you withdraw it from the IRA. Your employer or former employer will give you the opportunity to rollover the distribution directly from the plan to the IRA. Your employer or former employer will give you the opportunity to rollover the distribution directly from the plan to the IRA. If you elect, instead, to receive the distribution, you must deposit it into the IRA within 60 days after you receive it.

An "eligible rollover distribution" is any distribution from a qualified paln that would be taxable other than (1) a distribution that is one of a series of periodic payments for an employee's life or over a period of 10 years or more, (2) a required distribution after you attain age 70 1/2 and (3) certain corrective distributions.

A SIMPLE IRA is a dedicated IRA that may only receive contributions under a SIMPLE plan. These contributions must remain segregated in the SIMPLE IRA for a two year period from the participant's initial commencement of participation in the SIMPLE plan. A rollover or transfer from a SIMPLE IRA to any other IRA may not occur until this initial two year period has been completed. Thereafter, rollovers or stransfers between SIMPLE IRAs are permitted and all of the rules applicable to IRA to IRA rollovers generally apply to rollovers from a SIMPLE IRA.

If you separate your rollover contributions and your regular contributions in different IRAs, then you may transfer your rollover IRA into the qualified paln of a new employer at a later date.


Eligible Rollover Distributions after 12/31/92: Eligible rollover distributions from a qualified palan, annuity, or TSA generally include any distribution which is not:

1. part of a series of substantially equal payments that are made at least once a year and that will last for:
1. your lifetime (or your life expectancy), or
2. your lifetime and your beneficiary's lifetime (or joint life expectancies), or
3. a period of ten years or more.
2. attributable to your required minimum distribution for the year; and
3. attributable to your "after-tax" employee contributions to the plan, since these amounts will be non-taxable when they are maid to you.

Rollovers to Roth IRAs: You are not permitted to make a qualified rollover contribution to a Roth IRA from any IRA plan (other than another Roth IRA) if your AGI for the year during which the rollover is made exceeds $100,000 or you are a married individual filing a spearate return.

Adjusted gross income means the AGI determined for the year during which the rollover is made, but reduced by the taxable amount of an IRA distribution includible in income but only with respect to such amount that was rolled over to a Roth IRA. Taxable IRA distributions that are not rolled over to a Roth IRA are included in the AGI amount. Qualified rollovers between Roth IRAs are permitted regardless of your AGI.

Taxation in Rolling Over from Traditional IRA to Roth IRA: The amount that would have been included in your income if you had taken a distribution is included in gross income "ratably" over a four-tax-year period beginning with the tax year in which the distribution is made. In order for the taxable amount of an IRA distribution to be included in income ratably over 4 years, such rollover must be made before 1/1/99. Any rollovers from an IRA to a Roth IRA after 12/21/98 will be fully includible in income the year in which rolled over. The 10% premature distribution tax shall not apply to the taxable amount of an IRA rolled to a Roth IRA. Income tax withholding will apply to the distribution.

Contribution Conversion of Traditional IRA to a Roth IRA: Generally, the conversion of a traditional IRA to a Roth IRA is treated as a distribution and subsequent rollover conversion contribution. However, if an individual decides by their tax filing deadline (not including extensions) to transfer a current year contribution plus earnings thereon from an IRA to a Roth IRA, no amount shall be includible in gross income as long as no deduction was taken for the contribution. In addition, pending technical corrections would also permit you to "convert" a contribution plus earnings from a Roth IRA to a traditional IRA by your tax filing deadline, including extensions.

Qualified Rollover Contributions: This term includes: (a) Rollovers between Roth IRA accounts; and (b) Traditional IRA to a Roth IRA. Qualified Rollovers must meet the general IRA rollover rules outlined in your disclosure Statement, except that the 12 month rollover restriction shall not apply to rollovers between a traditional IRA and a Roth IRA. However, the 12 month rule shall apply to rollovers between Roth IRAs. Rollovers from employer-sponsored plans, such as qualified plans and 403(b)s, to a Roth IRA are not permitted. However, you could roll over from the employer paln to a traditional IRA, and then roll over to a Roth IRA.


All eligible individuals may make IRA contributions of up to 100% of their earned income not to exceed $2,000. To the extent that amounts are not eligible for tax deduction for federal income tax purposes, these amounts may remain in the account as non-deductible contributions.

An individual may make non-deductible IRA contributions to the following extent:

1. to make up the difference (if any) between the allowable deduction limit and $2,000;
2. in the case of spousal IRAs, to make up the difference (if any) between the allowable deduction limit and $4,000; or
3. where a taxpayer elects to treat otherwise deductible IRA contributions as non-deductible.

Although you may not deduct the amount of the nondeductible contribution on your Federal income tax return, it will earn income on a tax-free basis. Your designation of IRA contributions as non-deductible contributions for a taxable year is to be made on Form 8606. The Form must be attached to your Federal income tax return for the taxable year. If you file an amended return, you may change your designation of your contributions from deductible to non-deductible or vice versa.


Excise Tax on Excess Contributions. If your contribution to your IRA for a particular year exceeds the permissible limits described above, you are subject to a 6% tax on the "excess contributions." You must pay the 6% tax each year on excess amounts that remain in your IRA at the end of the tax year.

The excise tax is computed on Form 5329.

Excess Contributions You Withdraw Before Your Return is Due. You will not have to pay the six percent tax if you withdraw an excess contribution made during a tax year and interest or other income earned on it by the due date of your tax return for that year, including extensions. This amount will not be included in your gross income if no deduction was allowed for the excess contribution and the interest or other income earned on the excess contribution is also withdrawn. However, you must include in your gross income the interest or other income that was earned on the excess contribution for the year in which the excess contribution was made. Your withdrawal of interest or other income may also be subject to the additional 10% tax on early withdrawals, discussed below.

Under similar rules, you can also withdraw amounts that are not excess contributions (because they do no exceed $2,000) but are not deductible (because they exceed the deductible limits). If such a withdrawal is made before the due date of the return, as described above, it will not be includible in gross income.

Excess Contributions You Withdraw After Your Return is Due. If the toatl contributions (other than rollover contributions) for the year to your IRA are $2,250 or less, you can withdraw any excess contribution after the due date for filing your tax return for that year, including extensions, and not include the amount withdrawn in your gross income. This applys only to the part of the excess for which you did not tade a deduction. The 6% tax applies to the excess contribution amount that remains in your IRA at the end of the year.

Taking a Deduction in a Later Year for an Excess Contribution. You cannot reduce an excess contribution by applying it against an earlier year in whch less than the maximum amount allowable was contributed. However, you can apply it to a later year if the contributions for that later year are less than the maximum allowed for that year.

You can deduct from your gross income, in the first available tax year, the amount of the excess contributions in your IRA, from preceding years, up to the difference between the maximum amount that is deductible in the year and the amount actually contributed during the year. This method lets you avoid making a withdrawal. It does not, however, let you avoid the 6% tax on any excess contributions remaining at the end of a tax year.


Elective Distributions You may elect to withdraw all or a portion of your account at any time by completing the appropriate forms provided by the Custodian. If you request a withdrawal prior to your attainment of age 59 1/2, you must furnish the Custodian with a written statement explaining how you intend to dispose of the amount distributed. This requirement does not apply to a distribution which is part of a series of substantially equal periodic payments made over your life expectancy or the joint life and last survivor expectancy of you and your designated beneficiary.

Required Beginning Date When you reach age 70 1/2, the law requires that you begin taking certain minimum distributions from your IRA. If your 70th birthday occurs prior to July 1, you will reach age 70 1/2 in the same calendar year as your 70th birthday. If your 70th birthday is on or after July 1, you will reach 70 1/2 in the calendar year that follows the calendar year in which your 70th birthday occurs.

The year in which you reach 70 1/2 is referred to as your "first distribution calendar year". A person is required to take the distribution for the "first distribution calendar year" by April 1 of the following calendar year (the "required beginning date"). Therefore, were you to attain age 70 1/2 at any time during 1995, you would be required to take your required distribution for the 1995 year by April 1, 1996.

Forms of Distribution By your required beginning date you must elect to have the balance in your IRA distributed in (a) a single sum payment; (b) equal or substantially equal payments over a specified term not exceeding your life expectancy; or (c) equal or substantially equal payments over a specified term not exceeding the joint life and list survivor expectancy or yourself and your designated beneficiary.

If distribution is being made under either of the last two methods, you may elect to receive any part or all of the remaining balance at any time by giving written notice to the custodian.

In the absence of an election, you will be deemed to have elected to take your distribution over a specified term not exceeding the joint life and last survivor expectancy of yourself and your designated beneficiary, if there is a designated beneficiary; and over a specified term not exceeding your single life expectancy, if there is no designated beneficiary.

The distribution required to be taken for your second distribution calendar year, and for each subsequent distribution calendar year, must be taken by December 31 of each such year.

Minimum Required Distributions The minimum amount required to be distributed with respect to your first distribution calendar year is arrived at by dividing your IRA account balance determined as of the close of business on December 31 of the preceding calendar year by your life expectancy (or , by the joint life expectancy of you and your designated beneficiary, if applicable) taken from the life expectancy tables in Section 1.72-9 of the IRS regulations. These tables are reproduced in IRS Publication 590. If your spouse is not your sole primary designated beneficiary, then the applicable divisor may be limited under the "minimum distribution incidental benefit" rule of the Internal Revenue Code.

Recalculation of Life Expectancies In determining the amount required to be withdrawn with respect to your second distribution calendar year and each subsequent distribution calendar year, you may elect either to recalculate your life expectancy (and your spouse's life expectancy, if applicable), or not to recalculate.

If you elect to recalculate, the life expectancy used to determine the minimum distribution for each year after the first distribution calendar year is arrived at by taking the figure from the life expectancy tables based upon you attained age (and that of your spouse, if applicable) for each such year. Since distributions may accelerate upon your death, you should contact your tax advisor before electing to recalculate.

If you elect not to recalculate the life expectancy, in each year after the first distribution calendar year, you reduce the life expectancy determined for the first distribution calendar year by one for each calendar year since the first distribution calendar year. Eventually, your life expectancy will be reduced to zero and you will have to withdrew your entire account.

The elections referred to above must be made by April 1 of the year following the first distribution calendar year. If you fail to make any election by that time on a form prescribed by the custodian your are deemed to have elected not to recalculate. Any election, or failure to elect, which is in effect on this April 1 date shall be irrevocable, and shall apply to all subsequent distributions.

Excise Tax for Insufficient Distributions In any distribution calendar year you may take more than the minimum required amount. However, if less than the minimum required amount is withdrawn with respect to any distribution calendar year, you will be subject to a federal excise tax of 50% of the difference between the required minimum for the year and the amount actually withdrawn.

Distributions After Death If you die before your required beginning date, your beneficiary(ies) shall have the option to elect by December 31 following the year of your death, to have the entire account balance distributed either: (1) within 5 years after your death, or (2) over a period not to exceed the life expectancy of your designated beneficiary. If your beneficiary(ies) does not make an election, then distribution will be made within five years of your death.

If your beneficiary is your surviving spouse, he or she also has the option of electing to recalculate his or her life expectancy. If your surviving spouse does not make this election by December 31 of the year payments are required to commence, your surviving spouse's life expectancy will not be recalculated. In additions, a spouse beneficiary has th option of treating the IRA as his or her own or delaying distributions until you would have attained ate 70 1/2.

If you die on or after your required beginning date, your beneficiary(ies) must receive distribution at least as rapidly as under the method or distribution selected by you prior to your death.

Designation of Beneficiary You may designate any person or persons as your primary designated beneficiaries and contingent beneficiaries. Your primary designated beneficiaries will be entitled to receive any undistributed amount credited to your account at the time of your death in the proportion that you determine on the Application If none of your primary designated beneficiaries survive you, your contingent beneficiaries will receive your account balance.

Taxation of Distributions In general, all distributions from your IRA are includible in your gross income in the year you receive them. Exceptions to this general rule are rollovers and timely corrected withdrawals of contributions, and the return of non-deductible contributions, as discussed elsewhere.

In computing your tax, you cannot use the special averaging or capital gain treatment that applies to lump sum distributions from qualified employer plans.

Your IRA distributions may be fully or partly taxable, depending on whether your IRA includes only deductible contributions or any non-deductible contributions. If only deductible contributions are made to your IRA (or IRAs if you have more than one) all distributions are fully taxable when received. If you make non-deductible contributions to any of your IRAs, then these non-deductible contributions are not taxed when they are distributed to you. Each distribution that you receive will consist partly of non-deductible contributions and partly of deductible contributions, earnings or gains. This part-taxable and part-non-taxable treatment continues until you have recovered all of your non-deductible contributions. You must complete, and attach to your income tax return, Form 8606 if you receive an IRA distribution and, at any time, have made non-deductible IRA contributions.

Additional Tax on Early Distributions If you are under age 59 1/2 and receive a distribution form your IRA account, a 10% additional income tax will apply to the taxable portion of the distribution unless the distribution is received due to death; disability; a series of substantially equal periodic payments at least annually over your life expectancy of the joint life expectancy of you and your designated beneficiary; medical expenses in excess of 7 1/2% of your adjusted gross income; health insurance premiums paid by certain unemployed individuals; qualified acquisition costs of a first time homebuyer, qualified higher education expenses, a qualifying rollover distribution; or the timely withdrawal of the principal amount of an excess or nondeductible contribution.

If you request a distribution in the form of a series of substantially equal payments, and you modify the payments before 5 years have elapsed and before attaining age 59 1/2, the 10% additional income tax will apply to the year payments began through the year of such modification.

Excise Tax on Excess Distributions For tax years ending before 1/1/97, you will be taxed an additional 15% on any amount you receive and include in income during the calendar year from qualified plans, TSAs and IRAs which exceeds the greater of $150,000 (unindexed) or $112,500 (indexed for cost of living). This 15% excess distribution tax is repealed for distributions occurring after 12/31/96. In the event of an IRA participant's death before 1/1//97, the participant's estate may be subject to a 15% tax on the "excess accumulation" in all of the individual's qualified plans, TSAs and IRAs. The 15% excess accumulation tax is repealed for decedents dying after 12/31/96.

Estate and Gift Taxes Your designation of a beneficiary is not considered a transfer of property for Federal gift tax purposes. Amounts remaining in your IRA after your death are generally includible in your gross estate for Federal estate tax purposes. In the event of your death, your estate may be subject to a 15% tax on the "excess accumulations" in all of your qualified plans, Section 403(b) arrangements and IRAs. You should seek the advice of your own tax advisor with respect to the application of this excess accumulations penalty tax.

Income Tax Withholding The Custodian is required to withhold 10% of the amount of each distribution for Federal income tax purposes. You may elect not to have the withholding apply on a form which the Custodian will provide to you prior to the distribution.


Permissible Investments Your IRA may be invested as you direct in any investment offered by the Custodian. Investments include mutual funds, money market accounts and certificates of deposit. You may transfer among investments at any time. Investments shall not include collectibles (as described in Section 408(m) of the Internal Revenue Code.) A collectible is defined as any work of art, rug or antique, metal or gem, stamp or coin, alcoholic beverage, or any other tangible personal property specified by the IRS. However, if the Trustee permits, specially minted US gold, silver and platinum coins and certain state-issued coins are permissible IRA investments. Beginning on 1/1/98 you may also invest in certain gold, silver, platinum or palladium bullion. Such bullion must be permitted by the Trustee and held in the physical possession of the IRA Trustee or Custodian. The earnings on you investments will be reinvested as you direct. You may invest your IRA assets in publicly traded stocks, bonds or covered call options. The growth in value of your IRA will depend on the investment decisions made by you and is neither guaranteed nor projected.

Prohibited Transactions If you or your beneficiary engage in a prohibited transaction as described in Section 4975(c) of the Internal Revenue Code with respect to your IRA (such as borrowing money from your IRA), your account will lose its tax exemption, and you will be immediately taxed on the entire account balance. If you have not yet attained the age of 59 1/2 at the time, the 10% penalty for premature distributions will be applied to the entire amount in the account. A prohibited transaction occurs if you deal with the assets of the IRA on your own account, such as selling property to your IRA or borrowing from the IRA.

Pledging Your IRA as Security If you pledge your IRA as security for a loan, the amount ledged will be deemed to have been distributed to you and that amount will be includible in your gross income in the year of the pledge. If you have not yeat attained the age or 59 1/2, the 10% penalty will be applied to the amount pledged.

Filing Requirements The following IRS forms may be necessary to report contributions to and distributions from your IRA:

Form 5329 (Additional Taxes Attributable to Qualified Retirement Plans (including IRAs, Annuities and Modified Endowment Contracts) - filed by each participant (or surviving spouse) to report the 6% penalty for excess contributions, the 10% additional tax for premature distributions, the 50% panalty for failure to make minimum required withdrawals after age 70 1/2, or the 15% penalty for excess distributions (over $150,000, as indexed for increases in the cost of living).

Form 8606 (Nondeductible IRA Contributions, IRA Basis, and Non-taxable IRA Distributions) - filed to report nondeductible IRA contributions and non-taxable IRA distributions.

Form 1040 (individual income tax return) - taxable distributions from you IRA are generally reported on you Form 1040.


A simplified employee pension("SEP") is a plan established by an employer that allows the employer to make contributions into the IRAs of employees. If your employer has adopted a SEP, your employer may make deductible SEP contributions directly to your IRA each year in an amount up to the lesser of $30,000 or 15% of your compensation.

Contributions After Age 70 1/2 SEP contributions may be made to your IRA by your employer even after you have attained age 70 1/2.

Elective Deferrals If your employer's SEP was established before 1/1/97, it may provide for elective deferrals. An elective deferral is a pre-tax salary reduction contribution of up to an indexed dollar amount for each year. This amount is $9,500 for 1997. Elective deferrals under a SEP are generally treated as employer contributions. After December 31, 1996 SEPs providing for elective deferrals may no longer be adopted.


The form of your IRA has received a favorable letter of determination from the Internal Revenue Service. This Internal Revenue Service approval is a determination only as to form and does not represent a determination of the merits of the IRA or the investment choices offered under the IRA. Internal Revenue Service approval also does not address whether particular contributions to the IRA are decuctible for Federal income tax purposes. You may obtain further information with respect to your IRA from any district office of the Internal Revenue Service and from IRS Publication 590.