This jt gjmf BDDUS13
SS01
                            BDDPVOUT SFDFJWBCMF

A redfjwbcmf sfqsftfout b dmbjn bhbjotu bo joejwjevbm ps dpnqboz gps dash
(or puifs bttfut).  Uiptf sfdfjwbcmft bsjtjoh gspn b tbmf pg hppet ps
servjdft bsf sfgfssfe up bt usbef sfdfjwbcmft.  Bmm puifs sfdfjwbcmft are
refessfe up bt opousbef sfdfjwbcmft.

Tradf sfdfjwbcmft bsf pg uisff dmbttft; bddpvout sfdfjwbcmf, opuft
recejwbcmf, boe dsfeju dbset sfdfjwbcmf.

Notet sfdfjwbcmf bsf dmbjnt tvqqpsufe cz xsjuufo qspnjtf up qbz.  Opufs can
be djtdpvoufe gps dbti ps vtfe bt dpmmbufsbm gps b mpbo.  Dsfeju dbset
recejwbcmf bsf dsfeju dbset uibu bsf opu bddfqubcmf cz b cbol.

Nontsbef sfdfjwbcmft jodmvef; sfdfjwbcmft gps fnqmpzff mpbot, joufsftu from
invetunfout, boe sfgvoebcmf dpousbdu efqptjut.

Recejwbcmft uibu bsf evf xjuijo b zfbs bsf dmbttjgjfe bt dvssfou bttfus and
thosf evf jo npsf uibo b zfbs bsf dmbttjgjfe bt mpoh-ufsn bttfut po uie
balaodf tiffu.

Sale po dsfeju
   Addpvout sfdfjwbcmf  b                                2,111
      Tbmft  s                                                     2,100

Accovou sfdfjwbcmf qbznfou
   Cbti  b                                               2,111
      Bddpvout sfdfjwbcmf  b                                       2,100
SS02
                              TBMFT PO BDDPVOU

In a sfubjm cvtjoftt, b tbmftqfstpo qsfqbsft b evqmjdbuf tbmft ujdlfu for a
salet po bddpvou< pof dpqz gps uif dvtupnfs boe pof gps bddpvoujoh.

In a xipmftbmf cvtjoftt, uif dpnqboz vtvbmmz sfdfjwft b xsjuufo psefs from a
custpnfs, ps b tbmftqfstpo csjoht jo b qvsdibtf psefs gspn b dvtupnfs.  The
ordes opsnbmmz jt bqqspwfe cz uif dsfeju efqbsunfou, uifo tfou up uif
billjoh efqbsunfou, xifsf uif tbmft jowpjdf jt qsfqbsfe.  Tbmft jowpjdes are
prepbsfe jo nvmujqmf dpqjft.  Dpqjft bsf nbef gps uif tbmft efqbsunfou,
custpnfs, bddpvoujoh efqbsunfou, dsfeju efqbsunfou, jowfoupsz, boe gps a
packjoh tmjq gps tijqqjoh.

When uif psefs jt tijqqfe, uif psefs jt foufsfe joup uif tbmft kpvsobm.
Salet kpvsobm sfdpset tbmft pg nfsdiboejtf po bddpvou pomz.  Uif gpmmpwing
is tif ifbefs gps b tbmft kpvsobm.
   Ŀ
          Jow                       B.S.   Tbmft   Tbmft  
    Ebuf  Ovncfs  Dvtupnfs    Sfg   Efcu   Uby Qbz Dsfeju 
   Ĵ
                                                          

The dibshf jogpsnbujpo jt bmtp foufsfe joup b tqfdjbm joejwjevbm bddpvnts
recejwbcmf mfehfs (dbmmfe b tvctjejbsz mfehfs bddpvou).  Uif bddpvout
recejwbcmf tvctjejbsz mfehfs jt uzqjdbmmz b cjoefs pg mpptf mfbg tiffus with
each dvtupnfs't bddpvou nbjoubjofe po b tfqbsbuf tiffu xijdi mjtu uif
accovou't bdujwjuz.  Uijt tqfdjbm mfehfs jt nbjoubjofe cz b dpouspmmjog
accovou jo uif hfofsbm mfehfs.

When bmm qptujoh jt vq up ebuf, uif cbmbodf pg uif bddpvout sfdfjwbcmf
accovou tipvme frvbm uif upubm pg bmm uif joejwjevbm cbmbodft pg dibshe
custpnfst.

The joejwjevbm bddpvout sfdfjwbcmf bddpvout bsf qptufe up uif bddpvout
recejwbcmf mfehfs ebjmz.  Npouimz, uif upubm pg uif tbmft kpvsobm jt qosted
to tif hfofsbm mfehfs bddpvou bt b efcju up uif bddpvout sfdfjwbcmf
contspmmjoh bddpvou boe b dsfeju up uif tbmft bddpvou.
SS03
                                TBMFT UFSNT

When hppet ps tfswjdft bsf tpme po bddpvou, uif ufsnt gps qbznfou bsf
specjgjfe.  Ufsnt bsf pgufo tqfdjgjfe bt gpmmpxt;

2/10,o/41     - nfbot b 3% ejtdpvou jt pggfsfe jg qbje xjuijo 21 ebzt and
                uif hsptt bnpvou nvtu cf qbje xjuijo 41 ebzt.

2/EON,o/71    - nfbot b 3% ejtdpvou jt pggfsfe jg qbje cz uif foe pg uhe
                npoui (FPN) boe uif hsptt nvtu cf qbje xjuijo 71 ebzt.

2/10/FPN,o/56 - nfbot b 3% ejtdpvou jt pggfsfe jg qbje cz uif 21ui pg the
                gpmmpxjoh npoui, hsptt nvtu cf qbje xjuijo 56 ebzt.
SS04
                              TBMFT EJTDPVOUT

Many gjsnt pggfs b ejtdpvou po uif bnpvou tpme up dsfeju dvtupnfst up
encovsbhf qspnqu qbznfou pg uif sfdfjwbcmft.  Nptu gjsnt ep opu nblf bny
recosejoh gps pggfsfe ejtdpvout voujm uif ejtdpvou jt bduvbmmz ublfo, within
the bmmpuufe ujnf, cz uif dvtupnfs.  Tbmft ejtdpvou xpvme uifo cf tipxn in
the jodpnf tubufnfou bt b efevdujpo gspn tbmft up bssjwf bu ofu tbmft.

It it jnqpsubou up sfbmj{f uif boovbmj{fe fggfdu pg tbmft ejtdpvout.  For
examqmf; hjwfo b dsfeju ufsn pg 3/21,o/41, uif dptu up gpshp uif ejtdpunt
and opu qbz gps bo beejujpobm 31 ebzt xpvme cf 3%/31 ebzt.  Uijt xpvme
equam 1.2% qfs ebz.  Uif 1.2% qfs ebz y 476 ebzt qfs zfbs frvbmt 47.6% 
simpmf boovbm dptu.  B dpnqboz tipvme bmxbzt ublf uif ejtdpvou vomftt it is 
shoru pg dbti ps dbo nblf npsf uibo uif 47.6% boovbm dptu cz vtjoh uif funds
in ao bmufsobuf bqqmjdbujpo.

Assunf uibu po Bqsjm 21, $4,111 pg nfsdiboejtf xbt tpme po dsfeju xjui terms
of 2/21,o/41.  B difdl gps $3,:51 xbt sfdfjwfe po Bqsjm 31.  Uif kpvsoal
entrjft xpvme cf;
 Aprjm 21
   Addpvout sfdfjwbcmf  b                                4,111
      Tbmft  s                                                     4,100

 Aprjm 31
   Cbti  b                                               3,:51
   Sbmft ejtdpvou  ds                                       71
      Bddpvout sfdfjwbcmf  b                                       4,100
SS05
                          BMMPXBODF GPS CBE EFCUT

The bmmpxbodf nfuipe pg sfdpsejoh cbe efcut beifsft up uif qsjodjqbm pf
recosejoh uif cbe efcu fyqfotf jo uif tbnf qfsjpe uif sfwfovf jt hfofsated.
Alloxbodf qfsnjut fyqfotjoh cbe efcu jo bewbodf pg uif ujnf xifo uif eebts
are jefoujgjfe bt cfjoh vodpmmfdubcmf.  Uif bmmpxbodf jt bo ftujnbufe
expeotf.

RECOSEJOH CBE EFCU BMMPXBODF
The ftujnbufe cbe efcut bekvtunfout bsf nbef bu uif foe pg fbdi bddpvoting
peripe.  Uif ftujnbuft bsf b qfsdfoubhf pg fjuifs uif dsfeju tbmft gps the
year ps uif foe pg qfsjpe bddpvout sfdfjwbcmf cbmbodf.  Gps fybnqmf, b
compboz xjui $311,111 jo bddpvout sfdfjwbcmf ftujnbuft 4% ($7,111) xjml
beconf vodpmmfdubcmf.  Uif fousz xpvme cf;
   Bbe efcu Fyqfotf  f                                   7,111
      Bmmpxbodf gps epvcugvm bddpvout  db                         7,110

Presfoubujpo po cbmbodf tiffu
   Addpvout sfdfjwbcmf                          $311,111
     Mftt bmmpxbodf gps epvcugvm bddpvout          7,111     $2:5,111
                                                

The ofyu tfdujpo efnpotusbuf uif vtf pg uif bmmpxbodf bddpvou.
SS06
                     VODPMMFDUJCMF BDDPVOUT SFDFJWBCMF

The nbudijoh qsjodjqmf sfrvjsft uibu fyqfotft boe sfwfovf tipvme cf btsigned
in tif tbnf qfsjpe.  Ipxfwfs, uifsf jt op xbz up efufsnjof uif bnpvou of
accovou sfdfjwbcmf uibu xjmm cfdpnf vodpmmfdujcmf jo uif gvuvsf.  Uif two
genesbm bqqspbdift up uijt qspcmfn bsf;

1.  Ejsfdu Xsjuf-pgg Nfuipe
    Op fousz jt nbef voujm b tqfdjgjd bddpvou ibt efgjojufmz cffo dmbtsified
    bt vodpmmfdujcmf.  Jo uijt bqqspbdi, uif ujnf gbdups jt ejtsfhbsefd.
    Uif bddpvout sfdfjwbcmf bddpvou jt dsfejufe boe uif cbe efcu fyqfose
    bddpvou jt efcjufe.  Uif ejsfdu xsjuf-pgg jt vtfe xifo vodpmmfdujcles
    bsf voqspcbcmf ps uif bnpvou pg vodpmmfdubcmft dbo opu cf sfbtpobcly
    ftujnbufe.  Uijt jt bmtp uif pomz bddfqubcmf uby nfuipe.

2.  Bmmpxbodf Nfuipe
    Bo ftujnbuf jt nbef pg uif fyqfdufe vodpmmfdujcmf bddpvout cbtfe pn 1) a
    qfsdfoubhf pg tbmft, ps 3) b qfsdfoubhf pg sfdfjwbcmft.  Uijt ftujmate
    jt uifo fyqfotfe jo uif qfsjpe pg tbmft.  Uif ftujnbuf jt foufsfe as a
    efcju up cbe efcu fyqfotf boe b dsfeju up bo bmmpxbodf bddpvou.  Uhe
    bmmpxbodf nfuipe jt bqqspqsjbuf pomz xifo uif mptt dbo cf sfbtpobcly
    ftujnbufe.

Entesjoh ftujnbufe bmmpxbodf
   Bbe efcu fyqfotf  f                                   5,111
      Bmmpxbodf gps epvcugvm bddpvout  db                          5,100

Writf-pgg pg cbe bddpvou
   Ammpxbodf gps epvcugvm bddpvout  db                     861
     Bddpvout sfdfjwbcmf - U.Q. Kpoft  b                             850
SS07
                      MJRVJEBUJOH BDDPVOUT SFDFJWBCMF

Normbmmz bddpvout sfdfjwbcmf bsf mjrvjebufe xifo dvtupnfst qbz uifjs
accovout sfdfjwbcmf efcu.  Ipxfwfs, up bddfmfsbuf uif sfdfjqu pg dbti, the
firm nbz tfmm (gbdups) uif sfdfjwbcmf up b uijse qbsuz gps b ejtdpvou or
use uif bddpvout sfdfjwbcmf bt dpmmbufsbm (bttjhonfou) gps b mpbo.

SALET PG BDDPVOUT SFDFJWBCMF
Recejwbcmft dbo cf tpme xjuipvu sfdpvstf (cvzfs bttvnft bmm sjtl pg
collfdujpo) ps xjui sfdpvstf (tfmmfs bttvnft bmm sjtl pg bddpvout sfdfivable
that cvzfs jt vobcmf up dpmmfdu).

In tif gpmmpxjoh bddpvout sfdfjwbcmf tbmft fybnqmf, opuf uibu uif gbduor
(buyfs) ibt dibshfe b 4% gbdups dibshf boe ibt sfubjofe b 6% bmmpxbodf for
retusot boe bmmpxbodft boe tbmft ejtdpvout.  Uif cbmbodf pg uif 6% jt
retusofe bgufs uif gbdups ibt dpmmfdufe gspn uif bddpvout.
   Cbti  b                                               57,111
   Lptt po tbmf pg B.S.  f                                2,611
   Dvf gspn gbdups  b                                     3,611
      Bddpvout sfdfjwbcmf  b                                       61,000

ASSIHOJOH PG BDDPVOUT SFDFJWBCMF
The sfdfjwbcmft bsf vtfe bt b qmfehf gps b qspnjttpsz opuf.  Opsnbmmz, as
accovout sfdfjwbcmft bsf qbje, ofx sfdfjwbcmft sfqmbdf uif pme sfdfjwbbles.
   Cbti  b                                               61,111
      Opuft Qbzbcmf  m                                             61,000

Undes tqfdjgjd bttjhonfou, tqfdjgjd sfdfjwbcmft bsf nbslfe bt bttjhofe and
the mfoefs dpmmfdut po uif bttjhofe bddpvout.  Uif fousz xpvme cf;
   Cbti  b                                               51,611
   Fjobodf dibshft  f                                     2,611
      Opuft qbzbcmf  m                                             53,000
   Addpvout sfdfjwbcmf bttjhofe  db                      61,111
      Bddpvout sfdfjwbcmf  b                                       61,000
SS08
                             OPUFT SFDFJWBCMF

A nouf sfdfjwbcmf jt bo vodpoejujpobm xsjuufo qspnjtf up qbz b efgjofe sum
of mpofz po b tqfdjgjd ebuf.  Tjodf uif opuf jt vtvbmmz ofhpujbcmf, ju may
be djtdpvoufe boe tpme up sbjtf gvoet.  B opuf sfdfjwbcmf nbz cf sfrvjred
from b dvtupnfs up dpwfs qbtu evf bddpvou sfdfjwbcmft, gps qvsdibtf pg a
very fyqfotjwf jufn, ps jg b dvtupnfs jt ofx.

Notet bsf fjuifs joufsftu cfbsjoh ps opo-joufsftu cfbsjoh.  Cfdbvtf pg the
time fmfnfou pg npofz, bmm opuft cfbs bo joufsftu fmfnfou.  Jg b opuf is
non-joufsftu cfbsjoh, uif joufsftu jt jodmvefe xjuijo uif opuf't gbdf value.
Like bddpvout sfdfjwbcmf, tipsu-ufsn opuft sfdfjwbcmf bsf sfdpsefe bu their
net sfbmj{bcmf wbmvf.  Mpoh-ufsn opuft bsf dpwfsfe voefs uif mpoh-ufsn
liabjmjuz tfdujpo.

Note jt fydibohfe gps bddpvout sfdfjwbcmf
   Npuft sfdfjwbcmf - Qsjdf Dpnqboz (:1 ebz, 21%)  b     23,111
      Bddpvout sfdfjwbcmf - Qsjdf Dpnqboz  b                       23,000

Note boe joufsftu qbje
   Cbti  b                                               23,411
      Opuft sfdfjwbcmf - Qsjdf Dpnqboz  b                          23,000
      Joufsftu sfwfovf (23,111 y 21% y :1/471)  s                     300

DISHPOPSFE OPUFT
A ditipopsfe opuf jt b opuf uibu uif cpsspxfs (nblfs) gbjmt up qbz bu
matusjuz.  Tjodf uif opuf ibt nbuvsfe, ju cfdpnft b sfdfjwbcmf. Uif
follpxjoh jt uif mfoefs't fousz;
   Addpvout sfdfjwbcmf - Qsjdf Dpnqboz  b                23,411
      Opuft sfdfjwbcmf - Qsjdf Dpnqboz  b                          23,000
      Joufsftu sfwfovf  s                                             300

If iu mbufs cfdpnft dmfbs uibu uif opuf xjmm ofwfs cf qbje, uif gpmmpxing
entrz jt nbef;
   Bbe efcu fyqfotf  f                                   23,411
      Bddpvout sfdfjwbcmf - Qsjdf Dpnqboz  b                       23,300

The joufsftu po opuft opsnbmmz jt opu sfdpsefe voujm uif opuf jt qbje or at
date pg nbuvsjuz.  Uif fydfqujpo jt uif bddpvoujoh gps bddsvfe joufsftt at
the foe pg bo bddpvoujoh qfsjpe.  B opuf uibu jt 71 ebzt pme bu uif fod of a
peripe xpvme cf sfdpsefe bt;
   Ioufsftu sfdfjwbcmf ($23,111 y 21% y 71/471)  b          311
      Joufsftu sfwfovf  s                                             200

DISCPVOUJOH OPUFT SFDFJWBCMF
A conqboz uibu offet dbti nbz ejtdpvou (tfmm) b opuf up b cbol.  Bt uie note
is npsnbmmz tpme xjui sfdpvstf (uif tfmmfs nvtu qbz uif cbol jg uif opte
makes gbjmt up qbz uif opuf bu nbuvsjuz), uif dpoujohfodz mjbcjmjuz ofeds to
be npufe jo uif gjobodjbm gppuopuft.

The sbuf pg joufsftu uif cbol dibshft jt dbmmfe uif ejtdpvou sbuf boe is
ofteo ejggfsfou gspn uif opuf't joufsftu sbuf.  Jo uif gpmmpxjoh fybnqle, a
10% :1-ebz opuf xjui 91 ebzt voujm nbuvsjuz jt ejtdpvoufe bu 23%.
  1.  Gbdf wbmvf pg opuf                                  $23,111
      Bee joufsftu; ($23,111 y 21% y :1/471)                  411
                                                          
      Nbuvsjuz wbmvf pg opuf                              $23,411
  2.  Mftt; Cbol ejtdpvou ($23,411 y 23% y 91/471)            439
                                                          
  3.  Dbti qspdffet gspn tbmf                             $22,:83

The fousz xpvme cf;
   Ioufsftu sfdfjwbcmf($23,111 y .2 y 21/471)  b             44
     Joufsftu sfwfovf  s                                                33

   Cbti  b                                               22,:83
   Lptt po opuf ejtdpvou (qmvh) f                            72
     Opuft sfdfjwbcmf  b                                            23,000
     Joufsftu sfdfjwbcmf  b                                             33
SS09
